Don’t worry, we are here to help!
As part of its response to the COVID-19 pandemic, the Government selected an attestation-based approach to enable rapid delivery of benefits to millions of Canadians. This relied on individuals determining if they were eligible for benefits based on established criteria. It was expected that some individuals would later be found to be ineligible and be required to repay those amounts. In order to protect the integrity of Canada’s Covid-19 benefit programs, the Canada Revenue Agency (CRA) and Employment and Social Development Canada (ESDC)/Service Canada are making sure that those who received Covid-19 benefits were, in fact, entitled to them.
Transitioning into repayment
For those who received Covid-19 individual benefits from the CRA:
The CRA’s compliance efforts related to the COVID-19 benefits for individuals have been ongoing since the summer of 2020. Those who received COVID-19 benefits may have received nudge letters to remind them of what the eligibility criteria were. They may have received letters requesting supporting documentation for their benefits application or, in some cases, they may have received a decision letter informing them they were not eligible for the benefit payment(s) they received.
These activities are designed to confirm that Canadians were indeed eligible for the benefits they receive and are necessary to demonstrate sound stewardship of public funds that Canadians rightfully expect.
The CRA is now starting to issue Notices of Redetermination (NoRs) related to the COVID-19 individual benefits as part of its shift in the next stages of its compliance and collection activities. NoRs inform Canadians of debts or credits that have been established on their CRA accounts related to Covid-19 individual benefits. This correspondence will begin May 10th, 2022, and will continue for the next few years as the Agency continues its eligibility reviews of the COVID-19 benefits for individuals.
Although the filing deadline has passed, individuals that have not yet filed their 2019- and 2020-income tax and benefit returns are encouraged to do so as soon as possible. Late-filed tax returns can still be used to confirm eligibility for the CERB and the suite of Recovery Benefits.
As part of the CRA’s compliance efforts related to the COVID-19 benefits, individuals who appear to be at a high risk of ineligibility may be asked to submit documents for review to prove they are eligible. There are many reasons why a benefit applicant may be found to be ineligible. Some Canadians did not meet the minimum income threshold of $5,000, others may have earned too much income to qualify. Some may have also received benefits for more periods than was allowed. If they are determined to be ineligible following the review, they will receive a decision letter informing them that they were not eligible for benefit payment(s) received, the reason for the ineligibility, and that they will need to repay ineligible amounts. The decision letter also provides the recourse options if the individual disagrees with the CRA’s decision. The NoR is a follow up letter to the decision letter, is the official establishment of the debt, and provides the final amount of the overpayment.
For those who received Covid-19 individual benefits from Service Canada:
When Canadians first applied for the CERB with Service Canada, they received an advance payment of $2000. This was an advance of four weeks of the CERB, which was issued in order to get money into the pockets of Canadians as quickly as possible. To reconcile this advance payment for Canadians who remained eligible for CERB, Service Canada applied this advance against other payment periods in June, July and August, where recipients saw an interruption in payments in order to apply the money paid to weeks of eligibility. This approach fully reconciled the CERB payments for more than 1 million clients. However, some Canadians went back to work or were not on CERB long enough to reconcile the advance payments during the summer of 2020.
In mid-November 2021, Service Canada began sending Notices of Debt (NoDs) to Canadians who have an outstanding balance of money owed from the advance payment, informing them that they have an overpayment and outlining their appeal rights and the process for repayment. Service Canada is continuing to send these letters in the first half of 2022.
There are many Canadians who have already made voluntary repayments of benefits to the CRA but still have a balance owing. Once these debts have been established, the CRA will be in position to work with individuals to resolve their debt.
In an effort to ensure that agents (both contact centers and collections) are available to answer questions, NoRs and NoDs will be issued in a staggered manner. The Agency wants to ensure that Canadians will be well supported when calling in to discuss their unique situations.
The CRA and Service Canada remain committed to supporting Canadians during the COVID-19 pandemic
The CRA and Service Canada understand that due to COVID-19, individuals may find it challenging to meet their financial obligations, including paying debts related to taxes and benefits. The CRA has expanded provisions in place to help individuals meet their tax obligations during these difficult times including flexible payment arrangements. The CRA has introduced a service in its My Account portal to make repayments easy.
