CERB Ending Announced -Merging into EI Program

a picture of woman looking at her finances denoting how will CERB ending announced will affect her moving forward.

CERB ending was announced a few days ago by the Canadian government and that the program will be replaced by a new EI program. There were not many details given on how this transition will unfold. However, they indicated that more details will be provided by the end of August. So what do we know about this change from the announcement?

CERB Ending Announced, When Does CERB end?

From the government’s website, a person can collect a maximum of 24 weeks of CERB within the time frame of March 15, 2020 to October 3, 2020. However, the new EI system will be ready in September according to the Employment Minister below:

“Speaking at a news conference later on Friday, Employment Minister Carla Qualtrough said the EI system is equipped to take in around four million applications at the beginning of September.”

Also, a quote from a recent CBC article indicates that those on CERB who already qualify for Employment Insurance will be moved to that program. So it seems at some point, perhaps in September, ones on CERB that quality will be shifted onto EI benefits.

What About People on CERB Who Do Not Qualify for EI?

It seems that the government will make a transitional benefit benefit for those who do not qualify for Employment Insurance. Here’s a quote from the Employment Minister about this:

“The government is promising a parallel, transitional benefit with EI-like components for those who can’t yet — and I emphasize yet,” said Employment Minister Carla Qualtrough — “get into the EI system. “

This provision seems to be temporary with the incentive to get people to qualify for Employment Insurance or back to work. However, we will have to wait for more details.

Will The Amount Payout Change with EI?

This appears to be the case as rates will be based on the Employment Insurance rate of 55% of a person’s normal weekly earnings up to a maximum of $573.00 per week. Here’s a quote from a recent article about this below:

“Benefit amounts may shrink for lower income recipients: Currently, EI regular and sickness benefits are equal to 55 per cent of one’s income to a maximum of $573 a week.”

As a result, the amount of money a lot of people receive will drop with the transition to EI. Many would have been receiving more with the $2000 per month CERB payment. Also, unlike CERB, ones on EI will have to be actively looking for work. However, it looks like the eligibility requirements will be lessened and training offered as indicated below:

“It will include access to training and the ability to work more hours without having as steep a clawback in benefit payments. 

The government is also promising to relax EI eligibility rules like the number of hours required to receive support payments. “

Conclusion, Why Announce CERB Ending Without Details?

It is a good question as the details are very thin. However, the point is that the government is giving sort of a “shot across the bow” to Canadians in that they want more Canadians back to work. This is because the government feels Canada is now in recovery mode from the virus. Here’s an excerpt from recent CBC article below:

“We believe that the CERB has served its purpose and the reason it was created is no longer the main focus of our efforts as a government to support workers,” Qualtrough said during a mid-afternoon press conference. “We are going to move on to something different.” 

And another quote from same article, “The Liberals are hoping the change prods more Canadians to either go back to work or look for a job as the economy moves into what the Bank of Canada has described as a recuperation period before a long, bumpy recovery.”

So are we in recovery from coronavirus? No one knows, as the virus is unpredictable and there is also fear of a second wave in the fall. However, the government is hoping that we are. Only time will tell.

One Time Disability Payment Canada for Covid-19

A disability sign to denote that the one time disability payment is for ones with disabilities during covid-19

Last week parliament approved the one time disability payment to Canadians with disabilities. It was part of Bill C-20 that also had the changes to the Canada Emergency Wage Subsidy program. The Canadian government says that about 1.7 million with disabilities should benefit from this program. So what are some details of this program? And how do Canadians who have disabilities apply to receive this one time payment?

One Time Disability Payment, How much?

The government of Canada’s website says that about 1.7 million Canadians can receive a one time payment of up to $600.00. Of note, this one time payment is non taxable and does not have to be reported anywhere. In a nutshell it is free money to spend as the recipients see fit. The government will move forward to start paying out on this once the bill receives Royal Assent.

How to Become Eligible to Receive the Payment?

