Self-employed Canadians who received up to $14,000 in Canada Emergency Response Benefit (CERB) payments but were later told they were ineligible after a messaging mix-up won’t be forced to repay.
Prime Minister Justin Trudeau made the announcement Tuesday in a reversal of his government’s previous position on the issue.
“For people who accessed CERB based on their gross income instead of net income, as long as you meet the other eligibility criteria, you will not have to return those CERB payments,” Trudeau said during a press conference.
In a release, the Canada Revenue Agency (CRA) said those who have already repaid their CERB money will have it returned. More details will be provided in the coming weeks.
The move comes just over a week after a proposed class-action lawsuit was filed against the federal government on behalf of retired Canadians impacted by the confusion over CERB eligibility.
In late 2020, the Canada Revenue Agency (CRA) sent out 441,000 letters saying an eligibility condition to have income of at least $5,000 in 2019 or in the 12 months prior to applying refers to “net pre-tax income” rather than “gross income” for self-employed individuals.
Early CERB eligibility guidelines, however, made no mention of the net-income requirement.
Janet Ann Ryan, the representative plaintiff of the proposed class action who applied for the CERB based on having earned $5,000 in gross income in 2019 from tutoring, told Global News she was “shocked” to receive one of the CRA letters.
“It didn’t make sense,” she says. “It didn’t seem right.”
Last month, Employment Minister Carla Qualtrough said forgiving repayments for CERB recipients affected by the mix-up was not on the table.
Trudeau also announced Tuesday that his government is forgiving interest on certain 2020 tax debt.
“If you received federal emergency benefits – like the CERB – and you made up to $75,000 in taxable income, you will not have to pay interest on 2020 tax debt until April of next year,” Trudeau said. “Our priority is ensuring that you and your family get through this pandemic and back on your feet.”