Almost 100,000 students to get break on CERB repayments
Many students who got CERB should have applied for the lower paying Canada Emergency Student Benefit
Nearly 100,000 students asked to repay CERB benefits they claimed during the COVID-19 pandemic could soon get a break.
Under an order in council, adopted without fanfare earlier this month, students will be able to deduct the amount they could have collected under the COVID aid program for students, from the amount of CERB benefits they are being asked to repay.
Carla Qualtrough, minister of employment, workforce development and disability inclusion, said the government realized when it followed up on the benefit payments it made during the pandemic that many students who received benefits under the Canada Emergency Response Benefit (CERB) should have actually applied for a different program – the Canada Emergency Student Benefit (CESB).
While the CERB program paid out benefits to workers who had lost their jobs because of the COVID-19 pandemic, the CESB was designed to help students who were unable to find work in the first place because of the pandemic.
In some cases, students have been told that they have to repay thousands of dollars in CERB payments they received but that it was too late to apply for the student benefit.
A remission order, adopted by cabinet June 2, sets out to address what Qualtrough describes as an "inequity."
"If we determine that you owe money for CERB, you may say to yourself, well if I'd known I wasn't eligible for the CERB, I would have applied for the student benefit because I know I was eligible for that," Qualtrough said in an interview with CBC News. "You're the person we're going to help with this. You're the person for whom we are correcting this inequity."
Qualtrough estimates the move could help an estimated 98,000 students.
No other remission orders in the works: Qualtrough
While CERB payments came in at $2,000 a month, the student benefit program paid $1,250 a month, said Qualtrough. She said that amount can now be used to reduce the amount of money some students are being asked to repay.
"That will really significantly offset any amount that people will be deemed to owe in repayment of the CERB."
When the government first telegraphed its plans to fix the problem in last December's fiscal outlook, it budgeted $67.9 million for debt relief.
Qualtrough said the adoption of the remission order was delayed in part because the government put a hold on CERB overpayment collections because of the Omicron wave of COVID-19.
"We had decided, because of Omicron, not to actively pursue CERB debt at that point," Qualtrough explained. "So now that we are back to the point where we are following up with individuals telling them what they may owe on CERB, we are now in a position to implement this remission order at the same time."
Watch: Help on its way for students asked to repay CERB money:
In order to qualify for the remission order, a student would have to have applied for CERB no later than Sept. 30, 2020 and not received benefits like the CESB, Employment Insurance or provincial parental or maternity leave benefits at the same time. They also have to meet one of three criteria: they were unable to work due to COVID-19; they were looking for work; they worked and earned $1,000 or less before taxes during the four week CESB period they could have applied for.
The Canada Revenue agency has set up a website outlining the terms of the remission order and a link to the application form.
CBC News asked CRA if they are informing students about the remission order when they send out the repayment notices. Spokesman Christopher Doody says the CRA isn't mentioning the potential break for students in its repayment notices because it "does not have a way to identify individuals who would be eligible under the remission order."
If a student has already repaid the CERB benefits they received, they will be reimbursed the difference, Qualtrough said.
Qualtrough said the government doesn't have any plans at the moment for any other remission orders
While the government is notifying some CERB recipients that they have to repay benefits, Qualtrough said the government is "desperately trying to make this as painless as possible for people" and allow them to make payments over months or even years.
"We're really trying to be as flexible as possible, trying to make sure that…this doesn't make or break someone's ability to pay their bills," said Qualtrough, adding the majority of people applied for CERB benefits in good faith, thinking that they were entitled to CERB.
A financial squeeze
Taylan McRae-Yu, director of strategy for the Canadian Federation of Students, said his group is pleased to see the help for students but believes the government should go further.
"COVID and the cost of living crisis along with the rise in tuition have forced some students to choose between repaying an additional loan, basic needs and their academic success."
One of the former students who received a repayment letter in May from the CRA is Joanna Clark. She initially applied for employment insurance and was instead given CERB benefits. Now, the elementary school teacher is being asked to pay back $2,000 she doesn't have.
Clark said the government has not notified her about the remission order. She is hoping she qualifies for it.
"If it means that I don't have to pay back $2,000, it would make a world of difference."
Daniel Blaikie, NDP critic for employment and workforce development, accused the government of a double standard, saying it is letting corporations off the hook while making Canadians repay benefits.
"Canadians are struggling with record housing and grocery costs," Blaikie said in a statement. "It is not a time for this government to be chasing the most financially vulnerable for money they don't have. This is only a small reprieve for students, who will continue to be hounded for a significant share of their CERB debt during these challenging times."
Blaikie said the government should offer a CERB debt amnesty for Canadians living below the poverty line and debt deferral for middle class Canadians struggling to keep their homes amid high interest rates.
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