CRA Worried That Incorrect Pandemic Benefit Claims May Exceed Initial Estimates by Billions
The Canada Revenue Agency has raised concerns that false claims for pandemic benefits could be billions of dollars higher than initially feared.
“Overall the Agency estimates its verifications alone will exceed the dollar value of potentially ineligible benefits received by individuals by almost $3.2 billion,” the Canada Revenue Agency (CRA) wrote to the House of Commons Public Accounts Committee. “That is 22 percent more coverage than the amount of potentially ineligible payments requiring further investigation identified by the auditor general.”
The rising costs detailed in CRA records did not include the growing expense of auditing taxpayers who claimed the $2,000 monthly Canada Emergency Response Benefit cheques.
Only $1.93 billion of pandemic benefits given to ineligible Canadians has been recovered to date, as reported by Blacklock’s Reporter. The amount of ineligible claims has cost each Canadian taxpayer at least $7.96.
Another $250 million was falsely claimed by Employment Insurance claimants through the Department of Employment. To date, just $133.9 million has been recovered.
The CRA told the committee that the cost of auditing to retrieve the funds was high. It said further work is planned to continue until 2025, with a projected overall cost of $707 million.
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“The Revenue Agency is sensitive to the hardship Canadians may still be facing as a result of the Covid-19 pandemic,” the agency wrote. “Payment arrangements have been expanded to allow the repayment of debt over a longer period of time. This approach takes into account the individual financial circumstances of the person.”
When asked how much of the overpayments were the result of “good faith mistakes by Canadians” versus fraud, Ms. Hogan said “I can’t give you an answer.”
Within days of the COVID-19 pandemic in March 2020, Parliament passed the Canada Emergency Response Benefits Act. No upfront proof of eligibility was required. The program, which was originally budgeted at $24 billion, instead ended up costing $81.6 billion.
