The Canada Emergency Response Benefit (CERB) is a tremendous financial relief for Canadian workers displaced by the COVID-19 outbreak. Since March 2020, the Canada Revenue Agency (CRA) has been dishing out $2,000 monthly for up to four months to individuals in dire need.
Statistics Canada reported a record-high 13.7% unemployment rate in May 2020. Because the pandemic is still raging and CERB recipients are exhausting their benefits in July, the federal government extended the program for another two months. If you reapply, you can get $4,000 more.
However, there are ways the CRA can reject your application for the CERB extension. It would be best to review the rules beforehand to ascertain your claim is not for naught.
Same eligibility period
The CRA is following eligibility periods, which is every four weeks. Ensure you do not apply for or receive CERB from the CRA or Employment Insurance (EI) benefits from Service Canada for the same eligibility period. The rule is you should re-apply in the next period. You must also file one application only, either with the CRA or Service Canada, not both.
With employment income
CERB is for the unemployed and those working reduced hours due to the pandemic. You can be working and still receive CERB provided your employment, or self-employment income (before deductions) does not exceed $1,000 monthly. Furthermore, you expect the situation to continue during the entire four weeks.
The CRA is stricter in scrutinizing CERB applications and conducting background checks. You should be truthful and not hide relevant information or provide wrong information. If you receive payments and the CRA finds out, they will claim back your CERB.
Canadians feel a sense of loss with CERB winding down in August. At the onset, it was clear the taxable benefit is for emergency use only. If you want limitless payments, look to invest if your finances will allow. A utility company like Emera (TSX:EMA) is a dependable income-provider. The business model is low risk, so you also have capital protection.
This $13.35 billion company serves end-users of electricity, gas, and other utility energy services in North America and the Caribbean. Over the last two years, the average total revenue and net income are $6.3 billion and $727 million. In 2020, the run-rate is $5.9 billion top line and $919 million.
Would-be investors shouldn’t worry about Emera’s financial stability since the demand for energy and accompanying services is constant, if not increasing. At present, the stock pays a 4.50% dividend. A $25,000 initial stake will deliver $1,125 in passive income. It could be your emergency money for the long haul.
Emera is displaying resiliency once more amid the 2020 pandemic. The stock price is nearly flat ($54.55) since the start of the year. It means COVID-19 didn’t impact at all on the business as well as on investor confidence.
Millions of Canadians don’t want CERB to go, but it was good while it lasted. The program was successful and served its purpose. However, it’s not the end of a lifeline. You can replace CERB with lasting, not temporary, income through dividend investing.
Speaking of three reasons why the CRA can reject applications for CERB extension...
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Fool contributor Christopher Liew has no position in any of the stocks mentioned.