If you received COVID-19 benefit money from the Canada Revenue Agency but weren’t sure if you qualified for it, be warned that the tax man is coming.
When the pandemic was declared in 2020, the Canadian government rushed out billions in aid to citizens who were forced out of their jobs.
In that flurry of activity, hundreds of thousands of Canadians received the benefit, some even when they weren’t supposed to.
Now, the CRA is looking for that money back, two years after it was issued.
Greg Bates is one of the many people who recently opened their email inbox to find a letter from the organization informing him that the money needed to be repaid.
“I was completely shocked,” he told CTV News in an interview on Monday.
“I had gotten an assessment back in 2020 that they knew they gave me the $2,000, they’re going to go a couple of weeks without sending me any money to make up for that difference. So there’s the confusion there.”
In the notice, the CRA says Bates was “paid more benefit” that what he was eligible to receive.
It also included details about how much is owed and instructions on how to make payment arrangements if necessary.
Bates says that now, two years after the money went into his account, he thought he was “free and clear.”
“Then this shows up and there’s less confusion more than anger. I’m confused by the messaging – I don’t understand what this debt is all about.”
He adds it’s also caused a great deal of stress in his life.
“You’re suddenly being billed money that, you know, I’m not going to say I have, but it’s coming as an unexpected bill.”
Some people could have avoided those “unexpected bills” if they just filled out the proper paperwork, says one Calgary accountant.
It’s not too late to do that either.
“They should start filing some of their paperwork in and take it back as far as they can,” said Doug Gablehaus.
“I’m currently working with one of my clients, they were asked for their $2,000 back, I’ve opened up their claim again, I’ve gone right back. And I’ve submitted the paperwork for them to get over $10,000 back .”
REACH OUT TO THE EXPERTS
Canadians who feel overwhelmed by the issue need to pay attention to the letter and reach out to the CRA, says financial experts.
“I know I’m speaking to people just like me – that piece of paper feels like it weighs 5,000 pounds,” said Taz Rajan with Bromwich+Smith insolvency trustees.
“But, trust me, opening it is going to be in your best interest.”
Rajan says the CRA is open to communication about this issue and that’s the first thing people should do.
“When you owe money to CRA, CRA has more rights than other lenders do,” he said. “They can garnish your paycheck, they can garnish your bank account, they can charge interest and penalty. So, it can sound very, very scary.”
On top of talking with the CRA, Rajan also suggests anyone who is concerned about their situation to reach out to businesses like his.
“How do we make this work for your unique situation and your financial situation and then CRA doesn’t have to be so big, bad and scary?
“I’m all for normalizing these conversations.”
A sign outside the Canada Revenue Agency is seen on May 10, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
‘ATTESTATION-BASED APPROACH’
The CRA, in response to inquiries about the issue, said that it understands that the COVID-19 pandemic was “difficult for many Canadians.”
It went on to say that in order to spread the money as quickly as possible to those who needed it, it counted on applicants telling the truth about their circumstances.
“The Government of Canada selected an attestation-based approach to enable rapid delivery of COVID-19 individual benefits to millions of Canadians. This means that individuals self-declare the information they provide when they apply for the benefits, and the CRA may verify this information at the time of filing and/or at a later date,” the emailed statement read.
The agency confirmed that the letter Bates and many other Canadians have received is authentic and there are debts on their CRA accounts that they will need to be dealt with.
It also said that it strives to help Canadians struggling with any sort of circumstances.
“We want to help impacted individuals resolve any issues and our agents will work with them on a case-by-case basis. The CRA has expanded provisions to help individuals meet their tax obligations during these difficult times, including flexible payment arrangements.”
Anyone who wishes to make a formal request for a reconsideration can do so by contacting the CRA within 30 days of the date of their notice of debt.
The CRA adds that those who applied for the benefits in good faith will not be penalized.
(With files from Kevin Green)