CERB repayment: what if I can’t afford it?

Posted on 14 October 2023

Written by Ashvin Sharma

Are you anxious about how you will go about paying back government benefits? This is the problem of many Canadians, who, in the height of lockdown during the pandemic, were unable to work. You and many others may have received support via the Canada Emergency Response Benefit (CERB), and now owe a government debt that needs to be repaid. The CERB paid out $81.6 billion in benefits to nearly 9 million people. Many Canadians received these benefits without a full understanding of their eligibility and whether or not they met them. This was partly due to the speed with which the program was rolled out. Now, many Canadians have found themselves in this situation, whereby the Canada Revenue Agency (CRA) has asked for these benefits to be paid back. If you were one of these recipients, you may be wondering ‘what if I can’t afford to make my CERB repayment?’ It can be a stressful scenario to say the least, knowing that you owe a CERB repayment on top of a rising cost of living and fast growing bills. In this article, we explain all you need to know about making your CERB repayment. At Spergel, we have been helping Canadians gain debt relief for over thirty years and we will share with you the available options if you cannot afford to make your CERB repayment.

What is Canada Emergency Response Benefit (CERB) and CERB repayment?

The Canada Emergency Response Benefit (CERB) was a program designed to offer financial support to Canadians who were affected by COVID-19. If you met the eligibility criteria, you could receive $2,000 for each 4-week period you were affected. The financial options were also altered slightly, meaning that many could also receive benefits via Employment Insurance or the Canada Recovery Benefit. You were eligible if you were a Canadian worker and met the following criteria:

  • At least 15 years old, and living in Canada
  • Stopped working because of COVID-related reasons, or were eligible for Employment Insurance or sickness benefits – or, if you exhausted any of these benefits between December 29, 2019, and October 3, 2020
  • Were employed or self-employed with an income of at least $5,000 in 2019 or in the year prior to the date of application
  • Did not quit your job voluntarily

When submitting a claim, you could not have earned over $1,000 for any more than two weeks in the four week period prior. There were a number of mistakes in the applications meaning some Canadians received multiple payments by accident.

Why are Canadians being forced to make a CERB repayment?

Because of the urgency of the COVID pandemic, the government reacted quickly to get money to Canadians who needed it. This led to the CERB program being rolled out before it was fully complete. For this reason, some individuals received CERB payments by mistake. There are three key situations where CERB payments were made to those not entitled to them:

  • Not having the income to meet the eligibility criteria
  • Receiving CERB overpayment from the CRA and Service Canada
  • Earning more than anticipated when making an application for CERB

For this reason, the Canada Revenue Agency (CRA) is collecting CERB repayment from those who should not have received it on behalf of Service Canada. They sent out collection letters to those who received the benefit payments while ineligible. They also issued an accompanying statement to explain that the benefit was sent to participants without any oversight and that:

  • If you received CERB that you were not eligible for, you would be sent a notice of redetermination
  • If you cannot make your CERB repayment in full, you would not receive any interest or penalties on your debts
  • The CRA may keep any of your owed future payments, tax refunds, or GST credits until your CERB repayments are made – this is even if you have a payment arrangement in place with the CRA
  • If you are receiving EI benefits, your CERB repayment will be taken by Service Canada at source at 50% of your benefit

At the same time, the CRA then began to run through the payments to make sure that only those meeting the eligibility criteria were receiving CERB payments. They began to verify participants’ information either during the filing process, or afterwards.

How do you repay your CERB benefits?

If you are one of the many Canadians to have received $2,000 from the government for each four-week period you were considered eligible, or if you received them mistakenly, you have likely heard from the government. It has likely requested that you repay the full $2,000 for each four-week period that you were in fact ineligible to receive it. Thankfully, the Government understands that this is a lot to ask – especially if it is now an unexpected bill you have to face. For this reason, the government is allowing individuals to repay their CERB overpayments in full or over a longer period of time, interest-free. It will work with you to come to an agreement in the form of a repayment plan. These payments can typically be made online, by mail, or in person. If you are worried about your ability to repay your CERB benefits, help is at hand. Our experienced Licensed Insolvency Trustees at Spergel are here to assist you in exploring how you can best manage your CERB repayments, and to help you review your debt relief options for a stress-free future.

