Federal Government Will Not Permit Employers to Top-Up the CERB Through a SUB Plan
Date: May 11, 2020
On May 8, 2020, the federal government published a new question and answer (Q&A) about the use of Supplemental Unemployment Benefit (SUB) plans to top-up the Canada Emergency Response Benefit (CERB).
In the Q&A, the government explained that employers cannot top-up the CERB through a SUB plan. It confirmed that the provisions under the Employment Insurance (EI) Regulations that enable employers to make additional payments to workers in receipt of EI benefits through SUB plans do not apply to the CERB.
The government had previously modified the CERB program to permit employees receiving the CERB to earn up to $1,000 in employment or self-employment income in each benefit period. The Q&A states that any amounts received by individuals from an employer in excess of the $1,000 threshold would create an obligation for the individuals to repay CERB amounts they received for the same benefit period.
The government explained that employers may continue to submit SUB plans to Service Canada to enable them to make payments to employees who are currently receiving EI regular or sickness benefits for claims that arose prior to March 15, 2020. A SUB plan could also be used to top-up employees who have received 16 weeks of CERB benefits and move onto regular EI benefits because they have not yet been recalled to work or found a new job.
Had the federal government not temporarily replaced the EI system with the CERB, employers would have been able to use SUB plans to top-up their employees’ EI benefits. The government’s position will be disappointing news for the many employers who do not qualify for the Canada Emergency Wage Subsidy (CEWS) and had hoped to be able to assist their employees by topping up the CERB to provide a higher percentage of income replacement, like those received by employees through the CEWS.
Should you require further information, please contact Caitlin Morin at 416.864.7024, Stephanie Kalinowski at 416.864.7263 or any member of our Pension, Benefits and Executive Compensation Group.
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