The new Canada Recovery Benefit is effective from September 27, 2020 to October 23, 2021 for one year and provides a benefit amount of $1000 ($900 after taxes withheld) or $600 ($540 after taxes withheld) per 2-week period for up to 54 weeks to workers who are not eligible for EI, mainly the self-employed and including those working in the gig economy. These individuals may still require income support if they continue to be unable to return to work due to COVID-19 or had their income reduced relative to pre-COVID-19 pandemic (attestation-based).
The benefit would be available to residents in Canada who:
- are at least 15 years old and have a valid Social Insurance Number (SIN);
- have stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19;
- have not turned down reasonable work during the 2-week period you’re applying for;
- were not self isolating or in quarantine due to international travel;
- have filed a 2019 or 2020 tax return
- are not eligible for Employment Insurance;
- had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; and,
- have not quit their job voluntarily.
Workers apply after every two-week period for which they are seeking income support and attest that they continue to meet the requirements. In order to continue to be eligible for the benefit the claimant would need to look for and accept work when it is reasonable to do so. The benefit is taxable.
To encourage claimants to return to work, they would be able to earn income from employment and/or self-employment while receiving the benefit, as long as they continue to meet the other requirements. However, to ensure that the benefit targets those who need it most, claimants would need to repay some or all of the benefit through their income tax return if their annual net income, excluding the Canada Recovery Benefit payment, is over $38,000. In other words, claimants would need to repay $0.50 of the benefit for each dollar of their annual net income above $38,000 in the calendar year to a maximum of the amount of benefit they received.
For more information about the Canada Recovery Benefit or to apply, see HERE.