The government of Canada’s website outlines three ways a person with disabilities can become eligible for the payment. Canadians with disabilities will have to fit in one of the three criteria the government has laid out. Here they are below:

  • They are holders of a valid Disability Tax Credit certificate (eligible persons not yet in possession of such a certificate would be able to apply for one up to 60 days after Royal Assent to be considered for the one-time payment).
  • Are currently receiving Canada Pension Plan disability benefits or Quebec Pension Plan disability benefits.
  • Or are in receipt of disability supports provided by Veterans Affairs Canada.

Conclusion

The government is hoping to help one of the most vulnerable groups to cope with the additional stresses due to COVID-19 with a non-taxable one time payment. This can be spent on whatever they need, and does not need to be tracked. During these uncertain financial times, any help that can be rendered is appreciated. Will it be enough to help Canadians during COVID-19? Only time will tell.

Canada Emergency Wage Subsidy Extension, New Adjustments and Details

A picture to denote person looking at finances to see if qualifies for the Canada Emergency Wage Subsidy Extension changes.

The Canada Emergency Wage Subsidy extension was passed through Bill C-20 this week. Along with the extension, there are significant changes to the program. I will try to break down these changes as clearly as possible.

Canada Emergency Wage Subsidy Extension

The Canada Emergency Wage Subsidy has been extended until December 19, 2020. Here’s a quote from an article from CPA Canada below:

  • allow the extension of the CEWS until December 19, 2020, including redesigned program details until November 21, 2020

What does this mean? It means that the program is extended until December 19, 2020 but the details of the program only go to November 21, 2020. There are no details yet on how the last four weeks of the program will be administered at this time. So what are the newest changes?

Canada Emergency Wage Subsidy Extension Changes, Elimination of 30% Revenue Test

As of July 5, 2020, applicants for the subsidy will no longer have to have at least a 30% revenue drop to apply for the Canada Wage Subsidy. If you have any kind of revenue drop, you can apply. Many felt that the 30% drop requirement was too strict and due to that, many businesses could not apply. The hope now is that more businesses can apply for the subsidy. However, the subsidy has now changed, with the program now having two components, the base subsidy and the top up.

Canada Emergency Wage Subsidy Extension Changes, Base Subsidy

As of July 5, 2020 , there will be a base wage subsidy for employers to claim for wages. For example, if your revenue drop was 50% or more then you will have a base subsidy of 60% of employees’ wage. If your revenue drop was 49% or less, then your base wage subsidy will be your percentage drop x 1.2 x employee’s wage.

However, this rate is only good for the first two 4 week periods as the rates drop off afterwards. For example, if your revenue drop was greater than 50%, your base subsidy rate in the 3rd 4 week period would drop to 50%, the next 4 week period to 40% and the next one to 20%. The same is true if your revenue extension was 49% or less. In the 3rd 4 week period, your base wage subsidy would be your percentage drop x 1.0 x employee’s wage. In the fourth period you have your percentage drop x 0.8 x employee’s wage. The 5th period you would have your percentage drop x 0.4 x employee’s wage.

Chart of Canada Wage Subsidy Extension Drop

Here’s a chart from the government’s website on the drop that I just described below:

TimingPeriod 5*:
July 5 – August 1
Period 6*: August 2 – August 29Period 7: August 30 – September 26Period 8: September 27 – October 24Period 9:
October 25 – November 21
Maximum weekly benefit per employeeUp to $677Up to $677Up to $565Up to $452Up to $226
Revenue drop     
50% and over60%60%50%40%20%
0% to 49%1.2 x revenue drop
(e.g., 1.2 x 20% revenue drop = 24% base CEWS rate)
1.2 x revenue drop
(e.g., 1.2 x 20% revenue drop = 24% base CEWS rate)
1.0 x revenue drop
(e.g., 1.0 x 20% revenue drop = 20% base CEWS rate)
0.8 x revenue drop
(e.g., 0.8 x 20% revenue drop  = 16% base CEWS rate)
0.4 x revenue drop
(e.g., 0.4 x 20% revenue drop = 8% base CEWS rate)

Canada Emergency Wage Subsidy Extension Changes, Top Up

A second part of the program is a top up available for businesses that have lost 50% or more in revenue. The top-up increases depending upon the revenue to a maximum of an additional 25% subsidy which would be added to the amount of your base subsidy. Here’s another chart from the government of Canada’s website that highlights this below:

