81. Life After CERB: The New Benefits and EI

81. Life After CERB: The New Benefits and EI

81. Life After CERB: The New Benefits and EI

Life After CERB : The New Benefits and EI

With a focus on transitioning those receiving COVID-19 benefits, the federal government announced several new programs and changes to EI to help support this inevitable conversion.

This comes on the heels of the conclusion of the Canada Emergency Response Benefit, more commonly know as CERB which ends on September 26th of this year. In this most recent update, there was also the announcement that individuals are now eligible for an extra CERB payment making individuals eligible for the full 7 periods.

The big question on everyone’s mind is what’s going to happen after CERB ends and what support will be available to those that are still impacted by COVID-19?

After CERB

Depending on if you’re EI insured or not, this transitional path will be a modified version of Employment Insurance or a new program called the Canada Response Benefit (CRB). There are also other programs to help support instances like taking care of dependents and support for having to self-isolate.

Before we jump into the material it’s important to point out that all the new proposed benefits other than the changes to EI still need to be passed by the government, so they are susceptible to changes and as always we’ll keep you posted on this podcast.

Also for the sake of everyone’s sanity, I’ll just include the qualifying factors on the blog for this episode (listed after article).

This path that one takes when their converted off of CERB can really be divided into two paths – One for those that are EI qualified and those that are not – like the self-employed and those in the gig economy.

Transition For Those EI Eligible

So starting with those that are EI eligible, there has been a couple changes made that will begin on September 27th or the day after CERB ends. The big one is that minimum payments has been bumped up to $400 per week for regular benefits and $240 for those on extended parental leave. As always, this benefit is taxable. This change will really help those that qualify for EI, but were expected to receive a low weekly amount.

Now, It’s also now easier to qualify for EI as well. Typically one has to work a predetermined amount of hours for each qualifying period – usually as high as 700 although in some cases it can be even higher. So this new change drops the amount of EI hours to 120 for the next year.

Typically the amount of hours that one needs to accumulate during the qualifying period is tied to the unemployment rate of the region that you live in. Now because unemployment is so high, the government has announced that everyone will just need to accumulate 420 hours and that there is a one-time credit of 300 hours – meaning that we just need to work for 120 hours in the period.

This change also applies to those that want to go on maternity and parental leave and other special EI programs. So now one just needs to work 120 to go on leave.

The duration of the regular EI benefits will also last for a minimum amount of 26 weeks and can be higher depending on the region that you’re in.

So going back to those that a transitioning from CERB to EI – Those that already applied for CERB through Service Canada will automatically be converted to EI and will be paid the minimum $400 a week or greater depending on your situation. This is really the easiest situation.

For those that previously didn’t qualify or are needing to use the benefits in the future, the new rules will apply and you would need to apply over Service Canada.

For Self-Employed and Non-EI Eligible

Now, for those that are not eligible for EI, there is a new proposed benefits called the Canada Recovery Benefit. This most commonly will include those that are self-employed and in the gig economy.

This program will offer up to $400 a week for 26 weeks and like all other benefits, will be taxable. Applications will be made over CRA MyAccount and individuals will need to complete an attestation every two weeks.

Once the individual earns over $38,000, then this benefit will be clawed back at a rate of 50%. It’s expected that this claw back will be calculated when one files their income taxes.

Qualifying for this program will be similar to CERB, including earning $5,000 in 2019 or 2020 and being directly impacted by COVID-19. I’ll list the fill qualifications in the attached blog post.

Another proposed benefit is the Canada Recovery Caregiver Benefit or CRCB. This benefit is similar to the others and offers up to $400 over up to 26 weeks but this is one is per household.

Basically, you are eligible to receive these funds if you have to take care of a minor or dependent in specific situations like a child’s daycare or school is closed and a parent needs to take care of the child.

And the final major program is called the Canada Recovery Sickness Benefit and this offers $500 per week for up to two weeks if one sick or must self isolate due to COVID-19. This program is available all to workers that meet the requirements and doesn’t require a doctor’s note.

So that’s it for the news benefits and path forward. It’s important to point out that the majority of these programs have not been passed by the government and are subject to change.

Detailed Summary of Benefits

The Canada Recovery Sickness Benefit (CRSB) – Proposed

  • $500 per week for up to two weeks
  • The benefit would taxable.
  • For workers who are sick or must self-isolate due to COVID-19.
  • Effective September 27, 2020 for one year
  • The benefit would be available to:
    • Residents in Canada who are at least 15 years of age and have a Social Insurance Number
    • Employed or self-employed at the time of the application
    • Earned at least $5,000 in 2019 or in 2020.
  • No medical certificate to qualify for the benefit
  • Cannot claim the Canada Recovery Sickness Benefit and receive other paid sick leave for the same benefit period
  • Need to have missed a minimum of 60% of their scheduled work in the week for which they claim the benefit
  • Workers would apply after the one-week period in which they are seeking income support and attest that they meet the requirements

Canada Recovery Caregiver Benefits (CRCB) – Proposed

  • $400 per week for up to 26 weeks per household
  • Benefit is taxable
  • Effective from September 27, 2020 for one year,
  • Qualifications
    • Reside in Canada;
    • At least 15 years of age on the first day of the period for which they apply for the benefit
    • Valid Social Insurance Number
    • Be employed or self-employed on the day immediately preceding the period for which the application is made;
    • Earned at least $5,000 in 2019 or in 2020;
    • Unable to work for at least 60% of their normally scheduled work within a given week because of one of the following conditions:
      • To take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:
        • Their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID-19
        • Cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19
      • Caregiver who usually provides care is not available for reasons related to the COVID-19
      • Provide care to a family member with a disability or a dependent:
        • Their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19
        • Cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19
        • Caregiver who usually provides care is not available for reasons related to the COVID-19
  • Not be on paid leave from an employer in respect of the same week; and
  • Not receive CERB, the EI Emergency Response Benefit (ERB), the Canada Recovery Benefit, the Canada Recovery Sickness Benefit, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan (QPIP) benefits in respect of the same week.
  • Workers would apply after the period in which they are seeking income support and complete attestation
  • Two members residing in the same household could not be in receipt of the benefit for the same period

Simplified EI Program

  • Effective September 27th, 2020
  • The Government of Canada recognizes that the pandemic has prevented many Canadians from accumulating the number of insurable hours that is normally required – This measure is effective for one year starting on August 9, 2020
  • Receive at least $400/week or $240/week for those on extended parental benefits
  • Minimum duration of benefits for 26 weeks
  • A minimum unemployment rate of 13.1% is being used for all EI economic regions in order to lower the hours required to qualify for EI regular benefits
    • set 14 as the number of best weeks of earnings used in the calculation of the weekly benefit rate.
  • 120 hours to qualify
    • One-time credit of 300 hours for regular benefits or 480 hours for special benefits
    • Credits last for one year
  • The hours credit will also be made retroactive to March 15, 2020 for claimants who were looking to transition early from the CERB to EI maternity, parental, compassionate care, family caregiver or work-sharing benefits but could not establish their EI claim due to insufficient hours. For these claimants, the qualifying period will also be extended.
  • EI Premium freeze for the next two years
    • Premium rate for employees at the 2020 level of $1.58 per $100 of insurable earnings for two years. The rate for employers, who pay 1.4 times the employee rate, will also remain unchanged at $2.21 per $100 of insurable earnings.
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