April 24, 2020

Summary of Income Relief Programs offered by the Federal Government and the B.C. Provincial Government

This article provides a summary of already-established and newly announced programs by the federal and B.C. provincial governments that are available to workers who are experiencing negative impacts to their earnings as a result of the global COVID-19 pandemic.  Some of these programs described below require employers to apply in order for employees to be eligible for the benefit.

 

Click on the links below to go directly to the respective section of the article:

B.C. Emergency Benefit for Workers – For B.C. Workers Negatively Impacted by COVID-19

Canada Emergency Response Benefit (CERB) – For Workers Otherwise Ineligible for Employment Insurance

Employment Insurance Sickness Benefits – For Employees under Quarantine

Employment Insurance Regular Benefits – For Employees who were Laid Off

Employment Insurance Caregiver Benefits – For Employees who are Caring for Someone who is Critically Ill or Needing End-of-Life Care

Canada Emergency Wage Subsidy (CEWS) – For Employers to Subsidize up to 75% of their Employees’ Wages

Temporary Wage Subsidy – For Employers to Subsidize up to 10% of their Employees’ Wages

Supplemental Unemployment Benefit (SUB) Program – For Employers to Top-Up their Employee’s Employment Insurance

Employment Insurance Work-Sharing Program – For Employees Working Reduced Hours

 

 

British Columbia Provincial Programs

 

B.C. Emergency Benefit for Workers – For B.C. Workers Negatively Impacted by COVID-19

Who this Applies to: British Columbians whose ability to work has been negatively affected by the outbreak.  This includes workers who have been dismissed or laid-off, who are sick or quarantined, who are staying home to take care of a sick child or family member, and parents who are staying home because of closed childcare centres and schools.

Eligibility Criteria:

  • The individual must have been a resident of British Columbia on March 15, 2020
  • The individual must meet the eligibility requirements for the Canada Emergency Response Benefit (see below)
  • The individual must have been approved for the Canada Emergency Response Benefit, even if you haven’t received a federal benefit payment yet
  • The individual must be at least 15 years old on the date that they apply
  • The individual must have filed, or agree to file, a 2019 BC income tax return
  • The individual must not be receiving provincial income assistance or disability assistance
  • Individuals who receive a payment but is later determined that they were not eligible for it may be required to repay the benefit with penalties and interest

How to Apply:

Benefit Amount: Eligible individuals will receive a one-time, tax-free payment of $1,000 in May, 2020.  The benefit is in addition to any federal income relief program, such as Employment Insurance or the Canada Emergency Response Benefit.

 

Federal Programs

 

Canada Emergency Response Benefit (CERB) – For Workers Otherwise Ineligible for Employment Insurance

In order to protect Canadians and the economy from the impacts of the COVID-19 pandemic, the Government of Canada enacted on March 25, 2020, legislation to establish the Canada Emergency Response Benefit (CERB).  This benefit is a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.

Who this Applies to: The benefit covers Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.

The CERB applies to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance and workers who are temporarily laid-off and not receiving income because of disruptions to their work situation due to COVID-19.

Impact on Individuals who are Receiving or Have Applied for Employment Insurance:

  • Individuals who are already receiving EI regular or sickness benefits will continue to receive their benefits and should not apply for CERB. If their EI benefits end before October 3, 2020, they can apply for CERB once their EI benefits cease.
  • Individuals who have applied for EI and whose application has not yet been processed do not need to reapply for CERB.

