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By Carrie Hunter
Special to the Financial Independence Hub
With the Canadian Centre for Policy Alternatives warning of unemployment rates that could hit 13.5 per cent this year, the highest level we’ve seen in our country since the Second World War, there appears to be few industries and individuals who will escape the economic impact of COVID-19 unscathed.
As of the writing of this blog (April 2, 2020), one million Canadians have already applied for Employment Insurance benefits; with the federal government estimating close to four million joining the queue for the Canadian Emergency Response Benefit.
Meanwhile, the John Hopkins Coronavirus Resource Centre has recorded a staggering one million confirmed global cases of COVID-19, with over 235,000 of those situated in the U.S.
The situation south of the border is dire: especially when you consider that the near quarter million number we’re looking at today is likely to skyrocket over coming days, weeks and months tracing the trajectory of the heart-wrenching Italian and Spanish COVID-19 pandemic curves.
On April 1st, in what one wishes were a cruel April Fool’s Day prank, the U.S. Labor Department reported the loss of 10 million jobs in the last two-week period, with 6.6. million Americans filing for unemployment benefits last week alone.
Why does all this matter to Canucks? As the adage goes, when the U.S. sneezes, Canada catches a cold. Our economies, and those of other global entities, are inextricably intertwined.
Your Emergency Income options
Venturing back north to Canada, what follows are some of the options you have to ease your current financial burden. The tried n’ true path, if you qualify, is to apply for Employment Insurance or Sickness benefits. If, however, you don’t meet the criteria for either of these benefits, all’s not lost. You may still be eligible for the Canadian Emergency Response Benefit (CERB). Eligibility standards for this benefit, lasting 16 weeks and paying out $2000/ month, are arguably much less stringent.
Can I apply for CERB?
You can apply for CERB if you had an income of $5,000 (this can be self-employment, employment or parental benefit earnings) in 2019 or the 12 months prior to the CERB application; and, you expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period identified in your application.You’re also potentially eligible for CERB if you:
- live in Canada and are at least 15 years of age
- were laid-off from your job, or your hours have been drastically reduced to zero and you lack any other form of employment income
- were let go from your job because of COVID-19 and are eligible for regular Employment Insurance or sickness benefits (consult the FAQS at the bottom of the CERB page to get a better handle on when and how to apply for which benefit)
- still have a job, but have been temporarily laid off
- are sick, quarantined or are the primary caregiver for someone with COVID-19
- are a working parent who now must stay home, without pay, to care for your child/children whose school/ daycare is now closed
- are self-employed or a contractor and wouldn’t otherwise qualify for EI
Tricks, Tips & other considerations
How much will I receive?
Preet Banerjee, keynote speaker and founder of MoneyGaps, has launched the COVID Calculator to help estimate how much income support (via the Canada Child Benefit (CCB), GST and CERB) you can expect during the pandemic.
It’s worth noting CERB will not be taxed at source. That means it’s up to you to squirrel away anticipated tax money that will come due in 2021. To get a sense of how much you might want to sock away, experiment with different income tax scenarios within the Turbo Tax calculator or Simple Tax calculator.
If you’re ambitious, you can model a myriad of tax scenarios in the 2020 and 2019 Canadian Income Tax Calculator. As I mentioned earlier, you can begin applying for CERB on April 6th. However, the government has wisely (although I would still bet heavily on an overburdened IT network suffering instability with unprecedented pent-up Canadian demans) …. staggered the application process. Patience will, undoubtedly, be a virtue.
If you were born in:
- January, February or March, apply April 6th
- April, May or June, apply April 7th
- July, August or September, apply April 8th
- October, November or December, apply April 9th
And if you fancy a weekend date with the application process, anyone can apply on Friday, Saturday or Sunday.
I know, for many of us myself included, many days this all seems too much to bear, but this morning I was reminded by this Scottish Grandma, this too will pass.
Carrie Hunter is the founder and writer of the personal finance blog, PoundWiseandPennyPrudent.com. A passionate advocate for financial literacy, Carrie writes, speaks and facilitates workshops with a singular goal: to simplify the language of money. A self-taught money expert, Carrie is completing her designation as an Accredited Financial Canada Counsellor®. This blog originally ran on April 2, 2020 and is republished on the Hub with her permission.
