Almost everyone who lost their source of income (fully or partially) was eligible for the CERB. It’s inclusivity, and “fewer-questions-asked” policy made it one of the most sought after benefit payment in the history of Canada. Now, we have the CRB, which is a bit more discerning. The CRA has made the CRB qualifications a bit more restrictive than the CERB’s was.
And you have to ensure that you are eligible before you apply. Because if you are not eligible and you do apply, you might not receive the payment in time to help you with your necessary expenses. Understanding the eligibility criteria would help you figure out whether it’s the right benefit payment for you or should you apply for something else.
CRB eligibility
The eligibility criteria for the $2,000 a month CRB (but you will receive $1,800 after tax is deducted), is strict but not convoluted. The first stipulation is income-related. For the period in which you’re applying, you shouldn’t have any income from a full-time job or any self-employment income. You are also eligible if your income for the period you are applying for got reduced to 50% or less of your average weekly income.
If you are receiving any other benefit: The EI, CRCB, CRSB, QPIP, short-term disability, or worker’s compensation, you are not eligible. You also need to be present in the country for the period you are applying for. Other requirements include age (at least 15 years) and a valid SIN number.
You should also prove that you earned at least $5,000 in 2019, 2020, or in the 12 months preceding the benefit payment. If you quit a reasonable job voluntarily, you might not be eligible.
Self-made benefits
You may not worry about CRB eligibility if you have your own savings and investments to sustain you. And if your self-made benefits come from the TFSA, it’s better than the CRB anyway, since you won’t have to pay any taxes on it. If you had invested $5,000 in Clairvest Group (TSX: CVG) 10 years ago (at the beginning of 2010), you’d have about $25,000 in the company (with dividends re-invested).
This is equivalent to at least 12 months of CRB, which is far more than you’d get from the benefit payment, as you are only eligible to receive the payment for 26 weeks. Clairvest is a Toronto-based equity management firm with about $2.4 billion of equity capital under management.
It’s not a rapid growth stock, but it’s consistent. And if we consider its valuation, it’s still a bit undervalued, so you don’t have to wait for a market crash to add this company to your portfolio.
Foolish takeaway
Starting a nest egg at the right time would have given you more options. If you had enough reserves in your TFSA to lean on, you could choose not to receive benefit payments like the CRB. And if you don’t have any reserves, you should learn from the current situation and start investing as soon as you can. Set some money aside and invest so that you are ready for the next financial crisis.
