CESB explained

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Until last week, very little financial relief was available to students. In March, the federal government announced a 6-month moratorium on federal student loans. Anyone with such loan is not required to make any payments until October. Interests won’t accrue during that period either.

That was about it. The majority of students doesn’t qualify for CERB or EI benefits. Last Friday a $9 billion student aid package was approved by the Senate, including funding for the Canada Emergency Student Benefit or CESB.

Let’s take a look at this new benefit.

General info

The benefit amount is $ 1 250.00 per month or $ 2 000 for students with a disability or dependents. It will be paid from May to August.

The program is administered by Canada Revenue Agency and applications will need to be made on their website.

At this stage, it’s unknown whether this benefit is taxable or not.

Eligibility

To receive the benefit you need to:

  • be enrolled in a post-secondary education program leading to a degree, diploma, or certificate; OR
  • be a graduate in December 2019 or after; OR
  • be a high-school graduate who will be joining a post-secondary program in the coming months; AND
  • Not receiving any income of any kind. If you’re working, you’re not eligible. If you lost your job due to Covid-19, apply for CERB instead; AND
  • Be looking for a job. This was a requirement from opposition to pass the bill.

Please note the words “or” as well as “and”. They’re crucial.

Other measures

In addition to CESB, the federal government has also announced the following:

  • doubling the Canada Student Grants for F/T students to $ 6 000/year; P/T students: $ 3 600/year.
  • increasing the maximum amount on federal loans to $ 11 900/year
  • suspending the fixed student contribution amount for 2020/2021- $ 1 500 to $ 3 000-
  • creating the Canada Student Service Grant for students who volunteer in specific sectors this Summer. Amount from $ 1 000 to $ 5 000, depending on number of hours.

Final word

All the details for this aid package are not available just yet. We’ll update this post when we know more.

It’s a good thing some help is on the way for students. Unlike Europe, tuition fees in Canada are sky-high. The average student loan debt for a graduate student is $ 28 000….

CERB updated

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I previously wrote a post about the Canada Emergency Response Benefit, mainly to summarize the qualification criteria.

This benefit has since been expanded to include more people. Additional clarifications were also provided.

Updated eligibility criteria

In order to receive CERB, you need to meet the following conditions:

  • You’re a worker -either employed or self-employed- and your hours have been reduced or eliminated due to Covid-19
  • You have sustained a total loss of income in the last 14 days OR you earned less than $ 1 000 in employment income
  • You are not expected to earn any income in subsequent periods OR you will earn less than than $ 1 000/month in employment income
  • OR you were receiving regular EI benefits on Dec 29, 2019 and your claim has ended since; you’re still unemployed AND
  • You are at least 15 years old AND
  • You reside in Canada AND
  • You’ve earned a minimum of $ 5 000.00 in 2019; These 5K need to be considered “regular income” by CRA: employment income, self-employment income, EI benefits, commissions…They’re not mutually exclusive. Dividends or director’s fees are excluded. Same with grants and bursaries or with income assistance programs.

Please note the “or” as well as the “and”. They’re crucial here!

Updated breakdown

Eligible

  • Laid-off because of Covid-19, do or don’t qualify for EI
  • Sick with Covid-19, do or don’t qualify for EI
  • Hours reduced or eliminated because of virus, either employed or self-employed; do or don’t qualify for EI
  • Earning less than 1K/month
  • Taking care of a relative sick with Covid-19
  • Taking care of your children because of schools/daycares closure
  • On EI at Dec 29, 2019 benefits exhausted since, still not working and earning income
  • Receiving other Covid-19 support payments from province/territory

Not eligible

  • Still working and earning more than $1K per month
  • No longer working but paid by employer (lucky you!)
  • Employer on wage subsidy program, i.e. paying you
  • Job slated to start soon, including students with Summer jobs
  • Receiving any EI benefits: employment, sickness, maternal/parental
  • Receiving pension or income from RRIF
  • Receiving income assistance
  • Receiving disability payments from insurance co. or gvt
  • Students who didn’t have jobs prior to Covid-19
  • Stay-at-home parents prior to Covid-19
  • People who resigned/voluntarily quit job
  • Loss of income/job for other reasons than Covid-19 (apply for EI, if you qualify)
  • Unemployed & not on EI on Dec 29, 2019
  • On unpaid leave of any kind, i.e. not working, not earning
  • Didn’t earn 5K of regular income in 2019

Unfortunately many people will still not qualify for CERB.

If you’re a student, there is some hope for you. The Federal government has just announced the creation of the Canada Emergency Student Benefit -CESB-. Details unclear at this stage though.

