Considering COVID-19 CERB benefits when determining IRB entitlements
July 14, 2020
Authored by RSM Canada LLP
Kirby W. Houle, CPA, CA, shared this article
There is always something new to challenge practitioners under the Statutory Accident Benefits Schedule (SABS)1, During the current pandemic, the question now arises as to how the COVID-19-related Canada Emergency Response Benefit (CERB) should be treated in determining income replacement benefit (IRB) or nonearner benefit (NEB) entitlements? The CERB provides temporary financial support to employed and self-employed Canadians who are directly affected by COVID-19. Eligible beneficiaries can apply for and receive $2,000 every four weeks for up to 29 weeks from March 15, 2020, to Oct. 3, 2020. The eligibility criteria have evolved since introduction, and per the CRA2, currently include:
- Work stopped, work hours reduced or unable to work (for the illness or to care for someone with the illness) because of COVID-19
- The beneficiary did not quit their job voluntarily
- The beneficiary does not expect to earn over $1,000 during each four-week period (and for at least 14 days consecutively during the first four-week period applied for)
- The beneficiary earned minimum income of $5,000 in 2019 or the past 12 months from employment or self-employment or provincial maternity or paternity leave benefits
- Employment Insurance (EI) benefits are not received or applied for in the same period
- Payments made to ineligible beneficiaries will be repayable
- Whether, until provided for under the SABS, they should be considered at all
- How to examine comparisons with other benefits
- How insurers will treat this issue
- What decisions might come out of the Ontario Licence Appeal Tribunal (the LAT)
- Recipients are referred to as “beneficiaries.”
- Like social assistance, CERB payments are a fixed universal amount not based on historical earnings, notwithstanding the income-based qualifying criterion.
- The enabling legislation, also known as the COVID-19 Emergency Response Act, uses the term “income support payment.”
- This act precludes the CERB from assignment, charge, attachment, garnishment or retention by way of deduction, set off or compensation under any other Act of Parliament. Clearly, the intention is that the CERB financially assists individual workers.
- “7(3)(a) 70 per cent of any gross employment income received by the insured person as a result of being employed after the accident…”
- “7(3)(b) 70 per cent of any income from self-employment earned by the insured person after the accident…”
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