Where to find and apply for COVID-19 financial relief

The COVID-19 outbreak has dealt a shock to our economy, shuttering entire industries and leaving many more businesses in limbo, forcing layoffs and loss of income on many people. Fortunately, the Canadian government and several other institutions are offering financial relief for Canadians during the COVID-19 pandemic. If you have lost your job, have decreased income, need to stay home to take care of someone else, need to isolate or are sick yourself, the following emergency measures can help cushion the blow, including the latest news on the federal government’s plan for relief when the Canada Emergency Response Benefit (CERB) ends.

Canada Emergency Response Benefit (CERB)

This is a COVID-19 emergency aid measure set up by the federal government to help get financial relief to Canadians quickly and efficiently. It is a taxable benefit that pays $2,000 per month for up to four months (16 weeks), retroactive to March 15.

Who qualifies for CERB?

• Workers who have lost their jobs or cannot work because of the COVID-19 outbreak
• UPDATED: Workers whose income has fallen to $1,000 per month or less, including self-employed and gig-economy workers
• Workers who are sick, quarantined, or caring for someone else who is sick
• Working parents who can’t work because schools and daycares are closed
• Workers who still have jobs but, due to required workplace shutdowns and layoffs, are not working right now
• Independent contractors and self-employed workers who don’t usually qualify for Employment Insurance (EI)

How is CERB different from EI?

The CERB is specifically designed to fill in the gaps that surround the current EI system. It will be easier to apply for, benefits will arrive sooner and more people will qualify. If you are already receiving EI or sickness benefits, then do not apply for the CERB.

If you have already applied for EI and your application is still being processed, you do not have to reapply. If you are still unemployed after the four-month period, people who qualify for EI can still access the standard EI benefits. 

How to apply for CERB

Applications via automated phone service ad online are available as of April 6, and benefits will be paid out within 10 days of applying. Check here for more details and updates as they become available. 

What benefits are available when CERB ends?

UPDATE: Here’s what we know so far about the new benefit that will replace CERB. The last eligibility period for people to receive CERB ends on September 26. An estimated four million people will move to EI after that.

For self-employed people

If you are self-employed and/or don’t qualify for EI, you will be eligible for $400 per week. There are some qualifications to that amount: You’ll have to repay 50 cents on every dollar earned above $38,000, and this new benefit will be available for 26 weeks over a one-year period.

For people who must leave work to care for a family member

As of Sept. 27, 2020, Canadians who must leave work to take care of a family member can apply for EI Caregiving benefits and leave. Unlike with regular EI benefits, you can qualify with as little as 120 insured hours of work (as opposed to 600 hours). The benefit provides a minimum of $500 per week, which may later be subject to tax. And if you received CERB previously, you will have more than the standard 52 weeks in order to work the minimum insured work hours to qualify for this benefit.

Canada Emergency Wage Subsidy

This is a brand new federal subsidy that is designed to help small businesses retain employees on their payroll (or to rehire them) during this outbreak. The federal government will pay qualifying businesses 75% of the first $58,700 of an employee’s payroll salaries for up to three months, retroactive to March 15, 2020. All businesses and non-profits whose revenues have decreased by at least 30% because of COVID-19 should qualify. More details on eligibility and how to apply will be shared here in the days following the March 30 announcement.

Indigenous Community Support Fund

The federal government has also started a new Indigenous Community Support Fund that will provide assistance for the immediate needs of the First Nations, Inuit and Metis Nation communities. The funds will be administered by community leaders where they are most needed.

Employment Insurance (EI)

EI is a federal program available for Canadian workers who have been laid off, and have been paying into EI benefits, and have worked between 420 and 700 hours in the past year (depending on where you live). It pays 55% of your average weekly earnings, to a maximum of $573. Benefits will continue to be paid for a period of between 14 and 45 weeks, depending on how many insurable hours you have worked.

How to apply

You can apply online within four weeks of losing your job with the appropriate documents (which are listed online). There is typically a two-week waiting period before receiving your first payment. 

Note that, right now, it is better to apply for the federal government’s new CERB support. The applications should be processed faster, with fewer obstacles, and you will still be able to receive EI benefits later, if you should need them.

