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CERB – Overpayments

December 14, 2020 Uncategorized

As we discussed in our last blog article, Canadians are starting to be audited for receiving Canada Emergency Response Benefits (CERB) they did not qualify for.  Sadly, most of these folks are in the lowest socioeconomic quadrant.  Bear in mind that the median Canadian income is only around $36,000 – meaning that half of all Canadian tax filers earn less than that.

The majority of CERB applications appear to have come from people in lower income brackets.  We have heard from some of our ODSP clients that ODSP workers had, inadvertently, suggested they make application for the CERB.  It seems that the roll out of these benefits created a great deal of confusion – even colleagues in the accounting industry have had challenges understanding the qualifying criteria.

The CRA has apparently, according to this CBC news item, clarified that  the income criteria is $5,000 per annum net and not $5,000 gross.  Although an accountant quoted in the story suggested making a T1 adjustment to defer tax write-downs to increase net income in order to avoid one problem that may not be the answer for most recipients.

As at this writing, we are unaware of any restrictions on using a bankruptcy or proposal filing to deal with the debts, so it seems that for many people filing an insolvency proceeding will provide them with the most viable remedy.  Call today for more information 519-646-2222