2020 was a challenging year for a number of reasons, most of which stemmed from the pandemic—even the people who never contracted the virus suffered from its social and financial side effects. Millions of people lost their jobs or had to close up businesses. Even people who had a flexible work situation and were used to remote working (freelancers and gig-workers) had a difficult time finding paid work.
These are the times when people expect the government and the relevant departments to step in. The CRA responded to the financial crisis created by the pandemic by introducing the CERB. It was the first and most comprehensive emergency payment, and it helped millions of individuals across the country. Now that things are slowly reverting to normal, the CRA discontinued the CERB and introduced other payments to replace it.
One of them is the CRB emergency benefit that pays you $500 per week.
Emergency benefit eligibility
The Canada Recovery Benefit (CRB) was not introduced to fully replace the CERB. That responsibility fell on the EI. But the EI is not comprehensive enough to pick up where the CERB left off, so the CRB (and a few other payments) were introduced for people who didn’t qualify for the CRB. It was geared more toward gig workers and freelancers, but it’s apparently covering a far broader spectrum of applicants.
There are a few eligibility requirements for the CRB.
- You couldn’t find work or were unemployed because of COVID during the period you are applying for.
- You are not receiving any other benefit payment (EI, CRSB, CRCB, QPIP, or short-term disability benefit).
- You don’t qualify for the EI. (If you do, you may have to try for that and can’t instead opt for CRB).
- You reside in Canada, are 15 years old or older, have a valid SIN number, and you didn’t quit your job voluntarily.
- You earned at least $5,000 in 2019, 2020 or 12 months preceding the period you are applying for.
The last eligibility criterion is the one that many applicants might have trouble with because many CERB recipients were deemed ineligible and were asked to return their benefit payments because they didn’t fulfill the $5,000 income requirement.
A safer income stream
If you had invested in the right stocks at the right time, you’d have a relatively safer income stream at your disposal. Take Franco-Nevada (TSX: FNV)(NYSE: FNV) as an example. If you had invested $10,000 in the company 10 years ago and placed it in your Tax-Free Savings Account (TFSA), you’d now be sitting at a $55,000 nest egg (with dividends reinvested).
It’s a Dividend Aristocrat, but the payout isn’t generous enough to create an income stream. But you could systematically sell your stocks and reap the capital growth benefits. Franco-Nevada is still a decent investment (if you want to start building your TFSA funds now). It offers a 10-year compound annual growth rate (CAGR) of 18.5%, and was a powerful growth stock even before the recent rise in gold demand propelled the valuation of gold companies.
Foolish takeaway
The CERB recovery initiatives that the CRA is undertaking now have proven one thing: You should never apply or receive a benefit payment that you don’t qualify for. The CRA is likely to demand their payments back when they find out, and it can be very difficult to conjure up thousands of dollars to pay back the CRA because you’ve already spent the benefit payment.
