Do You Have to Repay CERB or CRB?

Although the Canada Emergency Response Benefit (CERB) and Canada Recovery Benefit (CRB) ended several years ago, many Canadians are still dealing with repayment notices and outstanding COVID-19 benefit debt.

If the Canada Revenue Agency (CRA) or Service Canada says you were not eligible for some or all of the benefits you received, you may be required to repay them. But receiving a notice does not mean you should ignore questions about the amount, your eligibility or your ability to pay.

Here is what you need to know—and what you can do if repayment would cause financial hardship.

Do You Have to Repay CERB?

You generally have to repay CERB if you:

• Did not meet the eligibility requirements for one or more payment periods;
• Earned more than the permitted amount during a benefit period;
• Received CERB from both CRA and Service Canada for the same period;
• Received a payment in error; or
• Received more money than you were entitled to receive.

CERB was available from March 15 to September 26, 2020. According to the CRA’s CERB repayment guidance, an individual who was ineligible for a particular four-week period may be required to repay the full $2,000 payment for that period.

If you believe the decision is incorrect, review the dates and reasons shown on your notice. Gather supporting records such as pay statements, bank records, invoices and proof of self-employment income before contacting the agency that issued it.

Do You Have to Repay CRB?

CRB was available from September 27, 2020, to October 23, 2021. You may be required to repay CRB payments if you did not meet the eligibility criteria, received a payment in error or earned more than the program’s annual income threshold.

CRB also included an income-based repayment provision. Depending on your net income for the applicable year, you may have been required to repay some or all of the benefit through your income tax return.

The repayment notice should explain why the amount is owing. If you do not understand the calculation or believe CRA has incomplete information, contact CRA before agreeing to a repayment arrangement.

Was Your CERB Issued by CRA or Service Canada?

This distinction matters because the debt must be handled through the correct department.

• If you received CERB directly from CRA, repayment is made to CRA.
• If you received CERB through Employment Insurance or Service Canada, the repayment is generally handled through Employment and Social Development Canada.

Your original payment records, tax slips or repayment notice should identify which department issued the benefit.

Are CERB and CRB Taxable?

Yes. CERB, CRB and the other federal COVID-19 income-support benefits were taxable income. Recipients were required to report the amounts shown on their T4A or T4E slips.

If you later repay a COVID-19 benefit, the repayment may affect your taxes. For repayments made after December 31, 2022, CRA says the deduction can generally only be claimed in the year in which the repayment was made.

Keep your repayment records and confirm that the appropriate tax slip has been issued. You can find additional information in the CRA’s guidance on the tax treatment of COVID-19 benefit repayments.

Because every person’s tax situation is different, consider speaking with a qualified tax professional if you are unsure how to report a repayment.

What If You Cannot Pay the Full Amount?

You do not necessarily have to pay the entire balance at once.

CRA allows people to request a payment arrangement based on their financial circumstances. If you have personal income tax or COVID-19 benefit debt of at least $1,000, you may also be able to use the Manage balance service in CRA My Account to:

• Make a full or partial payment;
• Schedule a series of payments;
• Contact the collections officer assigned to your account; or
• Request a callback.

CRA currently states that it does not charge interest on COVID-19 benefit debt. However, that does not mean the debt will disappear if it is ignored.

A payment arrangement should be based on what you can realistically afford after paying for housing, food, utilities, transportation and other essential expenses. Do not agree to a payment that you already know you cannot maintain.

What Can CRA Do to Collect a CERB or CRB Debt?

If you do not pay or communicate with CRA, the government may take collection action. Depending on the debt and your circumstances, this could include:

• Applying income tax refunds to the amount owing;
• Withholding certain federal benefits or credits and applying them to the debt;
• Contacting you to obtain financial information;
• Taking legal collection action; or
• Requiring payment from money that would otherwise be paid to you.

Opening and responding to CRA correspondence is important. Contacting CRA early may give you more opportunity to arrange manageable payments before collection action escalates.

Can CRA Cancel or Reduce a CERB Repayment?

A CRA payment arrangement changes how quickly you repay the debt; it does not normally reduce the principal you owe.

Taxpayer relief provisions may sometimes provide relief from penalties or interest relating to certain tax debts, but they generally do not authorize CRA to cancel a properly assessed principal debt simply because someone cannot afford to pay it.

If you believe you were eligible for the benefit or the repayment amount is wrong, that is a dispute about the decision—not simply an inability-to-pay issue. Contact the department named on your notice promptly to ask what review or objection options may still be available.

Can CERB or CRB Debt Be Included in a Consumer Proposal or Bankruptcy?

Some CERB, CRB and other government debts may be included in a consumer proposal or bankruptcy. However, the treatment of a COVID-19 benefit overpayment depends on the circumstances surrounding the claim.

Debts arising from fraud, embezzlement, misappropriation or fraudulent misrepresentation may not be released by a bankruptcy discharge. You should therefore have a Licensed Insolvency Trustee examine the notice, the type of debt and the facts of your case before assuming that the debt will—or will not—be eliminated.

A Licensed Insolvency Trustee can also look at your complete financial situation. In many cases, the CERB balance is only one part of a larger problem involving credit cards, loans, tax debt and other overdue obligations.

Your Options When CERB Debt Is Unaffordable

Depending on your circumstances, your options may include:

1. Verify the amount

Confirm which benefit periods are involved, why you were found ineligible and whether the debt belongs to CRA or Service Canada.

2. Ask about a review

If you believe the decision is wrong, contact the issuing department and ask about the available review or objection process. Provide any records supporting your eligibility.

3. Arrange affordable payments

If the amount is correct and you can repay it over time, ask for a payment arrangement that fits your actual budget.

4. Speak with a Licensed Insolvency Trustee

If you cannot afford the government debt along with your other obligations, a Licensed Insolvency Trustee can explain whether a consumer proposal, bankruptcy or another solution may be appropriate.

Get Help With CERB, CRB and CRA Debt

An outstanding government debt can feel intimidating, especially if CRA has started applying refunds or benefits to your balance. You do not have to determine your options alone.

At LCTaylor, our Licensed Insolvency Trustees help Manitobans understand their debts and explore practical, legally regulated solutions. During a free, confidential consultation, we can:

• Review your CERB, CRB, tax and other debts;
• Help you understand what a payment arrangement would mean for your budget;
• Explain how a consumer proposal or bankruptcy may affect government debt; and
• Help you identify a realistic path forward without judgment.

Contact LCTaylor for a free, no-obligation consultation.  Don’t let uncertainty overwhelm you—take the first step toward financial clarity today.

Updated Sept. 18, 2026