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Is CERB Subject to an Overpayment if you Receive a Severance Payout Afterward? We Have the Government’s Answer!

David M. Brown

Co-Founder + Partner
March 8, 2021

For months now, there has been a question burning in the minds of employment lawyers across Canada: if my client received CERB, will they be subject to an overpayment if we settle their wrongful dismissal case?

The question seems logical, and one would expect it would be fairly simple to answer. After all, we know that recipients of Employment Insurance are often subject to an overpayment of benefits when they receive severance for the same period of time that they received EI. As CERB offers a similar safety net to EI, it should be treated the same way, right?

You would think so. However, to the frustration of many, there have not been any policies or directives issued by the Government confirming this (at least to my knowledge). So, tired of existing in this malaise of uncertainty, I filed a Freedom of Information Act request seeking the following:

Any policy, directive, or other communication concerning whether recipients of the Canada Emergency Response Benefit are subject to an overpayment or Notice of Debt if they receive a retiring allowance after their receipt of CERB?

On February 23, 2021 we received the following response from ESDC:

I regret to inform you that a search of the records under the control of ESDC has revealed that no records exist in response to your request.

This response is problematic from a couple of perspectives:

  1. It means that the CERB program was started (and a significant amount of money paid out) without any plan as to whether any of the funds would be repayable if employees receive severance or other income; or

  2. There is a plan to deal with overpayments, but it will not be disclosed until some unknown time in the future.

The impact on Canadians is significant; in a time of job insecurity and financial insecurity, the government may come knocking at some time in the future demanding repayment. How can Canadians properly budget their finances in the face of such uncertainty? We need an answer!

We will be filing an appeal to ensure we get clarity on this issue, and hopefully will have new information to report shortly.