It was written in the sky that a large number of beneficiaries of the generous ECP (Canadian Emergency Benefit) would one fine morning receive a letter from Revenue Canada urging them to repay the thousands of dollars received on the pretext that they did not. are ultimately not eligible.
Gaston M. is one of those unfortunate beneficiaries to whom the Collections and Audit Directorate of Revenue Canada is claiming the reimbursement of the $ 14,000 of PCU received supposedly in error according to the eligibility criteria that the tax authorities have just sent him .
The problem ? Imagine that the government of Justin Trudeau notably modified the eligibility criteria which allowed self-employed workers, like Gaston M., to benefit from the PKU.
When the PKU was launched last spring, it was written in black and white that the delivery of the PKU is available to workers who, after ceasing to work due to COVID-19, “have earned income from employment or self-employment income of at least $ 5,000 in 2019 or in the 12 months preceding the date of their application ”.
Let’s come back to Gaston M. He had indeed earned “a self-employment income of at least $ 5,000”, as required last spring in the eligibility requirements for the PKU.
But in the collection letter just sent to it by Revenue Canada, we no longer speak of “self-employment income of at least $ 5,000” but rather of “net income from self-employment”.
Gaston M., for example, earned gross self-employment income of some $ 8,250 in 2019, which was reported on line 13499 of his federal income tax return. But after deductions allowed for self-employment, he reported net income less than $ 5,000 on line 13500 of the income tax return.
THE ARC LETTER
In the letter that the Canada Revenue Agency (CRA) sent him on November 26, “Subject: Eligibility for the Canada Emergency Benefit (CEP)”, Gaston M. was told the following facts:
According to our records, you have received one or more payments for the Canada Emergency Benefit (CEP).
Based on the records currently available to us, we are unable to confirm that you meet the criteria.
If you do not meet the minimum income criteria explained above (including $ 5,000 of net income from self-employment), it means that you are not eligible for the PKU, and must repay the payment (s) you you have received.
To better swallow the pill to the thousands of Gaston M. who were trapped by the modification of the eligibility criteria for self-employed workers for the PCU, the Canada Revenue Agency is going there gently to recover the PCU supposedly paid by fault.
“We understand that you may have made an honest mistake in requesting the ECP and want to reassure you that no penalties or interest will be applied to your ECPs payments. However, we encourage you to repay the PCU amounts before December 31, 2020 so that we do not send you a tax slip for the amount you received, ”says the Collections and Verification Branch of Revenue Canada in the letter sent to Gaston M.
REPLY BY GASTON M.
“In my case,” he says, “it’s not the penalties that bother me, but rather the very substance of the matter, which is really very simple: can the CRA (Canada Revenue Agency) change the rules? rules of the game, once the game has been fully played and finished? “
In my opinion, it is fiscally unfair to change the eligibility criteria on the income of self-employed workers.
The government of Justin Trudeau must order Revenue Canada to return to the initial eligibility criteria of $ 5,000 of “self-employment income” and not “net income from self-employment”.
Failing that, I invite the Gaston M. of the PCU to bring a class action against the Trudeau government.