D’Arcy McDonald, Senior Vice President of Deposits, Investments & Payments at Scotiabank, is pictured in a handout photo. McDonald advises people who’ve been asked to repay CERB to take their time and explore their options moving forward. THE CANADIAN PRESS/HO-Scotiabank, *MANDATORY CREDIT*

D’Arcy McDonald, Senior Vice President of Deposits, Investments & Payments at Scotiabank, is pictured in a handout photo. McDonald advises people who’ve been asked to repay CERB to take their time and explore their options moving forward. THE CANADIAN PRESS/HO-Scotiabank, *MANDATORY CREDIT*

Think you may need to repay CERB? Best to start planning now, experts say

Experts hope there will be leniency on a case-by-case basis

When 20-year-old Alex Coucopoulos got a letter from the government in December telling him he’d have to pay back $12,000 of pandemic aid, the stress was immediate.

“It was a really bad situation,” said Coucopoulos, who lives at home and immediately took $5,000 out of his savings to re-pay the Canada Emergency Response Benefit

“It was very stressful. Pretty much my entire income from my (new job) would have gone to paying the rest back.”

The Ottawa resident said he applied last year after discussing his eligibility with a Canada Revenue Agency representative on the phone, who told him that he was eligible for CERB because his gross income in 2020 was over $5,000.

But he was one of many Canadians who were caught out when the government agency said applicants were actually required to have a net income over $5,000.

Coucopoulos was relieved when the Canadian government changed course last week and said people who applied thinking they were eligible because of their gross income would no longer have to repay CERB.

He said he can now continue with saving his income to pay the rest of his university costs, rather than setting aside all of his income to repay the benefit.

The Ottawa student’s situation is exactly why D’Arcy McDonald, Senior Vice President of Deposits, Investments & Payments at Scotiabank, advises people who’ve been asked to repay CERB to take their time and explore their options moving forward.

“Watch the government communications closely, because I think those sands are still shifting,” said McDonald, saying that the government still could change course on who is required to repay CERB.

“But if you did receive that uncomfortable letter, you probably need to think about immediately filing your taxes… to figure out what your obligations are to the government.”

McDonald said filing taxes now will help clear up whether you owe the government money, if you accidentally received both employment insurance and CERB, and if you can make a retirement savings plan contribution before the tax deadline to lower your amount owing for regular income taxes.

If you still end up owing the Canada Revenue Agency money for emergency benefits you weren’t eligible for, McDonald said people who earned less that $75,000 will be given an extra year of interest-free forgiveness until 2022

“If people are in that boat, that’s obviously a signal to create a payment plan, or to dig into whatever emergency savings you might have available to you, presuming you’re back on your feet and have those resources available,” said McDonald.

“It’s flexibility, and that’s what people hope to see from the government.”

For people who are still without work and aren’t in a financial position to repay benefits, McDonald said he hopes the government will provide some leniency to the debts on a case-by-case basis.

He pointed out that repaying CERB will be different from paying back private debt for things like mortgages or credit cards, and added that even some financial institutions provided deferrals on payments for those debts at the start of the pandemic.

“A private debtor would ratchet up pressure to get you to repay. I don’t think the government is in the same boat,” said McDonald.

“I don’t think they’d want to put those people at further risk by making you repay too quickly when you and your family are not out of the woods.”

READ MORE: Some Canadians facing CERB clawbacks may not have to pay it back: Trudeau

READ MORE: A rural-urban divide: Data gives most detailed look yet at where CERB went

Salmaan Farooqui, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Supporters gather during a rally against measures taken by government and health authorities to curb the spread of COVID-19 at the Whistle Stop cafe in Mirror Alta, on Saturday May 8, 2021. The Whistle Stop was shut down by AHS for not complying with COVID-19 rules. THE CANADIAN PRESS/Jason Franson
Police hand out tickets to dozens leaving anti-lockdown protest in Alberta

Hundreds gathered outside the Whistle Stop Café in the hamlet of Mirror, Alta.

People line up outside an immunization clinic to get their Oxford-AstraZeneca COVID-19 vaccine in Edmonton, Tuesday, April 20, 2021. Alberta leads the Prairie provinces in being the first to take COVID-19 vaccine bookings for pre-teens. THE CANADIAN PRESS/Jason Franson
Alberta leads Prairie provinces in accepting COVID vaccine bookings for pre-teens

The province begins accepting appointments for kids as young as 12 starting today

FILE - In this March 3, 2021, file photo, a vial of the Johnson & Johnson COVID-19 vaccine is displayed at South Shore University Hospital in Bay Shore, N.Y. (AP Photo/Mark Lennihan, File)
Johnson & Johnson COVID vaccine can be given to adults 30+ who can’t wait for mRNA: NACI

Panel says single shot vaccine can be especially useful for populations unable to return for second shot

Alberta’s environment department has known for years that toxins from old coal mines are contaminating populations of the province’s official animal, the bighorn sheep. THE CANADIAN PRESS/Craig Bihrl
Alberta government knew bighorn sheep contaminated with coal mine selenium, scientist says

Jeff Kneteman says Alberta Environment has known about the problem in bighorn sheep for years

Prime Minister Justin Trudeau receives his COVID-19 AstraZeneca vaccination in Ottawa, Friday, April 23, 2021. THE CANADIAN PRESS/Adrian Wyld
75% of Canadians need 1st vaccine dose to have more normal summer: Trudeau

The country is on track to hit a major milestone on the road to COVID-19 herd immunity Tuesday, with 40% vaccinated with a 1st dose

A vial of the AstraZeneca COVID-19 vaccine.THE CANADIAN PRESS/Carlos Osorio
Alberta to stop giving first doses of AstraZeneca COVID-19 shot as supply dwindles

There aren’t any confirmed shipments of AstraZeneca coming, and the province only has 8,400 doses of it left

Winnipeg Jets’ Andrew Copp (9) and Edmonton Oilers goaltender Mike Smith (41) watch an incoming shot during second period NHL action in Winnipeg, Monday, April 26, 2021. THE CANADIAN PRESS/Fred Greenslade
‘Very jealous’: Canadian teams can’t take advantage of NHL’s relaxed COVID-19 rules

League eased some tight COVID-19 health and safety protocols over the weekend for fully vaccinated clubs

File photo
Arrest made for armed robbery in Millet, Wetaskiwin RCMP continue to investigate

Wetaskiwin RCMP are investigating an armed robbery took place May 4, 2021 in Millet, Alta.

Dr. Karina Pillay, former mayor of Slave Lake, Alta., is shown at her medical clinic in Calgary on Friday, April 16, 2021. THE CANADIAN PRESS/Jeff McIntosh
10 years later: Former Slave Lake mayor remembers wildfire that burned through town

Alberta announced in 2011 that an unknown arsonist had recklessly or deliberately ignited the forest fire

The body of Brenda Ware, 35, was found along Highway 93 in Kootenay National Park on Thursday, May 6, 2021. (RCMP handout)
RCMP ask for tips after woman travelling from Alberta found dead in B.C. park

Brenda Ware was found along Highway 93 in the park, 54 kilometres north of the town of Radium

Most Read