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Unconscionable Threats Against Recipients of Emergency Benefits Government Now Drops Demands for RepaymentApplications 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 Article Link:   Website: www.cpcml.ca Email: editor@cpcml.ca |