Individuals receiving NoRs and NoDs will be from a broad cross section of Canada’s population. There will be some who will be able to pay in full and immediately because their financial situation has improved since 2020. Others may only be able to repay their debts over time or at some future date. The CRA is here to help. Canadians who are still in a financially precarious state due to the pandemic can rest assured that the CRA will consider their unique situations with empathy.
The CRA is responsible for collecting debts owed to both CRA and Service Canada and has designed expanded payment terms to provide clients with more flexibility for repayment. The CRA will work with individuals to tailor a flexible approach based on their unique situations. For example, the CRA can negotiate a longer amount of time to resolve debt based on ability to pay. The Agency may also consider a pause in payments or a renegotiation of payment terms.
The CRA and Service Canada are standing by to help in any way possible. Canadians are encouraged to follow the directions they receive in any correspondence from the Agency or Service Canada. The CRA has detailed information available on the Canada.ca website for those who want to resolve their debt or explore payment options. People can also contact the CRA by phone to discuss their options with an agent.
What you should do if you received a letter:
Some of your constituents may have received a COVID-19 benefit from the CRA or from Service Canada that they were not entitled to and that they now need to repay. Repaying those benefits quickly might allow them to claim deductions from their payments on their T1 Income tax return. If they are unable to pay, payment arrangement parameters have been expanded to provide them with more flexibility on repayment.
If you receive correspondence from the CRA or Service Canada, you should not delay in opening it and take the actions requested in a timely manner. If there are questions about the correspondence, you should call the telephone number provided in the letter. Additional information is also available at this webpage: What to expect when the Canada Revenue Agency contacts you.
Find out more:
*The CRA collects all debts related to ineligibility or overpayment of COVID-19 benefits. This includes benefits issued by Service Canada.
Arrange to pay your debt over time:
If you cannot pay in full now, the CRA can work with you on a payment arrangement. A payment arrangement is an agreement between a taxpayer and the CRA to pay debt, owed either to the CRA or Service Canada, over a period of time. The CRA will work with you to determine the payment amount and the length of the payment arrangement based on your ability to pay.
These are some tools to help determine what you may be able to afford to pay on a regular basis:
If you want to set up a payment arrangement, you must call the CRA to speak with an agent.
Unable to pay:
If you are unable to pay your CRA or Service Canada debt right now or unable to pay it at all, you should call the CRA to discuss your situation. The CRA understands that these may be challenging times and have expanded the payment arrangement options to Canadians to provide more time and flexibility to repay based on their ability to pay. Ignoring the debt does not make it go away.
Make a payment on your other CRA debt:
The CRA collects all sorts of debts: tax, customs, GST/HST, etc. Paying debt in full helps taxpayers avoid paying interest on amounts owed. There are different options available for you to pay your CRA debt:
You can also confirm that your payment has been received. The CRA considers payments to have been made on the day it is either processed by a Canadian financial institution or received by the CRA:
Know how to prevent owing to the CRA in the future:
Do you have multiple income sources? This may impact the amount of income tax you have to pay. You can request that additional tax be deducted from your pay cheque or pension. You can get started by filling out a TD1: Personal Tax Credits Return.
Protect yourself against fraud - know how to recognize a scam:
If you suspect you might be a victim of a cyber incident, fraud or identity theft, call the CRA.
If you have been unexpectedly contacted by someone who claims to be a Service Canada employee and are doubtful of their identity, contact the 1 800 O-Canada (1-800-622-6232) service.
Social Insurance Number (SIN) theft can be reported by contacting Service Canada at 1-866-274-6627. For more information, visit the Social Insurance Number page.
Finally, we want every Canadian to know that we are empathetic to their situation, and we want to help them if they are facing hardships due to the pandemic.
Need More Information?
canada.ca/guide-taxes-payments
canada.ca/guide-impots-paiements
Contact CRA to discuss payment of your debt from within Canada or the United States:
Telephone number: 1-833-253-7615
Monday to Friday – 7 am to 8 pm (ET)
Closed on public holidays.
Call from outside Canada and the United States:
The CRA accepts collect calls by automated response. You can contact their service provider or operator to initiate the collect call.
Telephone number: 613-221-3002
Monday to Friday – 7 am to 8 pm (ET)
Closed on public holidays.
You can also request an individual tax debt call (Tax debt only). You should fill out this simple form and an agent will call you within minutes to discuss your individual tax debt. This service is available from 7 am to 7:45 pm (ET).
