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CERB Repayment

Are CERB Repayments Included in Bankruptcy?

After two years of restrictions, quarantine, and masking up, most people want to put the pandemic out of their minds. Unfortunately, many are receiving a continuous reminder of the pandemic in the form of CERB repayments. If you owe the government money for CERB overpayments, you are not alone. Many are feeling stressed out over how to repay this government debt.

If you can not afford your CERB repayments, consider reaching out to a Licensed Insolvency Trustee (LIT) for help. An LIT can review the debt management options you have available, including Bankruptcy. If Bankruptcy is the right option for you, know that your CERB debt can be eliminated.

The Canadian Emergency Response Benefit (CERB)

The Canada Emergency Response Benefit (CERB) was a government benefit that provided financial support to employed and self-employed Canadians who were directly affected by the COVID-19 pandemic. Eligible Canadians could receive $2,000 ($500 per week). The benefit was available from March to October of 2020 and during this time  $82 billion in CERB payments went to 8.9 million people in Canada.

Why Are People Being Asked to Repay CERB?

Due to the speed at which CERB was rolled out, many people received payments before they were even fully aware if they met the requirements. The Government used an attestation-based process to provide the benefit to Canadians who urgently needed them. This means it was up to the individual to determine if they were eligible for the benefit based on the available criteria.

Unfortunately, some applicants made a mistake when applying and received CERB when they weren’t actually eligible. Others received multiple payments within the same period, and in certain cases, CERB payments were received in error. With the stress of the pandemic, possible job loss, and confusing eligibility criteria, many people felt made an error when applying.

Who Has to Repay CERB?

Now, many Canadians have received repayment letters from the government indicating they have to repay some or all of the CERB benefits. According to the Government of Canada, you need to make a repayment if you:

  • Earned more than you expected during the time you were receiving CERB payments
  • Were collecting CERB from both Employment Insurance (EI) and the CRA for the same eligibility period
  • Applied for CERB and later received you weren’t eligible
  • You were a student in 2020 and were asked to repay the CERB

How to Repay The Money Owing

There are several options available to you to make your CERB repayments. First, you can send the payment to the department where you applied for it – CRA or Service Canada.

If you cannot pay back your CERB overpayment in full, you can arrange to pay your debt over time. To do this, you will have to directly speak with someone at the CRA. The government is willing to work with people on a case-by-case basis to make repayments as affordable as possible and is offering flexible payment arrangements.

Before contacting the CRA, you can visit the government website where they have tools available to help you calculate your income and expenses and determine what you can realistically afford to pay. After you have a good idea of what you can afford, you can contact someone at the CRA to set up your payment arrangement.

If you’re a student who was asked to repay the CERB, you may be eligible to get a credit towards your CERB debt. To see if you meet the conditions to apply for the credit, you can visit the Government of Canada website here.

What if I Don’t Repay CERB?

If you’re unable to make your CERB payments and you don’t reach out to the CRA for assistance, know that the government can take serious action. Simply ignoring this debt will not make it go away. The government will move to collect this money, and the CRA can take legal action which can have serious financial or legal consequences for you. To collect, the CRA can:

  • Garnish wages
  • Garnish your bank account
  • Seize future tax refunds and GST or HST credits

Note that you are also responsible for paying the costs and charges the CRA incurs while trying to collect the money they are owed.

Do I Have to Pay Taxes on CERB?

Yes, CERB payments are taxable. You must report all of the money you received for CERB as income when you file your taxes. If you received CERB from the CRA, you should have received a T4A for the benefit amount you received. You can also find your T4A online in CRA My Account.

If you received a benefit overpayment in 2020, any repayments you made in 2021 will also show up on your 2021 T4A slip. If you received CERB payments through Service Canada, you should have received a T4E slip at tax time.

What if I Can’t Afford to Repay CERB?

If you’ve made a payment arrangement with the CRA but still can’t afford to make your repayments, you are not alone. For many, there is simply no money in the budget to pay back this unexpected expense. If you can’t afford to make your payments, you can try to adjust your payment agreement with the CRA by contacting them. Your other option is to consider filing for a Consumer Proposal or Bankruptcy.

The Office of the Superintendent of Bankruptcy confirmed with Licensed Insolvency Trustees that, “erroneous or overpayment of CERB are provable claims in Bankruptcy.” In other words, it is possible to eliminate CERB debt if you file for Bankruptcy or a Consumer Proposal.

As a first step, contact a Licensed Insolvency Trustee (LIT) to discuss your debt management options and to determine if a Proposal or Bankruptcy is the right way forward. While no one wants to file for Bankruptcy if this is the path you need to take to get a fresh financial start, know that your CERB repayments are likely to be covered. A LIT is the only professional in Canada authorized to administer insolvency proceedings, including Bankruptcy and Consumer Proposals, that allow you to be discharged from your debt.

We’re Here to Help

If you are struggling with your debt and can not afford to make your CERB payments, reach out to one of our Licensed Insolvency Trustees today. We know the last few years have been a very difficult time for Canadians and we are here to help. Call Adams and Associates at 519-310-JOHN (5646) for a no-obligation consultation. Or, reach out online at

John Adamson, Licensed Insolvency Trustee Ontario

John Adamson, CPA, CMA

John is a Licensed Insolvency Trustee (1994), a Chartered Insolvency and Restructuring Professional (CIRP – 1994), and a Chartered Professional Accountant with a Certified Management Accounting designation (CPA, CMA – 1992). His experience includes more than 25 years of helping individuals, small businesses, their owners and even lenders, find solutions to their debt problems.

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