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

FILE – A COVID-19 vaccine being prepared. (Olivia Sullivan/Sound Publishing)
B.C. seniors 80 years and older to get COVID vaccine details over next 2 weeks: Henry

Province is expanding vaccine workforce as officials ramp up age-based rollout

(Black Press file photo)
Charges laid against two suspects in pre-Christmas home invasion

An 88-year-old woman was hospitalized after being bear-sprayed in the face Dec. 18, 2020

Chris Paulson of Burns Lake took a quick selfie with a lynx over the weekend of Feb. 20-22, 2021, after the wild cat was found eating some of his chickens. (Chris Paulson/Facebook)
VIDEO: Burns Lake man grabs lynx by scruff after chickens attacked

‘Let’s see the damage you did, buddy,’ Chris Paulson says to the wild cat

Junction of Highways 16 and 37 Sunday morning. (Drive BC traffic cam image)
Drive BC reports hazardous road conditions throughout northwest

Advisories include road closure of Hwy 37 for high avalanche risk near Bob Quinn

Northern Health has declared a COVID-19 outbreak at Brucejack mine, 65 km north of Stewart on Feb. 11, 2021. (Pretivm Photo)
Northern Health has declared a COVID-19 outbreak at Brucejack Mine, 65 kilometres north of Stewart on Feb. 11, 2021. (Pretivm Photo)
Northern Health reports 20 more COVID-19 cases in outbreak at Brucejack Mine

So far, 42 people have tested positive, nine cases are active and self-isolating onsite

Dr. Bonnie Henry leaves the podium after a news conference at the legislature in Victoria on Friday, January 22, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. reports 559 new cases of COVID-19, one death

4,677 cases of the virus remain active in the province; 238 people are in hospital

Vancouver Canucks left wing Antoine Roussel (26) tries to get a shot past Edmonton Oilers goaltender Mike Smith (41) during second period NHL action in Vancouver, Tuesday, Feb. 23, 2021. THE CANADIAN PRESS/Jonathan Hayward
Canucks cough up 3-0 lead, fall 4-3 to visiting Edmonton Oilers

Vancouver falls to 8-13-2 on the NHL season

Jessica McCallum-Miller receives her signed oath of office from city chief administrative officer Heather Avison on Nov. 5, 2018 after being elected to Terrace City Council. McCallum-Miller resigned on Feb. 22, 2021, saying she felt unsupported and unheard by council. (Black Press Media File Photo)
Terrace’s 1st Indigenous councillor resigns citing ‘systemic and internalized racism,’ sexism

McCallum-Miller said in a Facebook post she felt unheard and unsupported by council

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

Temporary changes to allow for wholesale pricing for the hospitality industry were implemented June 2020 and set to expire March 31.	(Pixabay photo)
Pubs, restaurants to pay wholesale prices on liquor permanently in COVID-recovery

Pre-pandemic, restaurateurs and tourism operators paid full retail price on most liquor purchases

Wade Dyck with Luna, a dog who went missing near the Chasm for 17 days following a rollover on Feb. 5. (Photo submitted).
Dog missing for 17 days through cold snap reunited with owner in northern B.C.

Family ecstatic to have the Pyrenees-Shepherd cross back home.

Quesnel RCMP confirmed they are investigating a residential break-in at a home on the Barkerville Highway. (File image)
Thieves make off with $300K in Cariboo miner’s retirement gold

Tim Klemen is offering a reward for the return of his gold

Ghislaine Maxwell was arrested in New Hampshire. Image: The Canadian Press
Epstein associate Ghislaine Maxwell makes third attempt at bail on sex charges

Maxwell claims she will renounce her U.K. and French citizenships if freed

Most Read