Individuals & trusts – COVID-19 emergency support measures

Details available as of September 28, 2020

As part of measures to help Canadians manage through the COVID-19 pandemic, the federal government introduced numerous proposals. Here is a breakdown of key measures related to individuals and trusts. Measures continue to be updated and refined by the government; therefore, please also refer to the government website for up-to-date information.

Income tax filings and payments for individuals and trusts

  • Canadians now have until June 1, 2020 to submit their 2019 income tax return, instead of an April 30 filing deadline.
  • Self-employed individuals still have until June 15, 2020 to submit their 2019 income tax returns.
  • Trusts that operate on a December 31, 2019 taxation year, such as family trusts, will have until May 1, 2020 to submit the 2019 trust income tax return, instead of a March 30 filing deadline.
  • The payment due date for 2019 individual and trust income tax returns, as well as instalment payments, are now extended to September 30, 2020. Furthermore, the Canada Revenue Agency (CRA) has indicated that they will not charge late-filing penalties for 2019 individual and trust income tax returns as long as they are filed by September 30, 2020.
  • • Quebec is following the same deadlines for Quebec income tax returns.

Please refer to the CRA’s webpage on COVID-19 for further details to taxes and benefits

 

Canada Emergency Response Benefit (CERB)

The CERB is a temporary income support program, primarily for individuals who involuntarily cease working because of COVID-19.

Amount

The CERB provides eligible individuals with taxable payments of $500 per week, for a maximum of 28weeks (i.e., $2,000 a month for 7 months). It is important to note that no income tax withholdings will be made on the CERB payments and thus recipients must budget for this on their 2020 income tax returns.

The CERB eligibility period is from March 15, 2020 until September 26, 2020. Eligible individuals have to apply for each 4-week period.

Eligibility

Eligible individuals include the following:

  • Workers who stop working due to COVID-19 and do not have access to paid leave or other income support
  • Workers who are sick, quarantined, or taking care of someone who is sick with COVID-19
  • Working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures
  • Workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work
  • Wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance

Furthermore, eligible individuals:

  • Need to have earned at least $5,000 of income in 2019 or in the 12 months prior to application.
    • Owner-managers can use non-eligible dividends received as part of this test.
  • In the first claim, cannot earn more than $1,000 in income for at least 14 days in the application period.
  • For subsequent claims, cannot earn more than $1,000 for the entire application period.

In other words, the CERB will still be available for individuals who may continue to work during the pandemic, but earn less than $1,000 a month.  

How to apply

Applications for this benefit are completed through the CRA website. The CRA will continue to accept and process retroactive applications for the final eligibility period that ended September 26, 2020.

Updates to Employment Insurance (EI)

Once the CERB ends, individuals who still require income support may be able to transition into a more simplified and accessible EI program starting September 27, 2020. Relevant changes are intended to allow more individuals to access EI and include:

  • Providing a one-time, temporary insurable hours credit for Canadians, which effectively allows individuals who have completed at least 120 insurable hours in the past 52 weeks to access EI benefits.
  • Providing a minimum EI benefit rate of $400 per week (or $240 per week for extended parental benefits) for new EI applicants as of September 27, 2020.
  • Providing a minimum entitlement duration of 26 weeks for regular EI benefits.
How to apply

Please refer to the Employment Insurance website  for further details on how to apply for EI benefits.

Post-CERB recovery programs - proposed

Three additional recovery benefits were proposed for individuals who continue to require income support after the CERB ends but may not be able to transition to EI. All three benefits will be available for one year starting September 27, 2020:

