CRA sends out notices asking some who received CERB to verify their eligibility

The Canada Revenue Agency is sending out letters to CERB recipients who may not have actually been eligible for the benefit. Shauna Hunt explains what you should do if you receive one of these letters.

By Shauna Hunt and Meredith Bond

If you collected the Canada Emergency Response Benefit (CERB) throughout the COVID-19 pandemic, you might soon be asked to prove your eligibility.

The Canada Revenue Agency (CRA) has sent thousands of letters to those that it believes may not have qualified for the benefit.

“Information we have on file shows you may have earned over $1,000 during periods you received the CERB,” reads the letter, asking for certain documents to verify whether the person did or did not earn over $1,000, including bank statements, pay stubs and an employee letter.

The CRA confirmed with CityNews they have started to issue the letters.

“The letter simply means to convey that the CRA needs more information in order to verify the claims,” read a statement from the CRA.

The agency says those who received the letter have not yet been deemed ineligible for CERB.

“We can confirm that to date, the CRA has not required any individuals to repay the CERB, and no repayment deadline has been established.”

Managing Director of Tax and State Planning with CIBC Jamie Golombek tells CityNews this is part of the government’s crackdown on wrongful payments.

“The government always said that they would pay out the money now to in desperation when people really need the money. It was an emergency benefit right back in March of 2020,” said Golombek.

“And therefore, I think the CRA is now saying, ‘Look, if you innocently took the money, you can pay it back. We won’t charge you.’ But that being said, this is an opportunity to try to get back because they are there is evidence that there are billions of dollars of a potential overpayment, and that’s what the government really wants to crack down on and try to get some of that money.”

Near the end of 2020, more than 400,000 letters went out asking people to verify their eligibility after the federal government was quick to roll out the aid program at the beginning of the pandemic due to millions of lost jobs.

Overall, CERB paid out $81.6 billion to 8.9 million people. Ottawa did warn that it would eventually crack down on those who abused the system.

When asked if he thinks people should be concerned if they have received one of these letters, Golombek said it depends on your situation.

“If you’ve met the rules, you’ve qualified, you have absolutely nothing to worry about. You send any information they’re asking for, then you have absolutely nothing to work, it will sort itself out,” said Golombeck.

“On the other hand, if you took a chance, claimed the benefit, and maybe didn’t really qualify … then you should worry. And you should think about trying to repay back those sort of benefits when you have time when you have the ability to do so.”

Golombek said the critical thing is to respond to the letter.

“If you don’t respond, you may actually get an assessment from CRA asking you to repay the money, and that’s pretty serious, but you really need to respond to the letter.”

Tax lawyer Charles Howarth agrees.

“I think it’s just as dangerous not to respond to it,” said Howarth. “This could be the start of a legal dispute with CRA, they are requesting you provide information, and there are reasons for that. They’re going to review that and then look at whether they can reassess you.”

Howarth recommends being very cautious when responding to the CRA and making sure you are sending accurate information.

“They do make a note of everything you say in writing, everything you say on the telephone, and I’d be concerned that they’ll be using anything that you say to potentially levy quite significant penalties against you. If they decide that you knew you weren’t eligible, but you took the money anyway, so those people should be considering seeking professional help in responding to these letters,” explained Howarth.

The government agency has said if it’s decided that money is owed, it is committed to being compassionate, flexible, and supportive during this challenging time.

“The CRA is not going to punish people who made an honest mistake. That being said, if people did fool the system, that’s where the CRA gets more suspicious, and you may have a harder time.”

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