3-month average revenue dropTop-up CEWS rateTop-up calculation = 1.25 x (3 month revenue drop – 50%)
70% and over25%1.25 x (70%-50%) = 25%
65%18.75%1.25 x (65%-50%) = 18.75%
60%12.5%1.25 x (60%-50%) = 12.5%
55%6.25%1.25 x (55%-50%) = 6.25%
50% and under0.0%1.25 x (50%-50%) = 0.0%

Canada Emergency Wages Subsidy Extension Changes, Safe Harbour Rule

What is the safe harbour rule? It is when an employer who was on the program prior to July 5, 2020 and was receiving wage subsidy for their employee(s) of 75%. For the next two periods ending August 29, 2020, they will either receive 75% of employee(s) wages or the next base rate plus top up, whichever is greater. However, after August 29th, they would be subject to the new changes fully.

Conclusion

The government’s changes to the Canada Emergency Wage Subsidy does have the potential to help more Canadian businesses. However, it is a short term solution as the program has a “weaning off process” as it pays less and less over time. So there is definitely incentive for businesses to get up and going quickly.

However, there are unknowns based on how quickly certain areas of the economy can recover from the pandemic and if there is another wave or surge. At that point all bets are off and was probably why the government did not provide details for last period going into December. As that is the great unknown. The changes are a bit complicated and will take some time to understand and hopefully more details will be provided in the days ahead.

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CERB Extension Details, How long? When Does it End?

A sign saying emergency to denote CERB extension details

The CERB (Canada Emergency Response Benefit) extension has been announced by the Canadian Government after much speculation. Many were wondering when and if this would happen due to the fact that a number Canadians who are on CERB would see their benefits end as early as the first week of July. And many people still don’t have jobs to go back to and the economic situation overall still feels pretty shaky. Here are the CERB extension details that were announced below:

CERB Extension Details

The CERB program has been extended an extra 8 weeks. So the maximum number of weeks a person can collect is now 24 weeks from 16 weeks. The amount remains the same, which means you would still collect $2000.00 for each 4 week period.

The criteria for collecting the additional 8 weeks are listed below from the government’s website:

CERB extended from 16 weeks to 24 weeks for workers who:

  • stopped working due 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.

Only apply for the CERB through either Service Canada or the Canada Revenue Agency (CRA) – not both.

CERB Extension Details – End Date of Program

Even though the number of weeks has been been extended, the program still ends on October 3, 2020. This means you would have to collect all 24 weeks before this date to get the maximum CERB benefit amount.

Conclusion

The announcement of the CERB extension is a relief for many Canadians as even though parts of the country are starting to open up, many Canadians are still in a perilous financial situation. Regarding what will happen afterwards, no one knows as the situation is fluid and still unpredictable. The reality is that a lot depends upon how Covid-19 spreads in the next while or if there is a second wave of the pandemic. Also, a lot depends upon how quickly the economy can recover. One thing is for sure: we are living in truly unique times.

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When Will CERB End? Canada Emergency Response Benefit program details

Sign saying the end to emphasis question of when will cerb end

When will CERB end? For the over 8 million Canadians who applied for the program, this is a question of upmost importance. The Canadian economy has been hit hard by the pandemic and millions of Canadians were left without work. However in recent weeks, different areas of the country are starting to open up. And people are starting to return to work. In spite of that though, there are millions who still cannot go back to work, because they don’t have a job to go back to, and they are wondering how long their benefits will last.

When Will CERB End? The Program Structure

According to the Government of Canada’s website, the Canada Emergency Response Benefit (CERB) Program goes from March 15, 2020 to October 3, 2020. This DOES NOT mean you can collect CERB benefits for this whole time period. Instead, it means you can collect CERB benefits within this time period.

You are eligible to collect $500.00 per week for a maximum of 16 weeks within the above time period. For example if you start collecting CERB on March 15, 2020 and you went 16 consecutive weeks then your payments would end July 4, 2020. Also, these 16 weeks do not have to be consecutive as long as they all fall into the above time period for the program.

