Federal Government decides no CERB top-ups from Supplemental Unemployment Benefit Plans
May 13, 2020
The Government of Canada has apparently decided that it will not permit Supplemental Unemployment Benefit (“SUB”) plans to make Canada Emergency Response Benefit (“CERB”) top-up payments to members. Although the government has not formally announced this apparent decision, it has published the following on the ‘Questions and Answers on the Canada Emergency Response Benefit’ page.
Q: Can employers use a Supplemental Unemployment Benefit (SUB) plan to increase their employee’s weekly earnings while they are unemployed and collecting the Canada Emergency Response Benefit?
A: Given the simplified design of the Canada Emergency Response Benefit (CERB), the provisions that exist under the Employment Insurance (EI) system for employers to make additional payments to workers through SUB plans do not apply to employees who are receiving the CERB. Eligible individuals collecting the CERB receive $2000 for a 4-week period and may earn up to $1,000 in employment and/or self-employment income in each of their benefit periods from March 15, 2020 to October 3, 2020 while continuing to receive the CERB. Amounts received by individuals from any employer in excess of the $1,000 threshold would create an obligation for the individuals to repay CERB amounts they received for the same benefit period.
Employers that wish to do so may continue to submit a SUB plan to Service Canada. By registering a plan, employers can make payments to employees who are currently receiving EI regular or sickness benefits, and will also be prepared should employees need EI benefits at a future time.
This is unwelcome and surprising news for some trusteed SUB plans and other stakeholders.
A SUB plan is a specialized benefit plan established for the sole purpose of providing top-up payments for regular unemployment benefits provided under the Employment Insurance Act (“EI benefits”). In the COVID-19 pandemic, we had hoped and expected that the SUB plan rules would be modified to permit SUB Plans to provide the same financial security to members receiving the CERB as members receiving EI benefits.
There were early indications that such an announcement was forthcoming, including from the Office of the Minister of Employment, Workforce Development and Disability Inclusion. Interested parties who contacted Service Canada’s SUB Program team were told that the program team was awaiting instruction from the Employment and Social Development Canada (“ESDC”) and would be in touch when they had a clear directive. The SUB Program team have also been registering new SUB plans on an expedited basis—generally within a couple of days—despite the fact that all newly unemployed workers are currently eligible for the CERB and not regular EI benefits.
Absent a clear decision on the issue, stakeholders have been lobbying the federal government. A number of our clients, the Canadian Labour Congress, and some employer organizations have all appealed to the federal government to permit CERB top-ups. In light of this recent development, lobbying efforts targeting all levels of government as well as the ESDC and Canada Revenue Agency are all the more important.
Listen to Unifor National President, Jerry Dias’ message to Minister Carla Qualtrough here:
I have an urgent message for @CQualtro.
The CERB is doing a lot of good, but there’s a major loophole with no justification. You need to stop denying Canada’s workers the SUB plans that they negotiated. https://t.co/Gg2N1tlsmK#Unifor #COVID19Canada #CERB pic.twitter.com/Ukret6n6hD
— Jerry Dias (@JerryPDias) May 12, 2020
In the meantime, clients with or without SUB plans who are looking for ways to provide financial assistance to their members at this time should contact us.
Pension and Benefits