Unconscionable Threats Against Recipients of Emergency Benefits
Government Now Drops Demands for Repayment
Applications for the Canada Emergency Response Benefit (CERB) for
those self-employed in 2019 opened on April 6, 2020. Government agents
and the official website said qualified applicants needed to prove a
gross income of $5,000 from self-employment for the 2019 taxation year
and that COVID-19 was negatively affecting their
income in 2020. The government subsequently announced at the end of the
year that this information was incorrect and was meant to be "net"
income of $5,000 not "gross" income.
This enraged many who had received the subsidy and were in no
position to pay it back. Copies of the government website from April 6
to April 21, 2020 showed that "gross income" was the qualification for
the CERB. Even after April 21, some Canada Revenue Agency (CRA) agents continued to give
out misleading information that the requirement was based on
gross income.
By April 21, thousands of self-employed people had already made
their applications and later began receiving the CERB based on a
gross income of $5,000 or more for 2019. The government later in 2020
sent many of them a letter that they "may" have to pay the benefit
back. Needless to say, most of those under the gun to repay the
benefit are living near or under the poverty line and the letter was
distressing to say the least.
In response to the government's unconscionable demand for repayment,
a semi-retired Mississauga teacher initiated a class-action lawsuit
against the federal government on behalf of the self-employed affected
by the confusion over eligibility for the CERB. The lawsuit said the
CRA must cease any demand to repay the benefit, as the fault and
responsibility for the confusion rested squarely with the government
and repayment of the benefit would cause hardship for many recipients.
Now, on February 9, the CRA issued a press release
saying it is rescinding the demand for repayment by self-employed
individuals who applied for the CERB and would have qualified
based on their gross income. They "will not be required to repay the
benefit, provided they also met all other eligibility requirements. The
same approach will apply whether the individual applied through the
Canada Revenue Agency or Service Canada," the press release says.
"This means that, self-employed individuals whose net
self-employment income was less than $5,000 and who applied for the
CERB will not be required to repay the CERB, as long as their gross
self-employment income was at least $5,000 and they met all other
eligibility criteria," the press release says. It adds: "Some
self-employed
individuals whose net self-employment income was less than $5,000 may
have already voluntarily repaid the CERB. The CRA and Service Canada
will return any repaid amounts to these individuals. Additional details
will be available in the coming weeks."
Janet Ryan, the semi-retired teacher who initiated the lawsuit
against the government's demand for repayment, made a little over
$5,000 gross from part-time tutoring in 2019 plus the regular payments
from her Canada Pension Plan and Old Age Security. Automatic tax
deductions reduced her net income from working to below $5,000.
Because she earned so little she and many others received a
notification from the government to repay the CERB.
Ryan said her tutoring income in 2020 was being negatively affected
by COVID-19 and, after checking the eligibility requirements on the
government's website in April she applied for and received the CERB.
Ryan and 441,000 other Canadians received the same government
letter threatening they may have to repay the benefit, causing
alarm and distress to many and their families.
Ryan says the threatening letter was the first she and many others
had heard that their eligibility for CERB was based on net and not
gross income. They
only realized they were not eligible for the CERB after
receiving the letter.
Many like Janet Ryan had been told by CRA agents before
they applied for the benefit that they qualified. The CRA actually
admitted some agents were giving out wrong information and in addition
the CRA website contained wrong information through most of April.
Nonetheless, the demand for repayment stood.
The government has now rescinded the order. Demands for repayment were unconscionable.
This article was published in
Number 4 - February 10, 2021
Article Link:
Unconscionable Threats Against Recipients of Emergency Benefits: Government Now Drops Demands for Repayment
Website: www.cpcml.ca
Email: editor@cpcml.ca
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