DFK Tax Newsletter

Canada Emergency Student Benefit (“CESB”)

The Canada Emergency Student Benefit (CESB) is providing assistance between May 10th and August 29th to current post-secondary students, those starting post-secondary education in September and students who have graduated after November 2019.  The basic assistance is $1,250 per month.  Students who have a disability, have a young child, or have a dependent with a disability, may be eligible for an additional $750 per month. Students can earn up to $1,000 per month and still be eligible for the benefit.  Students can retroactively apply for the CESB until September 30, 2020.

Eligibility

• The individual must be a Canadian citizen, permanent resident, or a registered Indian under the Indian Act
• There are no age restrictions
• The individual must be able to attest that due to reasons related to COVID-19 they are in one of the following situations:
  • Unable to work
  • Seeking work but unable to find it
  • Working but unable to make more than $1,000 (before taxes) over the 4-week period for which they are applying
• If the individual is seeking work but unable to find it, they may be required to demonstrate that they have been looking for work. CRA indicates that this could be done by registering with the Government of Canada Job Bank.
• An individual is not eligible for the CESB if the individual is receiving the Canada Emergency Response Benefit in respect of the same 4-week period
• The $1,000 of income includes the following sources of income:
  • Employment or self-employment income
  • Taxable benefits and allowances
  • Tips
  • Non-eligible dividends
  • Honoraria
  • Royalties
• The $1,000 of income does not include
  • Pensions, student grants and loans, scholarships, bursaries, graduate stipends
  • Income earned by anyone else
• The individual must be in one of the following three situations:
  • The individual is enrolled in a post-secondary program of at least 12 weeks in duration leading to a degree, diploma, or certificate at an allowable educational institution (an educational institution eligible for the Canada Student Loan program)
  • The individual graduated from or left their post-secondary studies no earlier than December 2019
  • The individual graduated from high school in 2020 before the first day of the 4-week period and has applied for a post-secondary educational program that begins before February 1, 2021.  For example, if the student graduates from high-school on June 30, the individual could apply for the July 5 - August 1 and August 2 - August 29 periods.

Eligibility periods

• An individual who is eligible for the benefit can apply with respect to fixed 4-week periods:
  • May 10 to June 6, 2020
  • June 7 to July 4, 2020
  • July 5 to August 1, 2020
  • August 2 to August 29, 2020

Benefit amount

• Everyone eligible for the benefit in respect of a 4-week period will receive at least $1,250
• An additional $750 is available for an individual who has a disability or a dependent
  • A disability is defined as: a physical, mental, intellectual, cognitive, learning, communication or sensory impairment, or a functional limitation – whether permanent or episodic in nature, or evident or not – that, in interaction with a barrier, hinders a person’s full and equal participation in society.
  • In order for a person to be considered to have a dependent, the individual must have at least one child under the age of 12 or a person with a disability who is wholly dependent on the individual or the individual’s spouse or common-law partner.
• The benefit received by the individual will be taxable and included in a 2020 T4A slip

Application

• Eligible individuals must apply for the CESB through the Canada Revenue Agency’s My Account.
• Individuals must reapply for the CESB for each 4-week eligibility period and must meet the eligibility criteria each time
• The individual must apply by September 30, 2020
• The individual may apply retroactively for any 4-week period that they qualify for

Verifying eligibility

• Documentation will not need to be provided as a part of the CESB application
• The Canada Revenue Agency (CRA) will review the information in their records to verify a student's eligibility to receive the CESB after they have applied.
• A student may receive a notice asking them to contact the CRA to provide additional information to validate their application.
• In cases where a student has received a payment and is later found to be ineligible, they will be contacted to make arrangements to repay any applicable amounts.