What You Need to Know About the Canadian Recovery Benefit (CRB)
I am going to start by saving the CRB is different from CERB in so many ways. If you don’t fully understand the different eligibility and income rules, you could get yourself into a lot of trouble come tax time. So let’s dig into the ins and outs of CRB so you don’t end up owing money back to the government that you are surprised by!
First up, a quick disclaimer that things change, and you should do your due diligence before you apply to make sure you are eligible! :)
Now let’s look at, the application period. It is different from CERB. With the CRB benefit, similar to EI, you apply for 2-week periods. The benefit pays $1,000 for the 2-week period but $100 will be withheld for taxes, so $900 will be the amount you receive. Note: that depending on your tax bracket for the year, the 10% that they are withholding may not be enough. This could mean that you owe at income tax time. You are able to collect for up to 26 weeks.
If you do collect the CRB, you may have to pay some if back, depending on your income. If your net income for the year you collect payments is over $38,000, at income tax time, you will be required to pay back $0.50 for every dollar of net income you earned above $38,000. To calculate your income amount you include CERB payment but DO NOT include the CRB payment.
Here is a quick example:
If you collected CRB in 2019 and your income for the year was $42,000, here is what the math looks like.
$42,000 - $38,000 = $4,000 x $0.50
$4,000 x $0.50 = $2,000
So, at tax time, part of your details will include you owing $2,000 because you earned over $38,000
If you are self-employed, this means that it is even more important to have your shit together with your bookkeeping. If you need some help, click HERE to see my upcoming workshops, that include 2 on bookkeeping. One with Wave (free software) and the other with Quickbooks.
Now the most important thing. Are you eligible? To be eligible for the CRB benefit you have to be either:
Not employed or self employed because of COVID-19 (translation, you had to fully close your business or lost your job because of COVID-19) OR
Your income has been reduced based on your average weekly income compared to the previous year because of COVID 19.
Now, how the hell do you do the math to calculate if the second one applies to you? This will be super fun, oh wait, you don’t like numbers as much as me, do you? I’ll try to make this as easy as possible.
First, you need to know your employment AND self-employment income for either 2019 OR the last 12 months.
Take the income and divide it by 52 so you get your average weekly earnings for the 12 month period.
So let’s break this down. If you had $30,000 in employment and self-employment income in 2019, you divide that by 52 to get $576.92.
Then divide that number by 2 (in this case you get $288.46). This is the number that represents 50% of your income from either 2019 OR the previous 12 months.
Next you need to know your employment or self-employment for the two-week period you are reporting for. If it is above the number you calculated above, you are not eligible. If it is below, you are eligible to apply for CRB.
Here’s a big question that needs to be answered. What counts towards your employment and self-employment income?
For those of you that are self-employment, your income this is your total biz income from all sources, minus your biz expenses
For employment or self-employment income, be sure to include all income, including tips and non-eligible dividend payment.
Here are some additional pieces of information to understand if you are eligible for CRB:
You ALSO are not eligible if you applied for and receive any of the following benefits. CRSB, CRCB, short-term disability benefits, EI or QPIP.
To be eligible for CRB you must not be eligible for EI.
You have to reside in Canada and have been in the country for the two week period you are applying for.
You have to have earned at least $5,000 in 2019, 2020 or the 12 months before the date you are applying.
You did not voluntarily quit or reduce your hours on or after September 27, 2020 unless it was reasonable to do so (no I don’t know what falls under reasonable, but if you aren’t sure, it’s best to contact CRA).
You have to have been seeking work for the reporting period (either employment or self-employment).
Click HERE to find a link to the CRA’s website to learn more, like what are the eligibility periods. If you are unsure if you are eligible, or have other questions, call the recovery benefit line for general inquiries at 1-833-966-2099.
I’ll leave you with a final reminder: breath! 2020 was challenging and 2021 is still challenging, you are doing you best, so give yourself some grace.
If you are ready to build your first budget click HERE to download my free budget tool.
If you would like to chat about how working with me can help you feel in control of your money, click HERE to book a no charge 20 min Zoom chat.
~Sherry