Provincial employment relief

Some provinces are offering a one-time payment of around $1,000 for people who have lost their jobs due to the COVID-19 outbreak.

British Columbia and New Brunswick will make a payment to anyone who has lost income, even if they qualify for federal support. 

Alberta and Saskatchewan offer payments for anyone who is unable to receive federal aid.

Quebec has a province-run temporary aid program for those who are affected by this outbreak and don’t otherwise qualify for federal or employer-provided unemployment assistance.

In addition to these employment measures, most provinces, territories, Indigenous communities and municipalities are increasing the availability and the amount of aid that is offered by programs that were already in place before COVID-19. Visit the websites of your municipal government and local organizations, to see if there might be other extras you can count on during this time. Here is a link to the economic support provided by the city of Toronto, for example, including information on property tax payment grace periods; this link offers information provided by the Northwest Territories, including a full list of subsidies and programs that are available during the COVID-19 crisis.

Extensions on income tax filing and payments

The federal government has extended the deadline for filing personal income tax to June 1, 2020. As well, the payments of any outstanding tax balance can be deferred until August 31, 2020, without incurring any interest charges or penalties. More details can be found here. Quebec is the only province that collects personal income taxes separately, and it has also extended the tax deadlines for this year.

Increased federal benefits

The federal government is automatically raising the amount of Canada child benefit (CBC) that is paid to every family by $300 per child per month. The payment increases will begin in May. The government will also make a one-time payment for families with modest incomes through the GST/HST credit. Individuals can expect close to $400, and couples can expect around $600 in mid-May.

Student loan extensions

As of March 30, the repayment of Canada Student Loans and Canada Apprentice Loans has been automatically suspended for six months, until September 30, 2020, and no interest will accrue. Quebec, Alberta, British Columbia, Saskatchewan, Nova Scotia, Prince Edward Island and Ontario are also providing similar payment freezes on their student loan programs.

Registered Retirement Income Funds (RRIFs)

The minimum withdrawal for RRIFs has been reduced by 25% for 2020, reducing the total amount of taxable income that retirees will have to claim and, thus, reducing how much tax they will owe.

Utility bill deferrals

Many provinces and municipalities are mandating that utility payments can be deferred for 90 days. Please check with your local service providers to see what options are available to you. BC Hydro is also offering grants of up to $600 for people who have lost income due to the COVID-19 outbreak. 

Mortgage and other debt repayment deferrals

Canada’s largest banks and many credit unions are offering mortgage deferrals of up to six months for people who are struggling to make ends meet during this crisis.

They are also offering payment deferrals on other debt, such as lines of credit and credit cards. It’s important to understand that this is not mortgage or debt forgiveness, and that you should assume interest will continue to accrue on the outstanding balance (talk to your lender about the specifics that apply to your mortgage, line of credit or loan). Since it will take you longer to pay off your mortgage and interest will continue to accumulate, it is possible that deferring payments now might end up costing you more in the long run—so only defer payments if you truly need to. You may also want to consider other measures, such as increasing your amortization so your repayments are smaller, and spread out over a longer period. 

So, should I defer my payments?

Maybe. If you are worried about having enough money to survive in the short term, then not having to meet a mortgage payment or two will certainly help. Melissa Leong, author of the finance guide Happy Go Money, says that if you do defer, it’s smart to find out how you can repay any extra money back into your mortgage. “Say you’re getting a mortgage deferral to put the money [you would have used for repayments] in an emergency fund. If you don’t end up spending the money on basic necessities, put it back into your mortgage. Look into what your payment options are, whether that be lump-sum payments or top-ups,” says Leong.

In general, if you are worried about making ends meet during this outbreak, look carefully at ways to decrease your expenses. Leong suggests doing a line-by-line examination of your financial statements and cutting out as much as you can. “Negotiate with your telecommunications company, your insurance company, to reduce your fees. Meal plan to stretch your grocery bill,” she says. If you have to borrow money to get by, be smart about it. Leong says, “Access cheap debt if you can— through a line of credit, for example. Use as little of it as possible, and create a plan to pay it back when things normalize.”

With files from Renee Sylvestre Williams.

MORE ON COVID-19:

• Managing your mortgage during COVID-19
• What should retirees do with their investments amid COVID-19
• Investing in time of COVID-19
• How to prepare for a recession