Applications for federal Canada Recovery Benefit open on October 12

Beginning on Monday (October 12), Canadians can apply for the Canada Recovery Benefit (CRB), the federal government’s year-long replacement for the Canada Emergency Recovery Benefit (CERB).

CRB provides income support for people who are have either lost their employment or self-employment income (or have had it significantly reduced) because of the COVID-19 pandemic. This includes gig workers, freelancers, and other self-employed people who do not qualify for regular Employment Insurance (EI) benefits.

If you’re eligible for CRB, you’ll receive $1,000 for a two-week period, equivalent to $2,000 a month — the same amount under CERB. However, unlike CERB, the federal government will be applying a 10 per cent withholding tax, so you’ll actually receive $900 for a two-week period, or $1,800 a month.

Also unlike CERB, where you applied once every month, you have to apply for CRB for every two-week period you need it, up to a maximum of 13 two-week periods (26 weeks). The first two-week period is September 27 to October 10, 2020, and the final one is September 12 to September 25, 2021. See the end of this story for all the two-week periods and application dates.

You apply on the Monday following the two-week period for which you want to apply for CRB — so you’re applying retroactively for the benefit. For the first two-week period September 27th to October 10th, you apply on Monday, October 12th.

The easiest way to apply is online through the Canada Revenue Agency (CRA) My Account. If you’ve already registered with CRA for direct deposit, you’ll get your payment in three to five business days; if you don’t have direct deposit, you’ll get a cheque in 10 to 12 business days.

Some of the eligibility criteria for CRB are similar to CERB: you have to reside in Canada, be at least 15 years old, have a valid Social Insurance Number (SIN), and have earned at least $5,000 in either 2019, 2020, or in the 12 months before the date you apply. The $5,000 can be a combination of gross employment income, net self-employment income (after deducting expenses), and maternity and parental benefits.

You can’t apply for CRB if you’re eligible for EI benefits, or if you’ve received any of the following benefits: Canada Recovery Sickness Benefit (CRSB), Canada Recovery Caregiving Benefit (CRCB), short-term disability benefits, workers’ compensation benefits, EI benefits, or Québec Parental Insurance Plan (QPIP) benefits.

You also can’t voluntarily quit your job or voluntarily reduce the hours you are working to apply for CRB, and you have to continue looking for work — whether employment or self-employment — while you’re receiving CRB. If you turned down what CRA calls “reasonable work” during the two-week period you’re applying for (CRA doesn’t define “reasonable”), you automatically lose eligibility for five periods (10 weeks) of CRB and can’t apply again until those 10 weeks are up.

The good news is that you can continue to earn employment or self-employment income while you’re receiving CRB, as long as you don’t earn more than half of what your average weekly income was before your job was affected by the pandemic.

For example, if your average weekly income in 2019 was $500, you can’t earn more than 50 per cent of that amount in the two-week period you are receiving CRB. So, if your average weekly income was $500, that means you can’t earn more than $250 in the two-week period you’re receiving CRB and still qualify to receive it.

You can calculate your average weekly income using the previous 12 months before you applied for CRB, during 2020, or during 2019. When you’re calculating your average weekly income, don’t include any COVID-19 emergency benefits you received (such as CERB), student loans or bursaries, maternity and parental benefits from EI, or pensions.

While you can continue to earn up to 50 per cent of your previous average weekly income while on CRB, keep an eye on how it affects your net income in the calendar year. If you earn more than $38,000 in net income during the year, you’ll have to pay back 50 cents of CRB for every dollar of net income that exceeds that amount. Your net income includes any CERB, CRSB, or CRCB benefits you have received in the calendar year, but it does not include CRB.

For example, if your net income was $40,000 in 2020 and you received $6,000 in CRB benefits in 2020, you’ll have to pay back $1,000 of your CRB benefits (half of the amount of your net income over $38,000). The repayment will be due at the same time as your income tax return for the year, and late payments will be charged interest.

As mentioned, CRA will withhold 10 per cent tax from each CRB payment. Depending on your income, you may need to pay more or less tax when you file your income tax return. In any case, you must report any CRB payments that you receive as income when you file your personal income tax return. The CRA will provide you with a T4A tax information slip at tax time for the amount you received in all CRA-administered COVID-19 benefits, including CERB and CRB.

For more information about CRB, including eligibility and how to apply, visit canada.ca/en/revenue-agency/services/benefits/recovery-benefit.html.

CRB two-week periods and when to apply

You can apply for any of these two-week periods, but only up to a maximum of 13 periods total (26 weeks).