D’Arcy McDonald, Senior Vice President of Deposits, Investments & Payments at Scotiabank, is pictured in a handout photo. McDonald advises people who’ve been asked to repay CERB to take their time and explore their options moving forward. THE CANADIAN PRESS/HO-Scotiabank, *MANDATORY CREDIT*

D’Arcy McDonald, Senior Vice President of Deposits, Investments & Payments at Scotiabank, is pictured in a handout photo. McDonald advises people who’ve been asked to repay CERB to take their time and explore their options moving forward. THE CANADIAN PRESS/HO-Scotiabank, *MANDATORY CREDIT*

Think you may need to repay CERB? Best to start planning now, experts say

Experts hope there will be leniency on a case-by-case basis

When 20-year-old Alex Coucopoulos got a letter from the government in December telling him he’d have to pay back $12,000 of pandemic aid, the stress was immediate.

“It was a really bad situation,” said Coucopoulos, who lives at home and immediately took $5,000 out of his savings to re-pay the Canada Emergency Response Benefit

“It was very stressful. Pretty much my entire income from my (new job) would have gone to paying the rest back.”

The Ottawa resident said he applied last year after discussing his eligibility with a Canada Revenue Agency representative on the phone, who told him that he was eligible for CERB because his gross income in 2020 was over $5,000.

But he was one of many Canadians who were caught out when the government agency said applicants were actually required to have a net income over $5,000.

Coucopoulos was relieved when the Canadian government changed course last week and said people who applied thinking they were eligible because of their gross income would no longer have to repay CERB.

He said he can now continue with saving his income to pay the rest of his university costs, rather than setting aside all of his income to repay the benefit.

The Ottawa student’s situation is exactly why D’Arcy McDonald, Senior Vice President of Deposits, Investments & Payments at Scotiabank, advises people who’ve been asked to repay CERB to take their time and explore their options moving forward.

“Watch the government communications closely, because I think those sands are still shifting,” said McDonald, saying that the government still could change course on who is required to repay CERB.

“But if you did receive that uncomfortable letter, you probably need to think about immediately filing your taxes… to figure out what your obligations are to the government.”

McDonald said filing taxes now will help clear up whether you owe the government money, if you accidentally received both employment insurance and CERB, and if you can make a retirement savings plan contribution before the tax deadline to lower your amount owing for regular income taxes.

If you still end up owing the Canada Revenue Agency money for emergency benefits you weren’t eligible for, McDonald said people who earned less that $75,000 will be given an extra year of interest-free forgiveness until 2022

“If people are in that boat, that’s obviously a signal to create a payment plan, or to dig into whatever emergency savings you might have available to you, presuming you’re back on your feet and have those resources available,” said McDonald.

“It’s flexibility, and that’s what people hope to see from the government.”

For people who are still without work and aren’t in a financial position to repay benefits, McDonald said he hopes the government will provide some leniency to the debts on a case-by-case basis.

He pointed out that repaying CERB will be different from paying back private debt for things like mortgages or credit cards, and added that even some financial institutions provided deferrals on payments for those debts at the start of the pandemic.

“A private debtor would ratchet up pressure to get you to repay. I don’t think the government is in the same boat,” said McDonald.

“I don’t think they’d want to put those people at further risk by making you repay too quickly when you and your family are not out of the woods.”

READ MORE: Some Canadians facing CERB clawbacks may not have to pay it back: Trudeau

READ MORE: A rural-urban divide: Data gives most detailed look yet at where CERB went

Salmaan Farooqui, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Ladysmith’s famous Festival of Lights decorations are still up as of March 1, 2021. (Cole Schisler photo)
PHOTOS: It’s still looking a lot like Christmas in Ladysmith

Festival of Lights volunteers cannot remove the holiday roof top displays due to COVID-19

Island Health chief medical officer Dr. Richard Stanwick receives a first dose of Pfizer vaccine, Dec. 22, 2020. (B.C. government)
COVID-19: B.C. seniors aged 90+ can start to sign up for vaccination on March 8

Long-term care residents protected by shots already given

Firefighters from three departments battled a house fire south of Nanaimo for more than nine hours Sunday. (Photo courtesy Martin Leduc)
Home in Cedar destroyed by fire

Firefighters from three fire departments battle blaze fanned by strong winds Sunday

Police have identified the vehicle involved in the Feb. 14 hit-and-run in Chemainus and are continuing to investigate. (Black Press Media files)
Police seize and identify suspect vehicle in fatal Chemainus hit-and-run

Investigation expected to be lengthy and involved

A boat caught fire in Ladysmith Harbour early on Saturday, Feb. 27. (Photo submitted)
Search underway for missing woman after boat catches fire in Ladysmith harbour

A large boat caught fire on the morning of Saturday, Feb. 27

Langley resident Carrie MacKay shared a video showing how stairs are a challenge after spending weeks in hospital battling COVID-19 (Special to Langley Advance Times)
VIDEO: Stairs a challenge for B.C. woman who chronicled COVID-19 battle

‘I can now walk for six (to) 10 minutes a day’

Provincial health officer Dr. Bonnie Henry updates B.C.’s coronavirus situation, May 8, 2020. (B.C. government photo)
B.C.’s weekend COVID-19 cases: 532 Saturday, 508 Sunday, 438 Monday

Fraser Health still has most, eight more coronavirus deaths

B.C. Attorney General David Eby speaks in the legislature, Dec. 7, 2020. Eby was given responsibility for housing after the October 2020 provincial election. (Hansard TV)
B.C. extends COVID-19 rent freeze again, to the end of 2021

‘Renoviction’ rules tightened, rent capped to inflation in 2022

Face mask hangs from a rear-view mirror. (Black Press image)
B.C. CDC unveils guide on how to carpool during the pandemic

Wearing masks, keeping windows open key to slowing the spread of COVID-19

Churches, including Langley’s Riverside Calvary Church, are challenging the regulations barring them from holding in-person worship services during COVID-19. (Langley Advance Times file)
Det. Sgt. Jim Callender. (Hamilton Police Service screenshot)
B.C. man dead, woman seriously injured after shooting in Hamilton, Ont.

The man was in the process of moving to the greater Toronto area, police say

Wildlife advocate Gary Schroyen captured this picture of a one-year-old cougar in the Sooke Hills using a homemade trip camera. Vancouver Island is home to approximately 800 cougars, which makes up about a quarter of the total population in B.C. (Gary Schroyen photo)
Wildlife advocate Gary Schroyen captured this picture of a one-year-old cougar in the Sooke Hill using a homemade trip camera. Schroyen presents Animal Signs: The Essence of Animal Communication on Nov. 30. (Gary Schroyen photo)
Declining Vancouver Island cougar populations linked to wolves

Large carnivore specialist says human development still plays biggest role on cougar numbers

(Black Press file photo)
Child in critical condition, homicide investigators probe incident near Agassiz

The child was transported to hospital but is not expected to survive

Most Read