CRA CERB Alternatives: 2 Must-Know Emergency Payouts

Prior to CERB’s ending, the federal government was already preparing two emergency payouts for displaced workers. Some Canadians are investing in the Canadian Western Bank stock, which is a passive income machine.

| More on:
You Should Know This

Image source: Getty Images

The federal government knew that millions of Canadians would still be financially hard-up when the Canada Emergency Response Benefit (CERB) ends. While the Canada Revenue (CRA) and Service Canada were busy dispensing the taxable benefit, something was cooking.

Fortunately, anxiety levels among CERB recipients didn’t last long. The government began to transition as many as possible to a more flexible Employment Insurance (EI) system in late September 2020. However, not everyone is eligible, even if EI requirements are less stringent.

The Canada Recovery Benefit (CRB) had to be in place, too, so that no Canadians will be left behind. If you’re about to exhaust CERB, the EI and CRB are the two emergency payouts.

Reinvented EI        

The government tweaked the EI system by incorporating CERB features. Accumulating insurable hours is the obstacle that will prevent many CERB recipients from shifting to EI. Hence, you only need 120 insurable hours now to gain access to or qualify for the reinvented EI.

You’ll receive a minimum benefit rate of $500 weekly or $300 a week for extended parental benefits, minus applicable taxes. The payments could be from a minimum of 26 weeks up to a maximum of 45 weeks. The transition is automatic if you received CERB from Service Canada and eligible for EI. If you got CERB from the CRA, but EI-qualified, you need to apply for EI.

Rapid response after CERB

People who don’t have access to EI can apply for CRB with the CRA. However, the tax agency requires that applicants must be available and looking for work. They must accept work when it is reasonable to do so.

You can also apply for CRB if you’re working but have experienced an income drop of at least 50%. CRB pays $500 weekly for up to 26 weeks. Workers who quit their jobs voluntarily after September 27, 2020, can’t qualify for CRB unless there’s a valid reason for quitting.

Passive income machine

Canadians have other income opportunities in the health crisis besides the federal dole-outs. You don’t need substantial savings or seed money to receive a recurring income stream from the Canadian Western Bank (TSX:CWB). Similarly, you can grow your capital over time by reinvesting the dividends.

Despite the volatile operating environment in Canada’s western region, CWB Financial Group is performing better-than-expected. In Q3 2020 (quarter ended July 31, 2020), total revenue rose by 4% to $226.5 million compared with Q3 2020.

Loans grew by 5% to $29.7 billion, while its branch-raised deposits soared by 22% to $16 billion. Chris Fowler, CWB President and CEO, expects the last quarter figures to improve some more.

Investors can’t outright say that this $2.29 billion regional bank is an inferior income provider compared with the Big Six banks in the country. The Canadian Western Bank is a passive income machine with its 4.39% dividends. The payouts should be safe and sustainable, given the 39.31% payout ratio.

Anxiety is over

The anxieties of Canada’s worker populations, mostly in the economic sectors hardest hit by the pandemic, are over. A CERB recipient could either transition to EI or receive CRB next, so apply now.

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 Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

a person prepares to fight by taping their knuckles
Dividend Stocks

TFSA Investors: 2 High-Yield Heavyweights Worth a Sizeable Investment

SmartCentres REIT (TSX:SRU.UN) and another high-yield heavyweight to buy now while rates and fears remain high.

Read more »

Growing plant shoots on coins
Dividend Stocks

Buy These 3 High-Yield Stocks With Healthy Payout Ratios

The payout ratio is a good way to understand a dividend-paying company’s financial stability, and it’s a good way to…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Your Guide to the Best Monthly Dividend Stocks in Canada

Three of the best monthly dividend stocks in Canada have market-beating returns despite the elevated volatility in 2023.

Read more »

data analyze research
Dividend Stocks

Passive Income: How to Earn $1,191/ Per Year Tax Free

Make $1,191/year in tax-free passive income with these top TSX dividend stocks.

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

3 Under-$30 Stocks That Pay Over a 5% Dividend Yield

These three dividend stocks below $30 could boost your passive income.

Read more »

grow money, wealth build
Dividend Stocks

2 Small-Cap Growth Stocks Worth Adding to Your Arsenal

While large-cap, blue-chip stocks make for the safest investments, there are plenty of small-cap growth stocks that offer safe and…

Read more »

A worker gives a business presentation.
Dividend Stocks

3 Blue-Chip Stocks to Hold Tight in a Fluctuating Market

These three Canadian blue-chip stocks can be good investments to hold in a volatile market to protect your self-directed investment…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

$25,000 in This Dividend Stock Pays You $1,920 a Year

Enbridge stock offers you a dividend yield of 7.7%, making it a top choice for income-seeking investors in 2023.

Read more »