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

Interior Health reported 33 new COVID-19 cases on March 5. (Black Press Files)
Interior Health reports 33 new COVID-19 cases on March 5

Over 300,000 vaccine doses have been administered provincewide.

Nelson's Diana Morita Cole is the keynote speaker of the KDocsFF film festival. Photo: Submitted
Nelson author Diana Morita Cole to speak at film festival

She will share a virtual stage with actor George Takei

Some of the folks behind Angel Flight East Kootenay: Todd Weselake is a director, partner and pilot while Brent Bidston is the president and lead pilot of the not-for-profit. Pictured here with their older plane, they hope to get an upgrade for thanks to RDEK funding. (Image courtesy of Angel Flight East Kootenay)
Angel Flight secures RDEK funding for next five years

$100,000 will go to the not-for-profit each year, with the funds to be used to acquire a larger plane

Provincial health officer Dr. Bonnie Henry updates B.C. on the COVID-19 situation. (B.C. government)
Dr. Bonnie Henry predicts a ‘post-pandemic world’ for B.C. this summer

‘Extending this second dose provides very high real-world protection to more people, sooner’

Malawian police guard AstraZeneca COVID-19 vaccines after the shipment arrived in Lilongwe, Malawi, Friday March 5, 2021. Canada is expecting its first shipments of AstraZeneca vaccine next week. (Associated Press/Thoko Chikondi)
B.C.’s daily COVID-19 cases climb to 634 Friday, four more deaths

Currently 255 people in hospital, 66 in intensive care

A crashed helicopter is seen near Mt. Gardner on Bowen Island on Friday March 5, 2021. Two people were taken to hospital in serious but stable condition after the crash. (Irene Paulus/contributed)
2 people in serious condition after helicopter goes down on Bowen Island

Unclear how many passengers aboard and unclear where the helicopter was going

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Surrey Pretrial in Newton. (Photo: Tom Zytaruk)
B.C. transgender inmate to get human rights hearing after being held in mostly male jail

B.C. Human Rights Tribunal member Amber Prince on March 3 dismissed the pretrial’s application to have Makayla Sandve’s complaint dismissed

Supporters rally outside court as Pastor James Coates of GraceLife Church is in court to appeal bail conditions, after he was arrested for holding day services in violation of COVID-19 rules, in Edmonton, Alta., on Thursday March 4, 2021. THE CANADIAN PRESS/Jason Franson
‘Law remains valid:’ Pastor accused of violating health orders to remain in jail

The Justice Centre for Constitutional Freedoms is representing the pastor

The Netflix logo on an iPhone. B.C. delayed imposing sales tax on digital services and sweetened carbonated beverages as part of its response to COVID-19. Those taxes take effect April 1, 2021. THE CANADIAN PRESS/AP, Matt Rourke
B.C. applies 7% sales tax on streaming, vaping, sweet drinks April 1

Measures from 2020 budget were delayed due to COVID-19

Chief Don Tom of the Tsartlip First Nation was outraged after Green MLA Adam Olsen revealed on social media that the community had been experiencing a COVID-19 outbreak – a fact the First Nation had chosen to keep private to avoid racist backlash as experienced by the Cowichan Tribes when an outbreak was declared there in January. (Black Press Media file photo)
B.C. First Nation ‘outraged’ after Green MLA reveals COVID-19 outbreak

Tsartlip First Nation chief shares concerns about racist backlash, MLA apologizes

A lawyer wears a face mask and gloves to curb the spread of COVID-19 while waiting to enter B.C. Supreme Court, in Vancouver, B.C., Friday, Aug. 28, 2020. British Columbia’s highest court has sided with the land owner in a dispute over public access to public land. THE CANADIAN PRESS/Darryl Dyck
B.C. high court finds in favour of large landowner in fight over access to pair of lakes

The Nicola Valley Fish and Game Club launched legal action after the cattle company blocked road and trail access

Most Read