Eligibility Criteria:

  • The individual is at least 15 years old and a resident in Canada;
  • The individual had a total income from any of the following sources of at least $5,000 in 2019 or the 12-month period before they applied:
    • Employment
    • Self-employment
    • Employment insurance benefits in respect of pregnancy or parental leave, or
    • Allowances, money or other benefits paid pursuant to a provincial plan because of pregnancy, adoption, or parental leave;
  • The individual has ceased working for at least 14 days for reasons related to COVID-19;
  • The individual did not receive, during the consecutive days in which they have ceased working:
    • Income from employment or self-employment
    • Employment Insurance benefits in respect to pregnancy or parental leave, or
    • Allowances, money or other benefits paid pursuant to a provincial plan because of pregnancy, adoption, or parental leave
  • The individual did not voluntarily quit their employment

How to Apply:

Benefit Amount: Eligible individuals will receive a benefit of $2,000 a month for up to four months until October 3, 2020 and backdated to March 15, 2020.

 

 

Employment Insurance Sickness Benefits – For Employees under Quarantine

Who this Applies to: Employees who are sick or placed in quarantine/self-isolation because they were asked by their employer or a medical professional to self-isolate based on recommendations by a public health official, or self-isolation/quarantine was imposed on them by a public health official.

Eligibility Criteria:

  • The individual is unable to work due to illness, injury or self-isolation/quarantine;
  • The individual’s regular weekly earnings from work have decreased by more than 40% for at least one week; and
  • The individual has accumulated at least 600 insured hours of work in the 52 weeks before starting their claim

How to Apply:

Telephone: 1-833-381-2725 (toll-free)

Teletypewriter: 1-800-529-3742

Benefit Amount: Eligible individuals will receive up to 15 weeks of financial assistance representing up to 55% of their earnings and up to a maximum of $573 a week.

 

Employment Insurance Regular Benefits – For Employees who were Laid Off

Who this Applies to: Individuals who were temporarily laid off or whose employment was terminated through no fault of their own.

Eligibility Criteria:

  • The individual was employed in insurable employment and lost their job through no fault of their own;
  • The individual has been without work and without pay for at least 7 consecutive days in the last 52 weeks;
  • The individual has worked the required number of insurable employment hours in the last 52 weeks or since their last insurance claim, whichever is shorter (this ranges from 420 hours to 700 hours, depending on the unemployment rate in the individual’s region);
  • The individual is ready, willing and capable of working each day; and
  • The individual is actively looking for work

How to Apply:

Benefit Amount: Eligible individuals will receive 55% of their average insurable weekly earnings, up to a maximum of $573 per week.  The benefit period ranges from 14 weeks to a maximum of 45 weeks depending on the number of insurable hours the individual has accumulated in the last 52 weeks or since their last employment insurance claim, whichever period is shorter.

 

Employment Insurance Caregiver Benefits – For Employees who are Caring for Someone who is Critically Ill or Needing End-of-Life Care

Who this Applies to: Individuals who take time away from work to provide care or support to a critically ill person or someone needing end-of-life care.

Eligibility Criteria:

  • The individual is a family member or considered to be like a family member of the person who is critically ill or needing end-of-life care;
  • The individual’s regular weekly earnings from work have decreased by more than 40% for at least one week because they need to take time away from work to provide care or support to the person;
  • The individual has accumulated 600 insured hours in the 52 weeks before the start of their claim or since the start of their last claim, whichever is shorter; and
  • A medical professional has certified that the person the individual is providing care to is critically ill or needing end-of-life care

How to Apply:

Benefit Amount: Up to 55% of the individual’s earnings, to a maximum of $573 a week for up to 15-35 weeks depending on the age of the person that the individual is providing care to and the type of care the person requires.

 

Canada Emergency Wage Subsidy (CEWS) – For Employers to Subsidize up to 75% of their Employees’ Wages

Who this Applies to: Employers who have seen a significant drop in their gross revenue and who wish to avoid laying off or dismissing their employees due to COVID-19.

