The Canada Emergency Response Benefit (CERB) extension became moot and academic on June 16, 2020. CERB recipients who are about to max out their taxable benefits are worry-free, but some employers are complaining.
Application procedures and eligibility requirements are the same as the original CERB program. However, the Canada Revenue Agency (CRA) and Service Canada are suspicious of fraudulent claims. Thus, each application undergoes strict scrutiny.
Similarly, CERB recipients must sign an attestation acknowledging the government wants them to work.
Additional financial relief
The taxable payments of $2,000 monthly ($500 weekly) were supposed to last for up to four months only. Millions of Canadians are still without work or unable to return to work. The CERB extension is for another two months.
In terms of a monetary amount, the additional relief is $4,000 for eight more weeks. The CERB extension is necessary and problematic at the same time. People affected by the pandemic will continue to have emergency money, but fraudulent claims are rising, and the increased budget will burden the economy.
The CERB program is not without controversies. Groups are calling on the government to turn CERB into a universal basic income. Other quarters are recommending a raise in the minimum wage, making the pandemic pay permanent and ensuring high health and safety standards.
Meanwhile, a growing number of employers are saying or reporting that CERB is serving to delay employees’ return to work. Employees must return to work when employers call. Some would rather receive CERB that return to work because you lose the entire benefit if you’re earning more than $1,000 a month.
CERB recipients should be aware that the payments are gross of taxes. The CRA will collect the tax due when you file your tax return in 2021. You might be spending all and have tax woes next year.
Remedy the problem
Many prefer a permanent benefit over a temporary CERB. But the benefit’s primary purpose is to help low-wage earners that are genuinely devastated by the COVID-19 outbreak.
For taxpayers with extra or spare cash, you can remedy the temporary problem and make it permanent. The point here is that you can lessen your dependence on government support if you have investment income.
A seed capital of between $8,000 and $12,000 (CERB equivalent) is sufficient to start dividend investing. The real estate sector has several high-yield dividend stocks. NorthWest Healthcare Properties (TSX:NWH.UN) is among them. This $1.87 billion real estate investment trust is a lucrative investment.
Your $12,000 can purchase 1,127 worth of shares ($10.65 per share). With the REIT’s 7.48% dividend, your income would be $897.60. If you hold on to the stock, the earnings will be constant and lasting.
Timing is perfect if you take a position in NorthWest Healthcare today. This REIT owns a portfolio of high-quality international healthcare real estate infrastructure. The properties in Canada, Australia, Brazil, New Zealand, and Europe are income-producers.
CERB is available to Canadians facing severe challenges as a result of the global pandemic. Return to work if the opportunity is there. However, apply for the extension only if your reasons are justifiable.
The post The CRA Made It Harder to Get the $4,000 CERB Extension appeared first on The Motley Fool Canada.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.
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