When Will CERB End? Do I Only Need to Apply Once?

The answer is yes you only need to apply once, but you have to declare your eligibility to receive payments more than once. From the Government of Canada’s website, when you are applying for CERB, you are declaring eligibility for a four week period. For example, if you applied for CERB to start on March 15, 2020, you would collect CERB payments for a 4 week period from March 15, 2020 to April 11, 2020.

If you want to keep collecting CERB beyond this date than you would have to declare your eligibility for the next 4 week period. For example, if you applied for the CERB program through CRA than you can do this either online or by phone (1-833-966-2099). If you applied for the CERB program through Service Canada, you do this by completing your EI Report Card to confirm your eligibility to receive CERB for next period.

Will There Be an Extension of the CERB program?

Ah the billion dollar question, literally. There is increased talk about extending the CERB program as many Canadians will see their CERB payments end in early July, and many within this group will still not have work. Regarding the possible costs of extending the CERB program, the recent PMO report was highlighted below:

Budget officer Yves Giroux’s report says simply extending the maximum number of weeks to 28, and extending the program through to January 2021, would cost about $57.9 billion.

You add that figure to the $43.51 billion dollars already paid out in CERB and you are looking at a figure of at least $100 billion dollars that would need to be spent. That is an enormous financial commitment from the government which would then open up a myriad of questions such as who pays for this and so on. As a result, the debate goes on.

Conclusion

When will CERB end? The current answer depends upon your circumstances. However, simply put, it ends either by you collecting the maximum 16 weeks or when you return to work. Whichever comes first. Also, the program currently ends October 3, 2020 so even if you haven’t collected your full 16 weeks by this dates, your CERB ends also.

However, as we can see from the above, this could all change and the program could be extended. But for the time being, this is the program’s parameters currently. And that is important to know, as all of us have to make big decisions regarding our life during this pandemic and subsequent economic crisis. Plan well and stay safe.

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Additional Support for Seniors During Covid-19

A picture of senior to denote the governments measures to provide additional support for seniors during covid-19

On May 12, 2020, the Canadian Government announced additional support for seniors during covid-19 to help them offset the increased cost of living resulting from the pandemic. Also announced was measures to help seniors deal with isolation and improve their quality of life. Finally, there was an extension of payments and allowances for seniors. Let’s take a look at each one of these new supports one by one.

Additional Support for Seniors During Covid-19, One Time Tax free Payment

The prime minister announced  a one time tax-free payment of $300 for seniors eligible for the Old Age Security (OAS) pension, with an additional $200 for seniors eligible for the Guaranteed Income Supplement (GIS). This would give a total of $500 to individuals who are eligible to receive both the OAS and the GIS. The goal is to help seniors cover increased costs caused by the pandemic.

Additional Support for Seniors During Covid-19, Additional Funding to New Horizons for Seniors Program

The Government also announced that it is investing an additional $20 million dollars into the New Horizons for Seniors Program. The is to help support organizations that offer community based projects that help reduce isolation, improve the quality of life for seniors, and help them maintain a social support network.

Additional Support for Seniors During Covid-19, Extension of Allowance Payments

The government is temporarily extending seniors’ GIS and Allowance payments even if their 2019 income information has not been assessed. This will ensure that the most vulnerable seniors continue to receive their benefits. Also, seniors are encouraged to submit their 2019 income information as soon as possible and no later than by October 1, 2020. By doing so, they will avoid an interruption of benefits.

Conclusion

The government is trying to help the most vulnerable people affected by this pandemic and many seniors definitely fall into this category. The latest measures announced are a way to address this and hopefully many seniors can apply and will be helped by this. Even if the amounts are small, it is all a help. As the old saying goes, every little bit helps.

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Canada Emergency Student Benefit, What is it?

A picture of a student at university to denote that students will need the Canada Emergency Student Benefit program.

Wondering what the Canada Emergency Student Benefit is? It is an important question to answer if you are a student. As a student, you’re likely wondering how you can earn money this summer during this pandemic. On April 22, 2020, the government outlined a program to help these students in this situation.

What is the Canada Emergency Student Benefit Program?

