As of July 31, 2020, the Canada Emergency Response Benefit (CERB) is set to expire on October 3, 2020. While the program was extended for eight weeks in June, that did not affect the program’s scheduled phase-out date. The extension was to the maximum number of weeks you could receive the benefit for, not the availability timeline.
If you’re currently receiving the CERB, you’re likely to run out soon. Given that, you’d be wise to begin preparing for life after it had gone. While payments can be received retroactively, such payments won’t be available if you max out your eligibility. Here are some options to cope with life after CERB.
Look for income opportunities
The most obvious way to prepare for life after the CERB is to look for a job or other income opportunities. In this current climate, it may be hard to get your job back but there’s no harm in getting creative about earning additional income while you continue to search for new employment opportunities. This might mean taking on “gig” work through a variety of digital networks (e.g. Skip the Dishes, DoorDash, Upwork, Fiverr, Uber, Lyft, etc.) or taking on part-time employment in the service industry (e.g. restaurants, coffee shops, grocery retailers, etc.)
“Simplified” EI Program
The Federal government recently announced a “simplified” Employment Insurance (EI) program that will give Canadians, who were already eligible for EI, the opportunity to transition to when CERB winds down — as well as several new benefit programs for workers who do not qualify for EI.
Firstly, a new “Canada Recovery Benefit” that pays $400 a week for up to 26 weeks will replace it for those ineligible for EI, such as contract, self-employed, and “gig” economy workers. Anyone eligible for EI will get the same minimum for at least 26 weeks and will need to have worked 120 hours to qualify, well below current EI requirements, since many Canadians have been unable to work to the pandemic.
The second is the “Canada Recovery Sickness Benefit” which offers 10 days of paid sick leave to any worker in Canada who falls ill or has to self-isolate. This benefit will provide $500 per week for up to two weeks and is meant for those who don’t already have paid sick leave through their employer.
The third program called the “Canada Recovery Caregiving Benefit”, is meant to provide help for those who need to stay home to care for a loved one such as a child under the age of 12 or other dependents, because schools, daycares, or other care facilities are closed due to the pandemic. This program offers $500 a week for up to 26 weeks per household, with just one adult per household able to claim the program at a time. However, this benefit can only be used when facilities are closed, not just because someone would prefer to keep their loved one at home.
These new benefits will come into effect on September 27, 2020, and they are taxable, meaning tax will be deducted from the payments from these three benefits.
Those claiming EI can still earn income, but will have their benefits adjusted to a reduction of 50 cents for each dollar of earnings. The government is also freezing the EI premium rate for two years, as it would typically be set to increase, raising costs for workers and employers.
How do I know which benefit I’m eligible for?
EI, like the name suggests, is like insurance—you only receive benefits when you pay the premium for a minimum period. If you have worked with employers who deducted an EI premium for their salaries, you are eligible. In order to qualify, you must be completely out of work with no wage income.
How do I apply for the new CERB alternatives?
A new website launching in mid-September will give you access to the three new benefits highlighted above when their application windows open. Applications for the new recovery benefits are scheduled to open in October, with payments flowing in three to five days later.
Better days ahead
Going forward, I hope British Columbians will take the opportunity to learn from this hardship and focus on strengthening their finances. This might mean putting in measures to withstand a crisis: an emergency fund or even a line of credit, review your budget and expenses, and eliminate any high-interest debt. It’s ok to start small, acknowledging that saving can be difficult due to the high cost of living.
We can all learn from this, become more adaptable and have some structure in place for if something happens again. We’ll come out on the other side.
