When it comes to contracts, people are advised to read the fine print to find all stipulations buried deep in the body of the contract. This is expected to help them make an informed decision. Still, few people do. And it’s probably one of the reasons why quite a few people mistakenly applied for the CERB, even when they didn’t qualify.
While the CERB isn’t exactly a contract between a recipient and the CRA, it’s understood that someone who is applying for the CERB should fulfill the benefits program’s requirements. If you didn’t qualify and you still got the payment somehow, you need to pay it back to the CRA. If you don’t, the CRA will come collecting, and the repayment order might also come with a penalty.
Minimum earning requirement
One of the requirements for the CERB was that you should have earned at least $5,000 in the last 12 months. This stipulation was in place to ensure that only those people, who’ve been part of the workforce, get the CERB payment. The earning could be from a regular income, freelancing, gig-work, or a small business.
Let’s say your boss laid you off during the pandemic, but then they applied for the CEWS and rehired you. If you applied for the CERB before you were rehired, you were right to do so. But if your rehiring period overlapped with the period you applied for the CERB payment, you may need to send part of all of the $2,000 CERB back.
Your personal CERB
The CERB requirements and eligibility criteria were very lenient, but it still barred a considerable number of people from becoming qualified recipients. If you were one of them, you should have looked towards your own savings instead of applying for the CERB under false pretenses. Because if you got the CERB when you didn’t qualify, the CRA would come for it sooner or later.
One way to grow your savings to sizeable amounts, so they are able to sustain you if you lose your primary income (like millions of people did during the pandemic), is to invest it. Waste Connections (TSX:WCN)(NYSE:WCN) is an overpriced growth stock that can help you grow your savings to a considerable sum. One of the reasons it’s overvalued is the consistency of its growth in the last five years.
It returned over 180% to its investors in the last five years. It’s also a Dividend Aristocrat and has been for the last decade, but the yield is meagre at 0.8%. It’s a Texas-based company, and in Canada, it’s headquartered in Ontario. It deals with the collection, disposal, and recycling of solid waste, and it’s a business that’s almost as secure and as evergreen as utilities.
The CERB was created to help people, but it wasn’t a free government giveaway. Apart from its requirements, the payment also comes with its own tax obligation. That’s another thing you can get around if you rely on your TFSA funds instead of going for the benefit payment, especially if your eligibility is uncertain.
Speaking of the CRA taking back CERB...
Motley Fool Canada's market-beating team has just released a new FREE report that gives our three recommendations for the Next Gen Revolution.
Click on the link below for our stock recommendations that we believe could battle Netflix for entertainment dominance.
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 Adam Othman has no position in any of the stocks mentioned.