When CERB was first announced, it was intended to be a maximum three or four payment support. The level of $5,000 (whether gross or net) doesn’t seem as egregious by the recipient if taken in that context. The CERB then morphed into a semi welfare system when it was extended. My feelings on CRA’s ability to recoup benefits paid to the “gross” or “net” self-employed income group are based solely on legislation. I’m not making a political or social statement. (EDIT - other than to say the gov’t has made a complete mess of this situation)
Having said that, let’s remember that CERB is not the ITA; it is a separate piece of legislation that does not define “income from self-employment” and has no reference to the ITA definition of that term. CRA keeps referring to the ITA meaning of the term when they know that there is no connection between the ITA and the CERB Act. CRA’s web site “clarifications” mean absolutely nothing in law and should be ignored unless/until the CERB Act is amended. Nine months after the CERB Act was issued, with the obvious error in the definition, the Dept of Finance still hasn’t corrected it. That’s why I feel that these mistaken advances will be let off the hook. Although the CERB Act doesn’t contain any appeal provisions, some lawyer will take up the case and successfully sue the government.
I agree. I think a lot of this mess could have been avoided if CRA added their “clarifications” to the attestations instead of just to the Q&A on a separate website. Recipients were required to re-attest to each qualifying period but many don’t re-read Q&A after they’ve already applied.
At this point, there doesn’t appear to be any disadvantages to waiting.
You can’t ask people to attest to having at least $5,000 income from employment or “net” self-employment because that isn’t what the CERB Act says. The problem is that the CERB Act is a flawed piece of legislation. The gov’t has stepped in a mess and there is no easy way out.
Good News:
Yesterday (February 9, 2021), CRA posted a news release that the Government of Canada and CRA will honour the $5,000 GROSS INCOME for CERB, and that it will REPAY all those who returned CERB money to them. The News Release also states that it will provide interest relief until April 22, 2022 for those who had income of $75,000 or less, applied for one of the federal covid related benefits, and file their 2020 income tax return.
I agree that it’s not great news but it is the correct answer. The gov’t messed up the legislation and really had no legal basis for insisting on their intention that the self-employment income was supposed to mean “net”. The only “good news” is that the gov’t is held to follow the law as written and can’t legislate by FAQ’s on the internet.
I had an irate client call and tell me that I screwed them out of 14,000, because I told them that they weren’t eligible based on having less than 5K in net income. I said, based on the eligibility information available at the time, you did not qualify. You still don’t qualify. I did mention that if I had told you to apply and Gov’t told you to pay it back, would you be calling me and saying I am costing you 14K.
Unfortunately I expect some lawyer to initiate a class action for all those individuals that were told they did not qualify for CERB based on having less then 5K in net income, but did have 5K in gross income.
In the end we all will be the ones paying for this and present and future Covid related funding as I expect to see taxes increase shortly after the next election.
Off topic… but like many here, I have a client who owned a restaurant. He has been ordered closed in order to do his part in stopping the spread of Covid-19. Those responsible for deciding the fate of others keep mentioning “we are all in this together”. The poor guy told me that if these civil servants “working from home” and who haven’t suffered financially would give up half of their pay cheque to help those who have been ordered closed they might have a right to say “we are all in this together”.
