We’re getting reports from a few clients about this message from CRA:

To be eligible for CERB, you must have earned employment or self-employment income of at least $5,000 in 2019 or in the 12 months before the date of your application.

Based on the records we have at this time, we cannot confirm that you meet this requirement.

This communiqué has left people terrified that they may be asked to repay CERB, or that they owe the money back now.

The wording here is important: “We cannot confirm…” Meaning, they literally don’t know if you met the eligibility requirements for CERB.

Before we go any further: check the last line of the letter. If your letter ends with If you determine that you meet the income eligibility requirements for the CERB…you can disregard this letter, guess what? You’re not being asked to provide any proof at this time. Read on, though, to learn more about what may happen going forward.

First things first: you don’t owe any money (yet)

This message from CRA is not a bill. For most people it’s more of a heads-up: Just because you’ve received CERB doesn’t mean you’ve been entitled to it. CRA is asking you to double-check that you meet the requirements, and, if you don’t, to voluntarily pay back any overpayments before they ask. [Ed note: If you don’t do this now, it’s highly likely that CRA will do their own spot checks at a later time and demand any required repayments then.]

Alternatively, for some people this is the beginning of a review process for upcoming payments, where Canada Revenue Agency (CRA) requests further information before releasing the next CERB payment.

As with all requests of this sort, it’s best to respond without panicking. When CRA wants information, always simply provide it to the best of your ability. Much of the time that’s all that’s required.

Previous CERB payments

You may have already received CERB without qualifying for it.

The government always had eligibility rules for CERB: To be eligible, a person must have earned at least $5,000 in the 12 months preceding March 15, 2020. But throughout 2020, they gave out CERB payments without doing full screening, because time was of the essence. Doing a full screening at the time would have slowed the system down and left desperate people without money.

But since true eligibility screening wasn’t done up front, they’re left in a situation where they’ll have to do the full eligibility screening after the fact, and attempt to correct the payouts at that time.

Current and future CERB payments

If you’ve received a screening letter in response to your most recent request for CERB, it’s because CRA lacks clear evidence, based on what they have on hand, that you meet the eligibility requirements.

Back in the first half of 2020, CRA took people’s word for it. All you had to do to receive CERB was to tell the government you’d earned over $5,000. Obviously that isn’t a stringent test of eligibility.

Unlike earlier in the year when they released CERB with minimal screening, now that things are a little more settled down they have to do their due diligence. For CRA, that almost always entails requesting further information, clarification, and/or supporting documents.

When CRA wants information it’s generally best to simply provide it to the best of your ability. Much of the time that’s all that’s required.

Who really qualifies? Why doesn’t the government know?

A person is eligible for CERB (and not subject to repaying it) if they earned at least $5,000 between March 16, 2019 and March 15, 2020, i.e., the 12-month period before the COVID-19 shutdown.

If you earned $5,000 in 2019, that would have shown up on your 2019 tax return (though the tax return wouldn’t show how much of that income was actually earned inside the eligibility period, i.e., after March 16, 2019). But if you earned less than $5,000 in 2019, and the remainder of it in the first part of 2020 before the shutdown, CRA has no documentation of that.

So for a lot of people, particularly those with very low earnings in 2019, CRA may not have enough information on hand to confirm that an applicant qualifies. For that reason, they’re asking for additional information now.

If you can show sufficient documentation that you did indeed earn at least $5,000 in the 12 months before the shutdown, you should receive your CERB benefits.

Who will have to make repayments?

Anyone who received CERB benefits earlier in the year (during the low- to no-screening period) who is later determined to have not qualified for those benefits will have to pay them back.

When will I know if I owe?

Canada Revenue Agency (CRA) is doing some of the screening now, and depending on their process they may complete all the retroactive screening at a later date. You will know you owe when you receive a notice requesting the repayment from CRA.

Beware of fraud!

There are a lot of fraudsters out there. It is 100% likely that someone is currently putting together a huge email campaign to bilk people out of money by telling them to repay the CERB…into the scammer’s pocket.

A couple of things to note: CRA never sends personal information (including amounts owing) via email. When it comes to sensitive information they only send paper letters, or communications through the CRA MyAccount portal. Moreover, CRA never requests payments in Bitcoin or other virtual currency. Learn more about avoiding fraud here and here.

What do I do if I can’t pay?

These are incredibly tough times, and not qualifying for CERB doesn’t mean you aren’t suffering. If you owe money to CRA, know that you can probably choose to hold off payment for now.

CRA typically charges interest on amounts owing, so the longer you wait the higher the bill will be. CRA’s interest rate is 5% per annum, compounded daily. That compares pretty favourably with the average credit card — just sayin’. And you may find that 5% a whole lot easier to pay back when the economy is running again, than right now. (Which turns your CERB overpayment into a loan at 5%, if you think about it.)

It is also possible that CRA will simply withhold the amount you owe from some future tax refund. In other words, if you owe them $1,000, they’ll just reduce some future tax refund by $1,000 plus interest and call it a day.

For most people, CRA will not take any further action if you don’t pay right away, so long as you don’t owe large amounts. If your debt is large (say, over $10,000), CRA has been known to escalate by freezing bank accounts. But they usually send many warnings before that point (by letter or through MyAccount) so you have time to respond.

So…what do I do now?

The bottom line is always the same: always read letters from CRA without delay. If (if!) they’re asking for something, respond in a timely manner, provide them whatever information or documents they require, and don’t panic.

Note that we are still investigating this situation. If our understanding changes, this page will be updated to reflect that.