Where to apply

This has also been clarified by the Federal government.

If you’re eligible for EI, i.e. you worked the required number of hours, apply via Service Canada. The required number of hours can be found here. – you’ll need to scroll down-. Look at the hours entered on your Record of Employment -ROE-.

If you’re not eligible for EI, apply via Canada Revenue Agency.

Do not apply to both, and do not switch agency when re-applying. It’s OK if you applied via CRA even if you should have applied via Service Canada instead.

Amount, length and taxes

The amount is still a flat $ 2 000/month, regardless of how much you made prior to applying.

It’s available for a maximum of 4 months. You still need to re-apply for each eligibility period.

This benefit is taxable, however CRA will not withhold any income tax.

No documentation required….yet

Upon applying, you only need to certify you meet the eligibility criteria.

However, CRA or Service Canada may ask you for documentation later on. Keep this in mind, particularly if you want to game the system…

CERB explained

🇨🇦 Ryan Gauss (@RyanMGauss) | Twitter

This coming Monday, the application portal to apply for the Canada Emergency Response Benefit -CERB- will open.

CRA is already anticipating an overload on the system and has broken down application days by month of birth. The breakdown is here.

The Agency has also provided more details in regards to eligibility. I will kindly summarize them for you.

Some details remain unclear though. I’ll make a note of them too.

Eligibility criteria

To apply, you need to meet ALL of the following conditions:

  • You’re a worker -either employed or self-employed- and your hours have been reduced to zero due to Covid-19
  • You have sustained a total loss of income in the last 14 days
  • You are not expected to earn any income in subsequent periods
  • You are at least 15 years old
  • You reside in Canada
  • You’ve earned a minimum of $ 5 000.00 in 2019; These 5K can come from employment income, self-employment income, EI benefits…They’re not mutually exclusive.

You can’t combine CERB with any other income, except…

The only other income you can receive with CERB is from a province or territory that has implemented support payments in response to Covid-19.

If you are receiving any other type of income, you’re not eligible.

Here is a breakdown for different situations:

Eligible

  • Laid-off because of Covid-19, do or don’t qualify for EI
  • Sick with Covid-19, do or don’t qualify for EI
  • Hours reduced to zero because of virus, either employed or self-employed; do or don’t qualify for EI
  • Taking care of a relative sick with Covid-19
  • Taking care of your children because of schools/daycares closure
  • EI benefits exhausted after March 15th, still not working and earning income
  • Receiving other Covid-19 support payments from province/territory

Not eligible

  • Still working and receiving income
  • No longer working but paid by employer (lucky you!)
  • Employer on wage subsidy program, i.e. paying you
  • Hours reduced but not eliminated, still receiving partial income
  • Job slated to start soon, including students with Summer jobs
  • Receiving any EI benefits: employment, sickness, maternal/parental
  • Receiving pension or income from RRIF
  • Receiving income assistance
  • Receiving disability payments from insurance co. or gvt
  • Students who didn’t have jobs prior to Covid-19
  • Stay-at-home parents prior to Covid-19
  • People who resigned/voluntarily quit job
  • Loss of income/job for other reasons than Covid-19 or prior to March 15th (apply for EI, if you qualify)
  • Unemployed & not on EI prior to March 15th, even if job-searching
  • On unpaid leave of any kind, i.e. not working, not earning
  • Didn’t earn 5K in 2019

As you can see, a lot of people will not qualify for CERB. Many Canadians might be in for a rude awakening.

It’s unclear if you would qualify if a job offer is rescinded due to Covid-19. I guess it would depend on your situation when you accepted the offer.

If you’re eligible for EI, apply for EI first

Technically, you could apply for CERB first, even if you’re eligible for EI. But it’s best to apply for EI first.

It will provide you with benefits for an additional period of time. Once your claim is up, you can then apply for CERB if you’re still not working, and the program is still available.

It’s also unclear whether you will be redirected to Service Canada when applying for CERB and being eligible for EI.

If you have already applied for EI, you don’t need to apply for CERB.

Amount, length and taxes

The amount is a flat $ 2 000/month, regardless of how much you made prior to applying.

It’s available for a maximum of 4 months. You need to re-apply every month.

This benefit is taxable, however CRA will not withhold any income tax.

No documentation required…yet

Upon applying, you only need to certify you meet the eligibility criteria.

However, CRA may ask you for documentation later on. Keep this in mind, particularly if you want to game the system…

Final word

There will be cases that are not listed above. Further clarifications may also be addressed later on. If you apply for CERB, please share your experience by commenting below.