What if you cannot afford to make your CERB repayments?

Perhaps you have discovered that you must make a CERB repayment but cannot afford to pay back the full amount right away. Or, perhaps you cannot afford the minimum monthly payment on your account? In these circumstances, you should contact the CRA. They will help you to arrange a repayment plan in a way that is affordable for you. You may also want to speak to them if you feel your CERB repayment is incorrect, or if you want to try to reduce your automatic recovery via EI benefits. If you do not call the CRA to try and resolve your CERB repayment, they may pursue legal action against you on the debt owed. If you need to make a CERB repayment, you will have received a collection letter, especially if any of the following apply to your circumstances:

  • You returned to work earlier than expected, or if you received retroactive pay from your employer
  • You applied for the CERB but realized afterwards that you were ineligible
  • You received a CERB payment from both Service Canada and the CRA for the same period of time

Following public reaction, the Government announced last year that self-employed Canadians who applied for CERB, and would have qualified based on their gross income, no longer need to make their CERB repayment as long as they met all other eligibility criteria. This followed weeks of criticism of the CRA for not providing clear guidance.

What are the consequences of not making your CERB repayments?

As you can imagine, requesting CERB repayment has left many Canadians in a difficult situation. This is reinforced by the fact that the money is owed to the CRA, which has far greater powers than any other creditor. The CRA can quickly act, without much notice to you, although they have taken softer steps when it comes to collection CERB repayment. Consequences that the CRA can take if you fail to make your CERB repayments include:

  • Pursuing a wage garnishment against you
  • Freezing – or seizing – your bank account
  • Registering a lien against your assets
  • Seizing your home or assets for resale
  • Allocating any tax benefits including future tax refunds and benefits or credits towards your debt, including CCB and WITB

When the CRA acts on any of these steps, typically they will not stop. No matter how bad you may feel your situation to be, there is always a solution. Your first port of call should be a Licensed Insolvency Trustee, who can recommend a solution to make the CRA stop. If you are struggling with making your CERB repayment or any kind of debt owed to the CRA including tax debt, you should act quickly and book a free consultation with a Licensed Insolvency Trustee. There are solutions for CERB repayment forgiveness as well as all other types of debt, no matter if it is owed to the government or another creditor. You can also reach out to the CRA to work with them on a repayment plan that is affordable for you. The key here is communication, and ensuring they are aware of your situation. If they do not hear anything and you are not making your CERB repayments, this could signal to them that they need to take further action. If you are struggling to make your CERB payments, you may also want to look into a form of debt relief, which we will discuss further in this article.

How can you avoid these consequences?

The CRA will not want to default to pursuing these consequences. In fact, taking on action like a wage garnishment can be expensive and time consuming for the government. They would much rather try and resolve the situation without having to take action where possible. If, however, they cannot come to an agreement or if the debtor ignores the debt, they will not hesitate to act. There are a few steps you can take to try and avoid facing consequences from the CRA:

  • File any outstanding taxes you may have, and continue to do so on time each year. As well as showing you are compliant, it will help you to understand what you owe
  • Be proactive and reach out to the CRA to try and organize a payment arrangement
  • Be prepared to make some sacrifices in order to try and contain your debt – this may well mean reigning in your spending
  • Stick to any payment plan that is agreed, and inform the CRA as soon as possible if you think you will miss a payment

Despite any anxiety you may have, there is always help available. No matter how bad you may think your financial circumstances are, there is always a solution. For more information on your available options, reach out to Spergel today.

What solutions are available for forgiving or consolidating CERB if I cannot afford to make my CERB repayment?

