At the start of the COVID-19 pandemic, many Canadians were quick to register for the Canadian Emergency Response Benefit (CERB). The federal government’s $2,000-a-month payment was simple to apply for and came with minimal eligibility requirements.
CERB was introduced by the government to assist those who lost their jobs as a result of the COVID-19 lockdowns. Nearly 9 million people received payments totaling $81.6 billion in just seven months.
Many people received CERB without fully understanding the criteria for qualifying and whether they were met. Furthermore, due to the speed at which the program was rolled out, the government was not verifying eligibility before money was distributed. As a result, many people who did not qualify received the benefit.
As the pandemic raged on, several additional benefits were introduced, including:
- Canada Emergency Student Benefit (CESB)
- Canada Recovery Benefit (CRB)
- Canada Recovery Caregiving Benefit (CRCB)
- Canada Recovery Sickness Benefit (CRSB)
- Canada Worker Lockdown Benefit (CWLB)
Anyone who received any of these benefits who were deemed to be ineligible, or who received overpayment, must pay them back.
Government Claw Backs
The government has acknowledged that, in its efforts to provide urgently-needed income support to Canadians during the pandemic, some individuals would be found to later be ineligible. Furthermore, some Canadians were overpaid and others may have to pay money back because they earned too much money elsewhere.
As a result, the government started their collection efforts in May 2022 to recover payments deemed ineligible by sending out letters encouraging voluntary payments. Yet as of April 30, 2024, there is still $9.53-billion in outstanding COVID-19 benefit recovery-related debt.
CRA to Take Legal Action
At SolveYourDebts.com, we are seeing a lot of clients that still owe from CERB/EI overpayments from the pandemic. Many of these clients have not made any sort of payment arrangements. No one has been reaching out to them about it, so they don’t see it as a priority or concern at all. This is something people have been ignoring but will have to deal with soon enough.
In July, the CRA said it will begin issuing legal warnings and could start to take steps to recover overpayments of all COVID-19 benefits. Actions may include taking payments from wages or bank accounts. The CRA has said it will only take legal action against those who have not responded or co-operated and who have been determined to have the financial capacity to pay.
What happens if you don’t pay?
The CRA has great powers to make you pay back any owed money. They can seize your bank account, garnish your wages and may even register a lien on your home. They can also offset existing debt by withholding other government money you receive, such as GST credits or income tax refunds, which they have already started doing.
Therefore, it’s extremely important to explore all available options to pay your debts in full and on time. Avoiding it will simply make it worse.
Before starting legal action, the CRA must do the following:
- make 3 attempts to give verbal legal warning by phone
- send 1 written legal warning letter
How to Repay CERB overpayments
Visit the government of Canada website for further details on how to make payment. If you don’t agree with your overpayment, you can request for reconsideration of a decision. You can pay your COVID-19 benefit overpayments in full or arrange to pay what you owe over time.
What if you can’t pay back the CERB?
The government recognizes that CERB repayments may be difficult for many people, which is why they are not charging any interest or penalties on COVID-19 benefits overpayment debt for individuals. If you cannot repay your CERB debt in full, you can arrange to pay your debt over time. Contact the CRA to discuss your options.
The CRA has said their primary goal is to encourage individuals to contact them to find the best way to resolve their debt.
If someone is still unable to repay the full amount, a credit counselling debt management program such as SolveYourDebts.com is another option.
If you need assistance on how to repay your CERB overpayment, our experienced credit counsellors can help you review your options and design a suitable debt repayment plan. Contact us today for a free consultation.
