Do you owe CERB debt? Here's what Canadians need to know about repayment

Even though the Canada Emergency Response Benefit (CERB) wrapped up years ago, thousands of Canadians are still dealing with repayment letters, reassessments, and confusion about what they owe. If you’re one of the many Canadians surprised to see CERB debt show up on your CRA account, or you’re experiencing wage garnishments or deductions on government payments, you’re not alone—and you do have options for dealing with CRA debt.

We’ll walk you through how CERB debt happens, what your repayment options look like, and what to do if you can’t afford to pay.

How do I know if I received CERB overpayment?

In most cases, you’ll receive a letter from the CRA explaining that CERB was paid to you incorrectly, and it must now be repaid. If you’re not sure whether you owe anything, you can log into your CRA My Account to check for outstanding balances, benefit repayments, or reassessments.

Be cautious: scammers love to take advantage of CERB confusion. The CRA will never ask you to repay through a link in an email or text message. Always navigate directly to Canada.ca or log into CRA My Account to check your account or make a payment.

Why do I have to repay CERB?

There are several common reasons Canadians may end up owing CERB debt:

• You didn’t qualify. To be eligible, you needed to have a net income of at least $5,000 as a traditionally employed individual or $5,000 gross income as a self-employed individual in the 2019 tax year or over the 12 months before applying for CERB. Income from pensions, disability benefits, employment insurance, or investments couldn’t be counted towards your $5,000 total.

• You made too much money. Those who made over $1,000 gross (before taxes) in a month were ineligible for that month’s CERB payment.

• You applied twice. Both the CRA and Service Canada website had separate CERB application portals which allowed people to apply twice and receive double the CERB payments than they were eligible for.

• You received EI. If you received Employment Insurance and CERB at the same time, you may be required to repay one.

Does CERB debt collect interest?

The CERB debt itself doesn’t grow interest, meaning the amount you owe will not increase if you delay payment, but the CRA can take action to recover the money.

Can CERB debt expire?

CERB debt doesn’t “expire” the way many people hope, but there is a limitation period. The CRA generally follows a six-year limitation period for collecting most debts. However, this limitation period isn’t guaranteed.

The six-year timer will restart if you’ve provided a payment (either directly or via your tax refund or other credits), or the CRA has taken collection action against you such as wage garnishment or asset seizure, making it difficult for the debt to expire

Starting in 2024, the CRA began issuing legal warnings and pursuing legal action for those who can pay but don't cooperate. There is no official deadline to repay CERB. The CRA can continue collection efforts—including wage garnishment, freezing bank accounts, and redirecting tax refunds—if the debt isn’t addressed.

If you receive a CERB repayment notice and don’t contact the CRA, collection action will likely take place. Setting up a payment plan or exploring a consumer proposal with a Licensed Insolvency Trustee is often the best way to prevent escalating collection steps.

How do I repay CERB debt?

If you have the financial flexibility, start by paying what you can. Whether you have savings you can use for lump payments or are able to pay back a little each month, both options make a difference. You can use our debt repayment calculator to see what payments could look like.

The easiest way to repay CERB is to set up a schedule of payments with the CRA on their website.

What happens if I can’t repay CERB debt?

Like any other creditor, the CRA can garnish your wages and even claim funds from your bank account. However, CRA is part of the government of Canada and receives special collection privileges including:

• Putting a lien on your property or vehicle

• Collecting from your partner or relatives if you’ve transferred funds or property

• Taking funds directly from your GST/HST credits and tax refunds

How can I reduce CERB debt?

CRA is a difficult creditor to negotiate with, which is why many debtors enlist the help of a Licensed Insolvency Trustee. We are the only debt professionals that can legally negotiate with the CRA and other creditors on your behalf. Through a consumer proposal or bankruptcy, we can stop interest and potentially negotiate a lower overall payment to settle your debt and get you a financial fresh start. Learn how a Licensed Insolvency can help your personal financial situation by booking a free debt consultation.