When the first rumblings of the Canada Emergency Response Benefit (“CERB”) were heard, there were concerns for directors of small businesses that have been forced to close their doors due to the Covid 19 coronavirus lockdown. It was clear that employees being laid off or even worse, losing their jobs, would be eligible. However, directors of small businesses are more susceptible to taking intermittent draws from available funds for their income, and therefore it seemed that they may miss out by not having regular employment income.
However, without giving you tax or legal advice, a reading of the terms now issued seems to permit self-employed persons to apply for CERB and receive up to $500 per week for up to 16 weeks. CERB will be paid in 4-weekly instalments, requiring subsequent claims to be made. Therefore, directors who have shut down businesses may apply for CERB. There are some requirements, a few of which are listed below:
- Canadian resident
- Earned more than $5,000 in last 12 months
- More than 15 years old
- Stopped working due to Covid 19 coronavirus
- No income (employed or self-employed) for 14 consecutive days
- For subsequent claims, will not receive income for 4 weeks at a time.
- Do not quit job voluntarily
- Do not receive EI benefits for same period.
It is not addressed in the provisions that I could find and therefore one should assume that CERB will be taxable income when you complete your tax filings in due course. If you wish to apply, rather than calling the CRA by telephone and being on hold for several months, it is best for you to use a CRA My Account, or to set one up if you don’t yet have one.
The link to a CERB application is attached below https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html?employee=I%20was%20self-employed