The CRA Will Cut Your CRB to $300/Week in July
If you or someone you know is a CRB Benefit recipient, you are no doubt out of a job, and stressed financially . It would seem that cuts are going to be made despite the fact the economy has not yet opened back up, and projections to do so , are clearly unceatrain.
This may very well bring added stress to the situation , but this is what it looks like in the months ahead …...
"It’s time to return to work, and Justin Trudeau’s government made that clear in the budget for 2021. After giving generous COVID-19 benefits of $500/week for over a year, the Canada Revenue Agency (CRA) is cutting the benefit to $300/week. You don’t need to panic, as this $300/week Canada Recovery Benefit (CRB) comes with another 12-week extension to 50 weeks. Here’s everything you need to know about the CRB extension and cut"
The budget 2021 CRB announcement:
There is no denying that Canada gave generous COVID-19 benefits last year and prevented a market collapse. In October 2020, the government replaced the $500/week Canada Emergency Response Benefit (CERB) with the $500/week CRB.
The CRA deducts a 10% tax at source on the CRB, which means you’d get $450/week. Originally the CRB’s maximum limit was 26 weeks, but the CRA extended it to 38 weeks in the light of the second wave. As the situation is taking a little longer to stabilize, the government has extended the benefit’s maximum limit once again to 50 weeks. The CRB is expected to end on September 25. But the government has given the CRA flexibility to extend the benefit to November 20 if required.
The second extension is where the government has decided to reduce the benefit amount to $300. So, how will this cut impact your benefits payment?
Impact of the CRB cut:
If you have been receiving the CRB regularly since it started, you would have exhausted your 38-week limit on June 19. By then, you would have collected $17,100 after-tax in the CRB. But the second extension will allow you to get continuous CRB till September 11. But there is a twist.
As per the budget, the CRA will cut the CRB amount to $300 after July 17, 2021. The CRA will withhold 20% tax on this amount too, which means $270 after-tax CRB. An eligible Canadian can get a maximum CRB of $21,060.
The $300 CRB will apply to new claims made after July 17 and those who have collected the benefit for 42 straight weeks. The budget did not clarify if someone who has not exhausted the 42-week threshold can continue getting $500/week in benefits payment.
If Emma started collecting the CRB in January, she would have only claimed 28 weeks of the benefit by July 17. Can Emma continue getting $500/week or will she also get $300? As per my understanding, she can collect $500/week for 42 weeks or till the CRB is active. I will wait for the CRA to update the CRB page to find out.
This cut is the government’s way of phasing out the COVID-19 stimulus package and helping the economy stand on its own. The government can’t give these benefits for a lifetime, as that will expand its fiscal deficit. A higher fiscal deficit could increase your future tax rates and reduce other CRA benefits.
What I don't understand...
is how a government that has closed down the economy,
can reduce/cancel this benefit that was created due to the fact ,
and yet the economy has not opened back up, still uncertain, and this ?
Shoulden't the economy be up and running with available job opportunities first ?
~MAY GOOD JUJU FIND YOU ~