Some self-employed Canadians caught up in CERB confusion won’t have to repay: source

Some of the self-employed Canadians who faced repaying thousands of dollars in Canada emergency response benefit (CERB) money will be let off the hook, according to a government source.

The formal announcement will be made later Tuesday.

According to a government source not authorized to speak publicly, self-employed Canadians who applied for CERB and would have qualified based on their gross income will no longer be required to repay. This is provided they met all the other eligibility requirements and applies regardless of whether they applied through the Canada Revenue Agency or Service Canada.

Those who meet that description and have already voluntarily repaid their CERB will see the money returned to them, according to the source.

The information was first reported by The National Post.

In November and December of last year, some 441,000 Canadians received so-called education letters from the CRA saying they may not have met the requirements for the thousands of dollars in CERB payments they had received and might have to pay the money back.

Some self-employed Canadians said they were being told by the tax agency that the problem was related to how they calculated whether they met the threshold of $5,000 in income in 2019 or in the last 12 months.

Many reached out CBC News to say they believed that meant all income, since there was no mention of expenses. The CRA insisted self-employment income always refers to “net, pre-tax income,” or gross income minus expenses.

PM had been unclear on repayments 

However, later that month it became clear the CRA hadn’t always been explaining it that way. The Union of Taxation Employees revealed that its members had been given the wrong description of how income was calculated and passed that incorrect information along to CRA callers for about three weeks before the problem was corrected.

At the time, Employment Minister Carla Qualtrough said her government wasn’t considering debt forgiveness for people affected.

“There’s not a conversation happening right now where we would forgive people, where we would not require people who were not eligible to pay it back. No,” she told CBC News in December.

The prime minister was less clear in a year-end interview with CBC’s chief political correspondent Rosemary Barton.

“We’re gonna work with them and I don’t want people to worry over Christmas. The system needs to be fair but it also needs to be there to support the most vulnerable. That’s the decision we took from the beginning — we’ll have Canadians’ backs.”

The prime minister was asked repeatedly if some CERB applicants might not have to repay. He said the government was looking at “a range of possibilities.”

“Everyone’s in different situations. We’re going to work with people, we’re going to look at what the options are, but I don’t want people to worry about repaying this holiday season,” he said at the time.

The federal government is also expected to announce Tuesday that Canadians with pandemic benefit debt will have up to a year to repay the amounts owing without accumulating any interest. 

The move applies to those who made up to $75,000 in taxable income in 2020 and received one of the federal government’s five pandemic relief benefits or employment insurance benefits.

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