CEWS Changes and Disability Benefit Passed into Law

Evelyn Jacks, Beth Graddon, Walter Harder

On Monday, July 27 a couple of highly anticipated pandemic support measures were passed into law: the changes to the Canada Emergency Wage Subsidy (CEWS) for Period 5 forward and the one-time payments to disabled persons. This latter provision extended the tax-free disability payment to two categories of recipients who will not require a Disability Tax Credit to receive it.

The CEWS Payments bring increased eligibility to business owners who have less than a 30% decrease in their revenues; along with an extension to the program to December 19, 2020. The details surrounding this are complex and we’ve provided a compressive breakdown in our July 20 Special CEWS Report. If you did not receive this special report, it’s an invaluable resource available for download when you subscribe to receive Knowledge Bureau Report to your inbox.

The Special Disability Payments.  The other big news is that the legislation expands the scope of COVID-19 related assistance to disabled Canadians.

Previously, the $600 payment was to be made to taxpayers who qualified to claim the disability amount on their tax returns.  This legislation expands the scope of this payment to include all taxpayers who are receiving CPP/QPP disability benefits as well as those receiving disability supports from Veterans Affairs Canada. The payment will be made automatically to these people; there is no need to further apply. 

An important fact – and one where tax, bookkeeping and financial advisors can add value this summer - is that eligible people who would qualify for the Disability Tax Credit but have not yet applied for it by filing form T2201 Disability Tax Credit Certificate, should do so immediately.  They may be eligible if they apply before September 25.  Be sure to contact clients that should be applying as soon as possible.

The government estimates that about 1.7 million Canadians will be eligible to receive this payment, including 1.2 million who are eligible for the disability amount.  The government has stated that they expect to issue the payments beginning this fall.  For disabled seniors, the $600 amount will be reduced by the $300 amount recieived in June because the disabled person was eligible for Old Age Security and the $200 payment recieved because the disabled person was recieving the Guaranteed Income Supplement.

For more information on pandemic benefit program updates and the financial fallout, including the complex auditing process that still lies ahead, attend to the September 30 Virtual CE Summit.