Posted June 1, 2022
The government has begun a drive to verify the payments it sent to almost nine million Canadians through the Canada Emergency Response Program (CERB) — and a big chunk of those recipients are being told they have to pay back some or all of the money they received.
Some have to return money received through the program because they were ineligible for the amount received and some because they received an advance payment that was never reconciled. Advocates are calling on the government to forgive these debts, which they say will be debilitating for many low-income workers.
A Canada Revenue Agency statement posted May 10 said the agency has started sending out Notices of Redetermination (NoRs) to Canadians who turned out to be ineligible for some or all of the CERB they received.
It’s not yet clear how many people will get these notices. According to Employment and Social Development Canada (ESDC), verification work will continue over the next four years as new data such as tax returns and records of employment become available.
This is in addition to the Notices of Debt (NoDs) that ESDC began sending in November 2021 to Canadians who received an expedited advance payment of $2,000 when CERB began, which was supposed to be applied against a later period. Anyone who did not remain on CERB long enough to reconcile that advance payment will receive one of these letters, according to the CRA, with the last ones being sent out in July — approximately 1.7 million people in total.
Barry Marsh, a member of the Etobicoke chapter of advocacy group ACORN, said he has been hearing from a number of community members who received CERB repayment letters and don’t have the money to comply.
At the beginning of the pandemic, there was a lot of confusion over CERB applications and eligibility, said Marsh. Some people may have received more than they were eligible for without realizing it, he said, but that money is long gone, used to pay for rent or other necessities.
Now, even a $2,000 debt is enough to prompt some low-income people to use payday loans, and could cost some the roof over their head, said Marsh.
“Low-income people are really struggling,” he said.
With inflation at record highs, Marsh thinks the government should treat the CERB overpayments as a grant. He said the majority of people facing repayment did not apply to CERB with the intent of misusing the system.
Anyone who is being told they were ineligible for some or all of their CERB and believes this to be false should contact the CRA to validate their claim, according to the agency.
“The government has been clear throughout the pandemic that while there will not be any penalties for those who applied for these benefits in good faith, individuals will have to repay benefits payments they received that were not entitled to,” said the spokesperson in an email.
The agency can provide flexible or deferred payment options for those unable to pay up front, according to a CRA tax tip post published May 11.
These notices “mark a transition in (the CRA’s) compliance and collecting activities,” said the CRA spokesperson, and are part of a “larger compliance effort” for COVID-19 individual benefits.
Deena Ladd, executive director of the Workers’ Action Centre, agreed with Marsh that the government should forgive CERB overpayments. Many workers continue to struggle with low pay, precarious work and debt, she said.
“To get that notice in the mail is probably an incredibly devastating blow,” said Ladd.
The early days of the pandemic were a confusing time for many, she said. The government did the right thing in rushing out payments, but as a result some mistakes were made — by applicants, but also by the government, said Ladd.
For example, self-employed CERB recipients were told they would have to repay thousands of dollars after the government issued inconsistent information about eligibility. It later admitted to the mistake and forgave those debts.
The government’s 2020 fall economic statement promised $260 million over four years beginning in 2021 to help ESDC and the CRA detect and address cases of misrepresentation, abuse or fraud relating to CERB.
Alex Thoms was out of work for around four weeks at the beginning of COVID-19, due to a temporary layoff from his retail job. Like many Canadians at that time, he was confused about how to apply for financial assistance, and applied for both CERB and Employment Insurance (EI).
When he received both, he realized his error, and set aside the EI funds so he could pay them back when asked. He used the $2,000 he received in CERB funds — $500 for each week he was off work. And when he got a notice about his EI overpayment in 2021, he sent back the funds he had set aside.
But this year during tax season, Thoms got one of the 1.7 million notices saying he owed the government $2,000 for the advance payment. He checked his bank account history to make sure he hadn’t received an extra $2,000 in CERB — he hadn’t — then called the CRA. But despite his explanation, he said the agent told him he had to pay.
“I was off for four weeks, I received $2,000,” he said.
Thoms is certain there’s been a mistake, but is setting aside money just in case the appeal he sent in April doesn’t work.
Steve Wilder, who was an electrical apprentice when COVID-19 hit, said he only received one CERB payment of $2,000 while he was off work for a few weeks at the beginning of the pandemic. So he was shocked to get a letter recently saying the $2,000 was an advance he has to pay back.
Wilder, who is preparing to move, said it will be difficult to repay in the short term. He’s still not sure how much he was actually eligible for — it’s been more than two years, so he had assumed that if he wasn’t eligible, the government would have notified him much earlier.
At the time, the money was a relief, he said. Now it’s a source of worry.
Article by Rosa Saba for the Toronto Star