The government has announced that Self-employed Canadians whose application for the Canada Emergency Response Benefit was based on their gross income will not have to pay back the benefit.
Questions on whether others that were being asked to repay will not be paying back can’t be answered for now as the government said the waiver decision was made in a bid to address a specific problem.
While talking about the development, Employment Minister Carla Qualtrough said: “We are dealing here with a subset of the nine million Canadians who applied for CERB who legitimately and honestly relied on misinformation we provided. And that’s the problem we’re solving here today.”
Self-employed Canadians who applied for the benefit in 2020 were left confused by directives from Canada Revenue Agency on how to determine whether they qualified for the benefit as they didn’t know the $5,000 income qualification means income before or after allowable deductions.
The government however gave answers that were conflicting in the first few days of the CERB roll out, and while the ultimate answer happened to be net income, some had applied the income after allowable deductions using gross income.
As a result, they found themselves among 441,000 Canadians who received warning letters last year that their eligibility for CERB was in doubt and form the look of things, have might have to pay back. It remains unclear how many Canadians the program tweak will affect and how much it will cost.
Qualtrough said recently that out of the 441,000 people who got letters, many of them have filed their taxes, as such, their eligibility for CERB has been confirmed and they will not repay.
Also, Qualtrough made it known that the change came after Canadians complained about the issue, and took time to develop a “balanced” solution.
During a press conference, she said: “We reached a conclusion that the fairest and most reasonable way to move forward on this would be to allow people who applied using gross to not have to repay their benefits.”
She said those who had repaid amounts they felt they owed would also get their money back.
There is still pressure for a wider reprieve from repayments, particularly for Canadians who do not have the income to pay back what they owe and others who applied for the benefits, got them, and later discovered they didn’t qualify.
Qualtrough disclosed no one has to repay urgently and added that the government is making efforts to liaise with Canadians to cushion the effect of any stress repayments will cause. However, she did not talk about any further amnesty programs.
Instead the government talked about another announcement it made as efforts to offer relief to low-income and middle-income Canadians: those who were availed emergency benefits and made around $75,000 in taxable income will not to pay interest on 2020 tax debt until 2022.
In a news release, the government said the measure is expected to provide a minimum of 4.5 million people “with the flexibility required to feel confident about accessing the COVID-19 income support without facing additional stress at tax time.”