The CRA has made its intentions clear that it wants to verify CERB benefits and reclaim as much money as possible where money should not have been paid out. It does also accept that some people made honest mistakes in their applications. Paying back CERB will understandably be difficult for some Canadians who were not expecting to repay the benefit. Recently, the Office of the Superintendent of Bankruptcy (OSB) confirmed that CERB is a releasable debt in insolvency. This means that you can write off CERB repayment along with other debts via a consumer proposal or bankruptcy when filed by a Licensed Insolvency Trustee. Here are your options for resolving your CERB repayment:

  • Paying in full – only if you can afford to
  • Speaking to a CRA agent as soon as you can to arrange a payment plan if you need more time to repay. If you can explain your financial circumstances and propose a reasonable amount to repay each month, they may be willing to work with you to come to an agreement. Being proactive can also help to avoid penalties and interest
  • Taking out a debt consolidation loan to condense all your debts into one for simplified payments and often at a lower interest rate
  • Filing a consumer proposal (a popular bankruptcy alternative) to keep your assets and reduce your debt by up to 80%
  • Declaring bankruptcy to clear your CERB debt if your payments were made erroneously or as an overpayment. In most cases, you can be discharged from bankruptcy in as little as nine months

Beyond making your CERB repayment in full, filing a consumer proposal or a bankruptcy via a Licensed Insolvency Trustee are the only legal methods of clearing or reducing your government debts.

How do I know which solution is right for me?

It is not always easy to know what to do next, especially if you are unable to afford the CERB repayments that you owe. At Spergel, our Licensed Insolvency Trustees offer free, no obligation consultations to help Canadians like you who might be struggling with unmanageable debt. We can review your financial circumstances, including any debts, and inform you on your options. We can share advice and recommendations if you need them too. If you are able to make your payments but are struggling to provide the full amount owed, a consumer proposal could be a good option for you. This is because Licensed Insolvency Trustees are usually able to negotiate reductions on debt by up to 80%. On the other hand, bankruptcy might be better if you owe a lot of debt and do not think you can keep up with the payments.

At Spergel, we understand how challenging handling overwhelming debt can be. If you are wondering ‘what if I cannot afford to make my CERB repayment?’, you should book a free consultation with a reputable Licensed Insolvency Trustee. At Spergel, we have been helping Canadians get out of debt for over thirty years, and we can help you too. We will get you on the pathway to financial freedom as quickly as feasibly possible.

What to read next


Ashvin Sharma

Ashvin Sharma is a Chartered Insolvency and Restructuring Professional and LIT (Licensed Insolvency Trustee) overseeing all of Spergel's offices in the Greater Vancouver Area and British Columbia. He is also our resident expert on homeownership debt and health debt. In his spare time, Ashvin loves to play sports, spend time with family and friends, and serves as a volunteer coordinator for "Free-Them", a Canadian organization committed to raising awareness about human trafficking.

Schedule a Free Consultation with Ashvin Sharma (or your local Spergel LIT) by:

Phone 1-877-501-4321 (toll-free)

24/7 live chat (with a human) on our website

Facebook messenger

Email (hello@spergel.ca)

Online booking calendar

Be Debt Free. You Owe It to Yourself.

You may be interested in:

Helpful starting information:

What to Bring to an Appointment

To get the debt help that you need, please bring a list of who you owe and how much to each, a list of everything you own and your monthly household budget. Don’t have everything right away? Don’t worry – We will guide you through each step.

Download Form

Your Information

We’ll walk you through our application process. But, if you want to prepare for your debt free assessment consultation in advance, download our information form and fill in what you can.

Download Form

Calculate Your Debt Repayment Options

How can you compare your debt repayment options if you don’t know how much they will cost you? Your solution will become much clearer when you are able to compare costs.

Debt Calculator

Ready to Be Debt-Free?

If you’re ready to be debt free, it’s time to meet with one of our knowledgeable Licensed Insolvency Trustees at your convenience and get started

Meet with a trustee