  1. Canada Recovery Benefit (CRB) – The CRB provides $500 per week for up to 26 weeks to workers who are not eligible for EI. This benefit is intended for individuals who are unable to qualify for EI after CERB, such as self-employed individuals. The CRB includes a claw-back—individuals have to repay $0.50 of the CRB they receive for each dollar of their annual net income above $38,000 (excluding the CRB).
  2. Canada Recovery Sickness Benefit (CRSB) – The CRSB provides $500 per week for up to two weeks for individuals who cannot work because they are ill or have to self-isolate due to COVID-19. This benefit is intended for individuals who do not have a paid sick leave program.
  3. Canada Recovery Caregiving Benefit (CRCB) – The CRCB provides $500 per week for up to 26 weeks for individuals who cannot work because they are caring for a family member as a result of COVID-19. This benefit is intended for individuals who do not have a paid leave program.
How to apply

The three post-CERB recovery programs are proposed and are not yet enacted into law. Once enacted, the benefits will retroactively apply to begin as of September 27, 2020. It is expected that applications will be available through the CRA. Please refer to the following webpage  for further details and updates.

Canada Emergency Student Benefit (CESB)

The CESB is an income support program for post-secondary students who face financial hardship as a result of COVID-19 but may not be eligible for the CERB program. For example, a student who worked a summer job in 2019 but earned less than $5,000 of income that year is not eligible for the CERB.

Amount

The CESB will provide eligible students with $1,250 a month for up to 4 months (May to August 2020). For eligible students with dependents or with disabilities, the monthly benefit is increased to $2,000. 

Eligibility

A student is eligible based on the following criteria:

  • They are a Canadian citizen, permanent resident, person registered as an Indian under the Indian Act, or a protected person under section 95(2) of the Immigration and Refugee Protection Act.
  • Either:
    • Enrolled, at any time between December 1, 2019 and August 31, 2020, in a post-secondary educational program that leads to a degree, diploma or certificate; or
    • Graduated from secondary school in 2020 and has applied for enrollment in a post-secondary educational program that is scheduled to begin before February 1, 2021.

Furthermore, eligible students must meet both of the following conditions:

  • Due to COVID-19, be unable to find work, seeking work and unable to find it, or working but being paid less than $1,000 during the 4-week period for which such individual applies for the CESB.
  • Not receive more than $1,000 of employment or self-employment income, EI benefits, allowances, or the CERB, during the 4-week period for which such individual applies for the CESB.
Interaction of the CESB with the CERB

If an eligible student claims the CERB, the CESB cannot be claimed for the same application period. Therefore, it appears in most cases where a student is eligible for both the CESB and the CERB, that such student claims the CERB as it provides a higher standard monthly benefit ($2,000 versus $1,250).

How to apply

Applications for this benefit are available through the CRA website. There are 4 application periods covering May 10, 2020 to August 29, 2020, with each application period spanning 4 weeks. Eligible students must reapply in each period.

The applications will be available until September 30, 2020. After this date, retroactive applications will no longer be accepted, even if a student was eligible.

Moreover, students that are able to work must attest that they are seeking work in order to obtain the CESB. To that end, the Government of Canada Job Bank provides students with job opportunities available and allows them to keep track of job search activities in one place.

RRIF minimum withdrawals

  • The government is reducing required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020, in recognition of volatile market conditions and their impact on many seniors’ retirement savings. This will provide flexibility to seniors who are concerned that they may be required to liquidate their RRIF assets to meet minimum withdrawal requirements.
  • For more information, visit the CRA website.

Additional financial support for seniors

In response to potential increased costs caused by COVID-19 for seniors, the government will provide a one-time tax-free payment of $300 for seniors eligible for Old Age Security (OAS). Seniors who are eligible for the Guaranteed Income Supplement (GIS) will receive an additional $200. This financial support is expected to cost the government $2.5 billion and help 6.7 million Canadians.

Additional financial support for persons with disabilities

In response to potential increased costs caused by COVID-19 for individuals with disabilities, the government will provide a one-tax tax-free payment of $600 for individuals who have a Disability Tax Credit certificate or are eligible for and apply for one by September 25, 2020, as well as beneficiaries as of July 1, 2020 of the Canada Pension Plan Disability, the Quebec Pension Plan Disability Pension, or disability supports provided by Veterans Affairs Canada. Payments will be automatically issued in the fall.