About Jiayue Tax & Financial Planning:
Jiayue Tax Planning is jointly provided by Michael Gao CPA Inc. and its affiliated firm,
Citistar Wealth Management. By combining expertise from both firms, we aim to serve every client
with professionalism and help you succeed financially.

During the COVID-19 pandemic, the Government of Canada and the BC Provincial Government launched
a series of financial support programs for individuals and businesses.
However, each benefit comes with specific eligibility requirements and important considerations.

While some benefits have simple application processes,
the Canada Revenue Agency (CRA) may later audit claims.
If it finds that recipients—intentionally or unintentionally—received benefits they were not eligible for,
repayment will be required.

In this article, we analyze the key considerations and common issues individuals should be aware of
when applying for pandemic-related benefits in Canada.

1. Canada Emergency Response Benefit (CERB)

The Canada Emergency Response Benefit (CERB) is a federal income support program
created for individuals who lost income due to the COVID-19 pandemic
but did not qualify for Employment Insurance (EI).
Essentially, CERB was designed to provide temporary income replacement
for those unemployed or who experienced a significant reduction in work hours due to the pandemic.

CERB covered the period from March 15 to September 26, 2020.
It provided $500 per week for up to 16 weeks,
with the final application deadline on December 2, 2020.

Eligibility Rules for CERB

• Applicants must reside in Canada and be at least 15 years old.
• They must have stopped working or had reduced income due to COVID-19.
• For the first claim period, within the 4-week period applied for,
  the individual must have earned less than $1,000 in income
  for at least 14 consecutive days.
• For subsequent claim periods, the applicant’s income must remain below $1,000
  throughout the 4-week period.

This requirement means that during any CERB claim period,
income from both personal and self-owned corporations should not exceed $1,000.
The income reduction must be involuntary.
If someone deliberately keeps income below $1,000 or if income was already below $1,000 before the pandemic,
they would not meet the eligibility requirement.

Minimum Income Requirement

To qualify for CERB, applicants must have earned at least $5,000
in income during 2019 or within the 12 months prior to applying.
Eligible income includes:

• Employment income
• Self-employment income
• Non-eligible dividends from small businesses
• Royalties and honoraria
• EI maternity or parental benefits

Some self-employed individuals may wonder whether they can adjust their accounting
or reporting timing to meet the $5,000 threshold.
According to Canadian tax law, income is recognized at the time services are performed
or products are delivered—that is, when the invoice is issued.

Any attempt to retroactively modify income records to meet CERB eligibility
must be supported by proper documentation and legitimate reasons,
such as written payroll or dividend records, or proof of involuntary job loss.

The Parliamentary Budget Office (PBO) estimated that due to large-scale pandemic spending,
Canada’s federal deficit could reach $250 billion by 2021.
Since tax revenue is the government’s primary source of income,
stricter CRA audits are expected in the coming years, and some tax relief measures may be eliminated.

Therefore, maintaining clear written evidence and
ensuring that benefit claims are legal and justified are more important than ever.

2. BC Emergency Benefit for Workers

The BC Emergency Benefit for Workers was a one-time, tax-free $1,000 payment
provided by the BC provincial government.

Eligibility requirements included:

• Being a BC resident aged 15 or older as of March 15, 2020
• Meeting the eligibility criteria for CERB
• Having filed or being prepared to file a 2019 personal tax return
• Not receiving other provincial income assistance or disability benefits

3. Canada Emergency Student Benefit (CESB)

The Canada Emergency Student Benefit (CESB) was introduced to support
students and recent graduates who did not qualify for CERB.

From May to August 2020, eligible students could receive:

• $1,250 per month for most students
• $2,000 per month for students with dependents or disabilities

International students were not eligible for this benefit.
The application process was later announced by the federal government via the CRA portal.