CERB, which provided over 8.5 million Canadians with $2000 a month in income support since the start of April, came to an end on September 27th. Federal income support has now transitioned to Employment Insurance (EI) and new government benefits. If you’re self-employed and aren’t sure where you fit in the new web of supports, make sure you take these tips into account. What benefits are available to me? If you’re self-employed, you’ve always had the option of paying EI premiums on your earnings (currently frozen at 1.58%) to access special benefits – maternity, parental, sickness, caregiver and compassionate care. On the other hand, EI regular benefits provide income support in case of job loss, and are only available to employees with T4 earnings where the employer also pays into the premiums. The government has made several changes to EI in the wake of the coronavirus pandemic. Workers will now receive a one-time credit of 480 insured hours for sickness, maternity, parental or caregiver benefits. On top of that, parental benefits will now provide at least $500 a week. But as far as the self-employed are concerned, paying EI premiums will still only grant you access to special benefits. If you need more robust income support because your business is suffering as a result of the pandemic, that is where the new Canada Recovery Benefit comes into play. How does the CRB work? The CRB will provide $500 per week for up to 26 weeks to workers who are self-employed or otherwise ineligible for EI. To apply, you must have either stopped working due to the pandemic and are looking for work, or are working and have seen a 50% decrease in self-employment income due to the pandemic. See the Canada Revenue Agency’s website for a full list of eligibility criteria. The CRB is different from EI in a couple of ways. First, there are different clawback rules. While an EI worker returning to work will have to begin paying 50 cents in benefits per dollar earned immediately, CRB recipients won’t have to pay anything back unless they pass an annual income threshold of $38,000. Second, the CRB is an income support only and does not provide special benefits. If you aren’t covered already, be sure to seek out insurance suited to your unique risks as a self-employed worker.
Final takeaways As someone who is self-employed, you’ve never been afraid of a little risk in your career path. But while the pandemic has in some ways created new opportunities for freelancers, in others it has heightened financial risk. A recent survey of Canadians shows that COVID-19 has hit self-employed workers the hardest; 83% of self-employed survey respondents reported decreased incomes, largely due to cancelled contracts or payments deferred. With work unsteady, it’s important to keep both your overall business outlook and financial health in mind. On the one hand, it will be especially important to build up a diversified and loyal client base so that you have a steady stream of income to rely on and can grow your business into the long-term. You’ll want to hold onto your existing clients wherever you can. At the same time, if your business is suffering and you need help, the CRB is an excellent resource to tap into to protect your financial health.