Updated on January 8, 2024
Stay on this post to gain comprehensive details and insights into Repaying COVID-19 Benefits in Canada: Reasons and Repayment Timeline.
Repay COVID-19 Benefits in Canada
If you’re one of the millions of Canadians who received federal assistance during the COVID-19 outbreak, the Canada Revenue Agency (CRA) might scrutinize your case. In 2023, the CRA may request the repayment of COVID-19 benefits that were disbursed to you.
This scenario can occur if you received an emergency benefit, such as the Canada Emergency Response Benefit (CERB), and subsequently discover that you weren’t eligible, or if you obtained more benefits than rightfully allowed. If you are required to repay any received COVID-19 support benefits, you will receive a written notification from either Service Canada or the Canada Revenue Agency (CRA). Learn more about the process and essential details of Repaying COVID-19 Benefits in Canada.
Understanding Repaying of COVID-19 Benefits
In an effort to provide essential financial support to Canadians amidst the COVID-19 pandemic, the federal government introduced emergency benefits in 2020. A recent audit by the Auditor General revealed that Canadians were overpaid, with payments extended to individuals who were not eligible for COVID-19 benefits. The errors amounted to a staggering $4.6 billion.
There is a possibility that you were granted approval for an emergency benefit, such as the Canada Worker Lockdown Benefit (CWLB) or the Canada Recovery Benefit (CRB), only to later discover that you were not genuinely eligible. In such instances, the Canada Revenue Agency (CRA) may instruct you to repay the COVID-19 benefits through an official notice.
Declining to repay your COVID benefits could lead to substantial consequences, including asset seizures, liens, and income garnishments. For individuals with outstanding debts related to their COVID payments, the Canada Revenue Agency retains the authority to withhold tax refunds or GST/HST credits.
Repay Covid-19 Benefits in Canada Overview
| Article Title | Repay Covid-19 Benefits in Canada |
| Initiated By | Canada Revenue Agency |
| Affected People | Ineligible Recipients of COVID-19 benefits |
| Amount | Varies person to person |
Reasons and Timing for Repaying COVID-19 Benefits
You are required to refund the full amount of any received payments if you were ineligible for COVID-19 benefits or received them erroneously. Those who knowingly made false claims may face additional penalties.
If your situation has changed since you applied, you might need to repay a COVID-19 benefit. In cases where you were entitled to less financial assistance than received, repayment of the excess COVID-19 benefit may be necessary.
While there is no specific timeframe set for repaying COVID-19 payments, the CRA strongly advises Canadians to expedite the repayment process to avoid potential fines or interest charges in the future.
Repaying COVID-19 Benefits: A Guide on the Process
You can repay the CRA online, in person, or by mail at your convenience. If repaying the entire amount at once is not feasible, you have the option to establish a payment plan with the CRA. Simply determine the monthly amount you can afford and reach out to the Agency to work out the details.
You can choose to gradually settle your debt or repay the entire surplus amount of your COVID-19 benefits. If you’re only able to make a partial payment at the moment, it’s advisable to contact the CRA to discuss a payment plan. Refunds for overpayments of COVID-19 benefits can be submitted to the CRA online, through mail, or in person.
Including COVID-19 Repayment Benefits in Your Tax Claims
You have the option to deduct the repayment of federal COVID-19 benefits received in 2020 or 2021 from your tax return. Alternatively, you can deduct it from the return for the year in which you commenced the repayment, if necessary.
For the tax years 2020 or 2021, you can deduct a repayment by filling out Form T1B, titled “Request to Deduct Federal COVID-19 Benefits Payback in a Prior Year,” and submitting it along with your tax return. The CRA is expected to have the form available in January.
If you repay a portion of your COVID-19 benefit after December 31, 2023, you can still claim tax deductions, but they will be applicable only for the tax year in which the repayment was made.
In this article, our aim is to cover all potential questions you may have about repaying COVID-19 benefits in Canada.