Updated: Oct 28, 2020
Recently, there has been significant discussion about the potential for fraud within the CERB benefit program https://nationalpost.com/news/number-of-cerb-claimants-topped-number-of-jobless-by-a-million-last-month-statistics-show. While this is concerning and certainly requires follow up, it is the eligibility criteria that created the loopholes and this same criteria that is now dragging down the great Canadian re-launch.
No one will argue that individuals and companies who were told to stay home or mandated to close their doors don't deserve support. Due to significant amounts of consumer debt headed into the pandemic, the benefits undoubtedly needed to be rolled out quickly. While these factors were important in mid-March when the COVID-19 outbreak was declared a pandemic by the World Health Organization https://www.who.int/news-room/detail/27-04-2020-who-timeline---covid-19, some no longer seem to be relevant.
Criteria for the CERB benefit as outlined on https://www.canada.ca/en/services/benefits/ei/cerb-application.html is as follows:
The Benefit is available to workers:
Residing in Canada, who are at least 15 years old;
Who have stopped working because of reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits or Employment Insurance fishing benefits between December 29, 2019 and October 3, 2020;
Who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and,
Who have not quit their job voluntarily.
When submitting your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of your claim.
When submitting subsequent claims, you cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.
Early on, common sense supported points 2 & 4 but one has to question the other points aside from the residency requirement. Why set the age criteria at 15? This presumably qualifies a number of teenagers (presuming that they pass the $5,000 income test), who undoubtedly still live at home with Mom & Dad and likely have no ongoing expenses to cover. Why set the income test at $5,000 in 2019 in order to receive a benefit up to $8,000 in 2020? Why limit earned income to $1,000? Where is the incentive to end your epic Netflix binge?
The billion dollar question now is; does the government need to axe the CERB program? Until health measures are fully retracted, there will likely be a place for a CERB-like program, just not the current one set to expire on Oct 3/20. Criteria for an extended program could look like this:
Resident in Canada and at least 18 years old;
Pre-COVID employer is still mandated to close their doors or not re-hiring;
Pre-COVID employer is re-hiring but not following provincial re-launch health standards;
You have applied to at least 3 job postings in the past month and were not hired;
You are able to work but cannot find affordable child care (cost < 25% of gross income);
If you can answer yes to the above 5 questions (N/A acceptable for question 5 given the situation), then you would qualify for CERB for that month. In order to address the disincentive to go back to work, the $1,000 income threshold could be revised to a rolling repayment system.
Monthly income between $1,000-$1,500; no impact on CERB
Monthly income between $1,501-$2,000; $500 repayment
Monthly income between $2,001-$2,500; $1,000 repayment
Monthly income between $2,501-$3,000; $1,500 repayment
Monthly income between $3,001-$3,500; $2,000 repayment
The above system allows an employee to have gross employment income and CERB benefits of $3,500/month. All repayment amounts would be accounted for on your 2020 income tax return, much like the EI repayment system.
COVID-19 has ripped a path of destruction through our national economy but that is not a reason to accept fraudulent CERB claims or disincentivize employees from returning to work. A common sense approach can provide supports for those who are genuinely unable to find employment, while encouraging others to finish their Netflix binge and be a part of the greatest economic reset since World War II.
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