Loopholes are starting to emerge in the manner by which the Canada Revenue Agency (CRA) is dispensing the Canada Emergency Response Benefit (CERB). Aside from ineligible claimants receiving the taxable benefit, others are getting double. Now, the CRA is recalling CERB payments or demanding its return.
Based on record dated June 3, 2020, 190,000 Canadians have had to repay their CERB. Many made honest mistakes by filing more than one application, while some realized they were not eligible. But those who are deliberately cheating the CRA are facing harsh penalties.
The CERB program did not have checks and balances at the start. There was a mad rush to claim the $500 weekly pandemic money as workers were losing jobs or working fewer hours. However, cases of fraud are rising such that the CRA had to open a snitch line.
Tips of alleged misuse of CERB benefit and other COVID-19 federal aid programs are pouring in. The CRA is working double time to retrieve the payments that went into the wrong recipients. Furthermore, with the program extension, the government is bound to lose more if the CRA doesn’t nip the problem in the bud.
Fines are coming
It’s a good thing that people were honest enough to return or repay inadvertent CERB payments. Unfortunately, up to 2% of the total of 8.4 million CERB recipients applied fraudulently. The information came from Employment, Workforce Development and Disability Inclusion Minister Carla Qualtrough.
The CRA is investigating all tips and is recommending stricter measures to discourage cheating and fraud activities. A new bill is pending at the House of Commons. The legislation calls for the imposition of stiff fines, including jail time, if necessary.
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Apply only if eligible
The CERB is much-needed support, but some people are abusing the program. You run the risk of returning the money if the CRA finds out you’re ineligible.
Speaking of CERB returns and repayments...
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry and BlackBerry.