Eligibility Criteria:

  • Eligible Employers
    • Eligible employers include individuals, taxable corporations, partnerships consisting of eligible employers, non-profit organizations and registered charities who have incurred at least a 15% drop of their gross revenue in March 2020 and a 30% drop in gross revenue for April and May 2020
      • To calculate eligibility, the gross revenue for March, April, and May 2020 can be compared to either:
        • The revenue earned in the same months of the previous year, or
        • The average revenue earned in January and February 2020
      • Public sector entities such as municipalities, local governments, Crown corporations, wholly owned municipal corporations, public universities, colleges, schools, and hospitals are excluded
    • Eligible Employees
      • Eligible employees are individuals who are employed in Canada
      • Eligible employees must have had continuous income from employment with no gap in income greater than 14 days during the eligibility periods which are defined as March 15-April 11, April 12-May 9, or May 10-June 6
    • Eligible Revenues
      • Eligible revenue is calculated using the employer’s normal accounting method and based on the employer’s business carried on in Canada earned from arm’s-length sources. There are special rules for non-arm’s length transactions.
      • Revenues from extraordinary items and amounts on account of capital are excluded
      • Charities and non-profit organizations can choose whether or not to include revenue from government sources in their calculations
    • Eligible Remuneration
      • The remuneration that will be eligible to be covered by the wage subsidy includes salary, wages, and other remuneration which the employer would generally be required to make deductions and withholdings on.
      • Severance pay, stock option benefits, and the personal use of a corporate vehicle are not included

How to Apply:

  • Employers will be able to apply through Canada Revenue Agency’s My Business Account portal or through an online application form
  • Applications will open April 27, 2020

Benefit Amount:

  • The subsidy amount for an employer will cover up to 75% of each employee’s first $58,700 of eligible remuneration, or in other words, up to $847 per week
  • The subsidy is available to eligible employers for up to 12 weeks until June 6, 2020 and retroactive to March 15, 2020
  • Employers must also make their best efforts to top-up employees’ salaries to bring them to their pre-crisis levels
  • Certain employer contributions to Employment Insurance, Canada Pension Plan, and Quebec Pension Plan are also eligible to be 100% refunded if they were paid to eligible employees who were on leave with pay during which time the employer was eligible to claim the CEWS
  • There is no overall limit on the total amount of wage subsidy that an eligible employer can receive
  • The Government of Canada has provided a calculator to help employers estimate the amount of wage subsidy they may receive. Employers will need to calculate their estimated subsidy before applying.  The calculator can be found here: https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-calculate-subsidy-amount.html

 

Temporary Wage Subsidy – For Employers to Subsidize up to 10% of their Employees’ Wages

Who this Applies to: Employers who are ineligible for the Canada Emergency Wage Subsidy may still be eligible for the Temporary Wage Subsidy.

Eligibility Criteria:

  • Eligible Employers
    • Eligible employers include individuals, certain partnerships, non-profit organizations, registered charities, and Canadian-controlled private corporations eligible for the small business deduction
    • Eligible employers must have an existing business number and payroll program account with CRA on March 18, 2020 and must pay remuneration to the eligible employee
  • Eligible Employee
    • Eligible employees are individuals who are employed in Canada

How to Apply:

  • There is no application form for the Temporary Wage Subsidy
  • To claim the Temporary Wage Subsidy, the employer must calculate the subsidy themselves. When remitting an employee’s income deductions to CRA, the employer is entitled to reduce its payroll remittance for federal, provincial, or territorial income tax by the amount of the subsidy
  • The Temporary Wage Subsidy is a three-month program for remuneration paid between March 18, 2020 and June 19, 2020

Benefit Amount:

  • Eligible employers will receive a subsidy equal to 10% of eligible employees’ remuneration, up to a maximum of $1,375 per employee
  • The maximum total amount of wage subsidy an employer may receive under the Temporary Wage Subsidy is $25,000

Supplemental Unemployment Benefit (SUB) Program – For Employers to Top-Up their Employee’s Employment Insurance

Who this Applies to: Employers who wish to assist in increasing their employees’ weekly earnings from Employment Insurance when they have experienced an interruption in their earnings due to temporary stoppage of work, training, illness, injury or quarantine. 

