Canada Recovery Benefit (CRB) is not a true replacement for the CERB. Though it sounds a lot like the CERB, there are many characteristic differences. But the main one is that the CRB is explicitly designed for people that don’t qualify for the EI, primarily freelancers and gig-workers whose erratic income pattern may disqualify them from the EI benefit.
Still, the CRB is a very generous benefit and serves an essential purpose. It fills a void between the EI and the CERB that potentially contains hundreds of thousands, if not millions of Canadians that need government support.
If you are one of the people who want to apply for the CRB, there are two things you should know about, so you don’t get qualified.
The income rule
When applying for CRB, your income in 2019, 2020, or 12 months preceding the application (that would contain part of 2019 and most of 2020) should be $5,000 or more. Understand that these are three different time periods. You have to choose the one that fits the income limit. Also, you qualify if you’ve lost your income entirely or by 50%.
If your income was reduced only by 30, 40%, you might not qualify. If you have concerns about how you should calculate that, or how the CRA will figure that, it’s better to clarify with the concerned authorities before applying.
The “seeking-income” rule
One of the eligibility criteria is that you were seeking work in this period (a job or self-employment opportunity). This might be trickier for people who primarily work gigs and freelancing jobs. Just signing up for the job bank website might not be enough.
Still, you should try and document any job application you have sent. If you’ve applied for gigs, you may take a screenshot and record the date and time of applying. Having records and proof (if possible) of job and freelance work hunting is imperative in case CRA decides to verify your claim.
From CRB to nest egg
If you don’t need the whole amount, you can invest the leftover CRB to start creating a nest egg for yourself. Even if you can set aside $200 from every month’s CRB, you will have $1,200 in six months. It might not look enough, but in a stock like C-Com Satellite Systems (TSXV:CMI), with a 10-year CAGR of 31%, the $1,200 might grow to $4,600 in five years.
That’s more than two months’ worth of CRB by itself and can act as a small nest-egg. If you leave it alone for an even more extended period and the company keeps growing, the nest-egg would be even more significant.
It’s a world-class mobile antenna company. While the tech might seem old, if the company focuses its attention in the right direction, it might find several expansion avenues, especially with the growth of 5G, which depends upon several small antennas for data transmission. The small, $112 million market-cap company has no debt and a solid balance sheet.
Foolish takeaway
The CRB can provide an invaluable service in today’s gig economy. It can help a hefty portion of the working population that doesn’t qualify for the EI. And since it’s taxed at the source, it wouldn’t add to your next year’s tax burden. Still, you can’t just assume that the government got all the tax from your CRB payment, and run your own numbers.
