The CRA tried its best to make the transition from the CERB to the EI and the CRB as smooth as possible. The CRB is now available for the taking, and if you don’t qualify for the EI, you can apply for this benefit. If you are part of the gig economy and used to make a living doing small gigs and freelance jobs, you may fit neatly into the CRB’s eligibility criteria.
But what if you weren’t part of the gig economy, and you also don’t qualify for the EI? Would you still qualify for the CRB, or should you look into another benefit? A good look at the eligibility criteria might help you find the right answer. And if you are applying for the $2,000 a month CERB (of which you will get $1,800 after taxes), there are three steps you can take to make sure that you are accepted.
Step 1: Consider your current employment status
If you are not working and you used to, you can apply for the CRB. The benefit payment is given for periods of two weeks at a time, so if you didn’t earn any income in the two weeks you are applying for, you might get the payment. But even if you did work, and your income got reduced to half or lesser, you still qualify. It’s calculated based on your average weekly income in 2019 or the past 12 months.
For most people, applying based on the past 12 months would make more sense because that would include 2020 months when your income got affected the most. So your threshold for reduced income would be lower. But only if it doesn’t clash with step 2.
Step 2: Calculate your earned income
Another CRB requirement is that you earned $5,000 or more in the last 12 months or 2019. Make sure that you choose the right 12-month period. And the income can be from any source, that is, a job, gig, dividends, tips, or even royalties. Other benefit incomes don’t count, and you don’t qualify for the CRB if you are already receiving another benefit income.
Step 3: You were seeking work during the period
This might be difficult to trace for the government, especially when it comes to gig works, but it will find a way to track you. The good idea is to attend training or a seminar that you were referred to by the provincial government or another local body. You also can’t have a reasonable job offer that you turned down during the two-week period you are applying for.
Your own CRB
If you had invested just $1,000 in goeasy (TSX:GSY) ten years ago, you’d now have $10,000 in the company’s shares. If you liquidate that position (ideally in your TFSA), you can have $2,000 a month income for five months. And it’s tax free. Unlike the CRB, you won’t receive $1,800 for the $2,000 approved benefits because the CRA held 10% back for taxes.
Even if you invest $1,000 in the company now, and it can replicate its last decade’s growth rate, you may have $10,000 in the next decades. Rather than waiting for government benefits and poring over eligibility details, invest and build up your own emergency reserves.
Foolish takeaway
The CRB benefit fills a significant void that the CERB left and which the EI can’t fill. But the CRA is more cautious about the distribution of funds now and will ensure that it goes to the right people. So if you don’t qualify, don’t apply. There might be another benefit that you are eligible for.
