If you’re a former CERB recipient, there’s a good chance you’ve heard about the Canada Recovery Benefit (CRB). It’s one of three benefits the CRA rolled out to replace the CERB. Paying $500 a week for up to 26 weeks, it provides substantial income support.
In many ways, the CRB is basically identical to the CERB. But there’s one key difference: not everybody can apply for the CRB.
While the CERB was available to all out-of-work Canadians, the CRB is only for those who aren’t eligible for EI. Anybody who can qualify for EI in 2020 is supposed to apply for that first. In this article, I’ll be exploring exactly who the CRB was meant for and how to apply for it.
Two main groups
“Not eligible for EI” describes basically two groups of people:
- Self-employed/gig workers. In other words, freelancers and people who work for companies like Uber.
- Small-business owners. That includes people who own hair salons, bars, restaurants, etc.
Technically, you could be conventionally employed and not be eligible for EI due to having used up your benefits. But Service Canada is letting people in that group get EI this year. So, for purposes of the CRB, “not EI-eligible” mainly means not having paid in. Self-employed people are opted out of EI by default, making them ineligible.
Not eligible? Consider these alternatives
If you aren’t eligible for the CRB, there are three alternatives you could apply for. These are
- Employment Insurance (EI): The main financial support for unemployed Canadians. This year, it pays $500 a week at minimum.
- The Canada Recovery Caregiving Benefit (CRCB): A $500 weekly benefit for people caring for COVID-impacted dependents.
- The Canada Recovery Sickness Benefit (CRSB): A $500 weekly benefit for those directly impacted by COVID-19.
Each of these benefits pays at least $500 a week. EI can potentially pay more. So, if you aren’t eligible for the CRB, you may still be able to get support.
The CRB is a much-needed lifeline for Canadians impacted by COVID-19. It may also prove to be a vital lifeline for the economy. Unemployment is still historically high; in situations like this, financial aid is needed to keep businesses afloat.
Consider a company like Canadian Tire (TSX:CTC.A). It’s a diversified retailer that sells a lot of discretionary items like clothing and outdoor gear. When people are out of work, they usually cut items like this out of their budget. With less money, they choose to focus on staples like food, instead of “optional” purchases that can be deferred.
Financial aid for consumers can indirectly help companies like Canadian Tire. By partially replacing peoples’ incomes, it helps them keep making sales. That’s no small matter. Not only is it good for these companies’ shareholders, it also helps them keep people employed. So, COVID-19 benefits may help not only those directly impacted by unemployment, but also the economy as a whole.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends Uber Technologies.