The Canada Revenue Agency (CRA) was careless, to some extent, during the early implementation of the original Canada Emergency Response Benefit (CERB) in mid-March 2020. The tax agency dispensed the taxable benefit as fast as it could and skipped scrutiny of CERB applications.
Today, and four months running, the CRA is more strict and vigilant. First, the CERB payment is $12,000 instead of $8,000, following the program’s extension. Second, some provinces are reopening, and people should be returning to work if possible.
If you’re applying for CERB or availing of the extension, make sure to follow the three-step checklist. Otherwise, the CRA can take away the money from you due to inadvertent payment.
Did you file one application only?
The rule is simple. A claimant must apply with either Service Canada or the CRA, not both. The federal government wants to avoid double payment, and the CRA will surely retrieve the overpayment or demand repayment.
Are you double-dipping?
The CRA prohibits double-dipping. You can’t receive CERB while receiving more than $1,000 salary per month simultaneously. The $2,000 monthly CERB is only for the unemployed. Be honest and don’t attempt to double-dip.
Are you a legitimate claimant?
The CRA is clamping down on those who don’t qualify for the program. People can report abuse or misuse of CERB through the “Leads Program.” Harsh penalties await people guilty of misrepresentation.
The federal government aid is temporary with a pre-determined duration. You should set your sights on creating a CERB-like payment that is inexhaustible. If you have cash available, consider dividend-investing.
Now is an excellent time to start because blue-chip stocks like Toronto-Dominion Bank (TSX:TD)(NYSE:TD) are trading at discounted prices. You can own shares of the second-largest bank in Canada for $60.38. In return, you partake of the stock’s 5.31% dividend. The dividend payments are safe, considering the low payout ratio of 52.81%.
Toronto Dominion Bank is the dream investment of income investors and retirees. Paying dividends is in the DNA of this $108.85 billion banking giant. Its 163-year dividend track record supports TD’s image as a wealth-builder. A seed capital of $20,000 will produce a quarterly income of $265.50. The payouts can be for life.
The bank is again facing strong headwinds, just as it did in 2008. Expect revenue and earnings to be lower in the short-term. However, the bank will pay you high dividends to wait for its return to steady growth post-pandemic. Toronto Dominion is best for people with long-term financial goals.
The Senate Finance committee wants to know Prime Minister Trudeau’s plans after CERB ends in the fall. Meanwhile, the CRA won’t take your CERB if you filed a single application, not double-dipping, and an eligible claimant in need of the pandemic money.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.