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A CERB example...am I correct?

1K views 7 replies 5 participants last post by  jargey3000 
#1 ·
Let's say you have perdon, a senior, who has worked part-time for the last number of years at a salary of $1000/month, or $12000/year.
This year, due to covid, her hours were cut starting back in March so she's only earning $$800/month.
My understanding is she qualifies for CERB, and so will receive the $500/week benefit for the proposed 24 weeks of the program.
So...thanks to the virus, her earnings will go from $12000 in 2019, to $15600 in 2020 ($2000 for jan & feb, + $12000 CERB for march-oct. + +$1600 for nov.dec.
Am I correct in this?
And, for anyone who earned less, say $7-8000 last year, their relative increase with CERB would be even greater.
 
#3 ·
that's kinda what I was getting at.
and, CERB eligibility doesn't take other sources of income into account.
you could have 'earned income' of only $5000, but also substantial other income from dividends or capital gains or pensions or whatever, & still qualify for the full CERB benefit of $12000.
what im suggesting is that there are probably A LOT of people getting this that really dont NEED it.
 
#4 · (Edited)
The program was not designed to take months of preparation to develop a program that would exclude all other possibilities beyond a desperate need for money.

There are always exceptions to the rules and the lines must be drawn somewhere. As Chrystia Freeland has said in the past, it was one of the most difficult decisions on where to draw that line. Who to approve and who to deny and on what basis. Earned income, investment income, overall wealth,..........ad infinitum.

The purpose of the program was more than providing income for unemployed workers. An important and powerful secondary consideration was to support the economy by promoting spending to keep businesses afloat. It was a largely successful program in that regard, as Canada's economic GDP held fast. A sudden removal of all income and spending would have had a rippling effect on the economy with the danger of crashing it totally. As a result of the CERB and other government support, the future will require the economy to restart......rather than a build up from total destruction.

And so......was if fair ? No, absolutely not. What is necessary ? Perhaps........depends on who you talk to, but most people would prefer it to the alternative.
 
#5 ·
The challenge that the Government made was how to design a 'perfect' program vs how to get the money out to those who need it and need it immediately. Not saying that these are mutually exclusive goals but they might be given the time frame. I could be mistaken but I was under the impression that there was going to be some sort of check or claw back over and above simply taxing the amounts given.

I rec'd the $300. senior allowance. I do not need it, did not ask for it. I know that at least 28 percent will be clawed back in tax, perhaps more if the Gov't comes up with a benefits repayment scheme as a line item on our 2020 tax return.

One thing that I believe the Gov't should be doing is to make it clear that these amounts will be taxable and that some people will end the tax year with tax owing because of it.
 
#6 ·
Let's say you have perdon, a senior, who has worked part-time for the last number of years at a salary of $1000/month, or $12000/year.
This year, due to covid, her hours were cut starting back in March so she's only earning $$800/month.
I think the scenario you describe is correct. She would be eligible for CERB because she's never earning more than $1000 employment in a month. There are definitely some people who qualify for CERB, resulting in higher income than they made pre-COVID. Is that fair?

Yes, I think it's fair enough. The government had to very quickly roll out the system and start payments -- which they did. It all happened incredibly fast, to meet an emergency situation, and the payments were very fast too. This was a successful system.

I share your concern about people with significant investment income. Some wealthy people would have huge assets, and get a lot of interest / dividends / capital gains... AND still get CERB on top. That is not ideal. Maybe it would have been better to set the threshold based on 'total income' instead of 'employment income'.

In the big picture, those are pretty minor points. The government did the right thing, and I applaud their fast response. How often do you see a massive new program come online within a few days and actually get payments to people within just a day or two of them filing a claim?
 
#7 ·
I agree with the above posters. They needed to do it quickly jargey3000 and they did so. You can't ask them for perfection.

I always like the 80/20 rule. That rule or Pareto's Principle says you get 80% of the result from 20% of your efforts. In a case like this it says you can get 80% of the goal in 20% of the time. To get 100% of the goal would have taken 5 times as much time.

So yes, some have 'profited' from it but the key is that far more of those who really needed it and did not 'profit' from it, got it in a short period of time.
 
#8 ·
I, too, agree with the sentiments above.
But, how much more complicated or time-delaying would it have been to simply add a provision like:
"To qualify, your Net (or Total) Income for 2019 must have been LESS THAN $..X.."?
The problem, of course, is - what should "X" be?.
This might have eliminated some of the 'profiteering'.
 
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