CRA to Begin Legal Proceedings to Recoup Overpaid COVID Benefits

The Canada Revenue Agency is increasing efforts to recoup overpayments of pandemic-related benefits.

Starting in July, the agency announced on June 27 that it will commence issuing legal warnings and could initiate steps to recover overpayments from all COVID-19 programs such as the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), and the Canada Worker Lockdown Benefit.

Actions may involve deducting payments from wages or bank accounts.

The agency stated that legal action will only be taken against those who have not responded or cooperated and who have the financial means to pay.

“Our main aim is to urge individuals to reach out to us so we can collaborate to find the most suitable way to settle their debt, ensuring a fair and manageable process for everyone,” spokeswoman Sylvie Branch mentioned in an email.

The agency reiterated its commitment to supporting Canadians who are unable to repay their debt and advised those individuals to get in touch to devise a plan.

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The distribution of pandemic relief payments resulted in over $200 billion being distributed to individuals and businesses without detailed scrutiny.

The CRA has identified many individuals as ineligible for the payments and is working to retrieve the funds.

It reported that approximately $9.53 billion is still outstanding, including $5.41 billion from CERB, $2.67 billion from CRB, and $1.25 billion from the Canada Recovery Caregiving Benefit.

In May 2022, the agency initiated efforts to recover ineligible payments by sending letters promoting voluntary repayments.

In the past year, it sent collection letters, attempted phone contact, and introduced a process called “offsetting” to automatically utilize tax refunds and certain benefits to settle debts.

The government’s pursuit of funds has led to more than 1,000 disputes in the Federal Court between claimants and the Canada Revenue Agency as individuals challenge the charges.

However, the majority of improper pandemic assistance was directed towards businesses rather than individuals.

The Canadian Press correction: This is a corrected story. A previous version had the incorrect total for how much money the CRA is trying to recover.