Eligibility Criteria:

  • Employers must submit an acceptable Supplemental Unemployment Benefit Plan that:
    • Identifies the group of employees covered and the duration of the plan
    • Covers a period of unemployment caused by 1 or more of the following:
      • Temporary stoppage of work
      • Training
      • Illness, injury, or quarantine
    • Requires the employees to apply for and be in receipt of EI benefits
    • Requires that the combined weekly payments from the plan and the portion of the EI weekly benefit rate does not exceed 95% of the employee’s normal weekly earnings
    • Requires it be entirely financed by the employer
    • Requires that on termination, all remaining assets of the plan will be reverted to the employer or be used for payments under the plan or for its administrative costs
    • Requires that written notice of any change to the plan be given to Service Canada within 30 days after the effective date of the change
    • Provides that the employees have no vested right to payments under the plan except during a period of unemployment specified in the plan
    • Provides that payments in respect of guaranteed annual remuneration, deferred remuneration or severance pay will not be reduced or increased by payments received under the plan

How to Apply:

Service Canada – Supplemental Unemployment Benefit (SUB) Program

120 Harbourview Boulevard

P.O. Box 11,000

Bathurst, New Brunswick

E2A 4T5

Benefit Amount: The SUB payment and EI benefit amount can represent as much as 95% of the employee’s weekly earnings.  Payments pursuant to SUB Plans that are registered with Service Canada are not considered earnings and therefore, are not deducted from EI benefits.

 

Employment Insurance Work-Sharing Program – For Employees Working Reduced Hours

The EI Work-Sharing Program is designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer.  The program provides EI benefits to eligible employees who have had their hours temporarily reduced.  Work-Sharing is a three-party agreement between the employer, employees, and Service Canada.  It should be noted that Work-Sharing agreements must be submitted a minimum of 30 days prior to the requested start date.

Who this Applies to: Employees who have had their hours reduced due to a temporary reduction in the normal level of business activity that is beyond the control of the employer.

Eligibility Criteria:

  • Eligible Employers
    • The employer has been in business in Canada year-round for a least 2 years
    • The employer is a private business, publicly-held company, or a not-for-profit organization
    • There has been a temporary shortage of work beyond the employer’s control, and is not a cyclical/recurring slowdown
    • There has been a recent decrease in business activity of approximately 10%; and
    • The employer must submit and implement a recovery plan designed to return the Work-Sharing unit(s) to normal working hours by the end of the Work-Sharing agreement. A template of the recovery plan can be found here: https://www.canada.ca/en/employment-social-development/services/work-sharing/application.html
  • Eligible Employees
    • Employees must be “core employees” (i.e.: year round permanent full-time or part-time employees who are required to carry out the everyday functions of normal business activity); and
    • Employees must be eligible to receive Employment Insurance benefits
  • Eligible Work-Sharing Unit
    • A Work-Sharing unit generally includes all employees in a single job description or all employees who perform similar work. Individual employees in the same job description cannot volunteer to participate in the Work-Sharing agreement while others decline and continue to work normal hours
    • Employees in a Work-Sharing unit must agree to a reduction of their normal working hours as well as agree to reduce their hours equally
    • The Work-Sharing unit should not include employees that are essential to the recovery of the business (for example, senior management, executive level marketing/sales agents, etc.)
    • There must be a minimum of two employees in a Work-Sharing unit; and
    • Each Work-Sharing unit must authorize an employee who will represent them in the agreement

How to Apply:

Benefit Amount: The benefits paid are based on employees’ loss of normal hours of work.  Work-Sharing benefits are also based on the regular weekly Employment Insurance benefit rate (currently 55% of weekly earnings and up to $573 a week).  Additionally, due to COVID-19, the Government of Canada has introduced temporary special measures that extend the maximum duration of Work-Sharing agreements from 38 weeks to 76 week for businesses affected by the downturn in business.

 

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