It is a relief program proposed by the government of Canada to help post-secondary students who aren’t able to find full-time employment or cannot work due to COVID-19. Also, if they are not eligible to receive either Employment Insurance benefits (EI) or the Canada Emergency Response benefits (CERB). Many post-secondary students are not eligible for either of these programs as they have not worked enough to qualify.

How Much Do You Get and For How Long?

Students who qualify would receive $1250 per month for up to 4 months (May 2020 to August 2020). If the student has a disability or has dependents, they can receive an additional $750 per month.

Canada Emergency Student Benefit Program, Who is Eligible?

Here are the details from the Government of Canada’s website below:

  • Students who are enrolled in a post-secondary education program leading to a degree, diploma, or certificate.
  • Students who ended their studies or graduated no earlier than December 2019.
  • High-school graduates who have applied for and will be joining post-secondary programs in the coming months.
  • Canadian students studying abroad meeting one of the above criteria.

When Can I Apply? Update!

You can apply for the program starting on May 15, 2020 at 6 am Eastern time. For more details on how to apply and inputting an online application please go to the Government of Canada’s website.

When Will I Get Paid?

The most important question of course! The Government of Canada’s website says that if CRA has your direct deposit information, your payment will take 3 business days. If not, then a cheque will take about 10 business days.

Conclusion

The Canada Emergency Student Benefits Program is a way to help the many students who cannot find employment. It helps close the gap of students who don’t qualify for Employment Insurance or the Canada Emergency Response Benefits Program. Hopefully the program will be up and running shortly. When we get more details, we will update this page with further information.

BMO Mastercard Cashback Changes – Is it Worth it?

A picture of a mastercard to highlight BMO mastercard cashback changes.

BMO Mastercard cashback changes coming May 2020! This is the announcement that many cardholders received in their email recently. At first glance the changes look exciting and potentially a money saver for customers. However, let’s take a deeper look at these changes and see if this is really so.

BMO Mastercard Cashback Changes

Currently you can earn 1% cashback on all purchases regardless if it is a one time purchase or a recurring purchase such as a monthly bill payment. Also, the purchase has to be at least $50.00 before you get the 1% cashback.

However starting May 1, 2020, you can start earning 3% cashback on grocery purchases, 1% on recurring bill payments and 0.5% on other purchases. For one time purchases the minimum purchase is only $1.00. The minimum purchase for recurring bill payments is $25.00. Also, you do not have to wait until the end of the year to redeem your cashback. You can do it immediately by having it deposited into a chequing or savings account or you use it as a credit on a monthly statement.

This sounds great! It looks like you’lll be getting more cashback that you can use sooner. Sounds like a win win situation. However, there is a “but”; there’s always a “but”.

BMO Mastercard Cashback Changes, The Fine Print!

Yes, there is always the fine print and there a few things with this card that you should know about. For instance, there is a $500.00 monthly limit on getting 3% cashback. Any grocery purchases over $500.00, you will still only get 0.5% cashback. Also, you would have to make sure that the grocery stores you go to are deemed grocery stores by BMO.

There is also a $500.00 monthly limit on getting 1% on recurring purchases bill payments. Any recurring purchase amount that is over $500.00, you only get 0.5% cashback.

Conclusion, Is it Worth it?

It depends on how much you spend on your credit card. For example, suppose you spent $500 on groceries, $500 on recurring bill payments, and $2000.00 on other purchases. Based on the new changes, you would receive $30.00 cash back. Do you know how much you would receive in cashback for same amount currently? You would also get $30.00! What does this mean?

It means that if you are putting more than $3000.00 each month on your card, then the changes do not benefit you as you would actually be getting less cash back. However, if you are spending at least $500 in groceries and at least $500 in bill payments but are putting less than $3000 per month on the card, then the changes are helpful to you, as you’ll get more in cashback.

So is the BMO MasterCard cash back changes worth it? If you do not put a lot on your credit card then potentially yes! However, if you charge a lot on your card each month then potentially it is not. This means that you as the consumer have to know your spending habits and read the fine print on any credit card you might want. Because with so many things in life, there’s always a catch!