Canada Revenue Agency Intensifies Efforts to Recover Pandemic Benefit Overpayments

The Canada Revenue Agency (CRA) is stepping up its initiatives to reclaim overpayments of pandemic-related benefits. Starting in July, the agency announced on Thursday that it will begin issuing legal warnings and may take steps to recover overpayments from all COVID-19 programs, including the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), and the Canada Worker Lockdown Benefit.

The CRA’s recovery actions could involve garnishing wages or withdrawing funds directly from bank accounts. However, these measures will only be applied to individuals who have failed to respond or cooperate and are financially capable of repaying the debt.

“Our primary goal is to encourage individuals to contact us so we can work together to find the best way to resolve their debt, ensuring a fair and manageable process for everyone,” said CRA spokeswoman Sylvie Branch in an email to CTV News.

The CRA emphasized its commitment to supporting Canadians who are unable to repay their debt, encouraging those individuals to reach out and develop a repayment plan.

During the rollout of pandemic relief payments, over $200 billion was distributed to individuals and businesses on a pay-now-ask-questions-later basis. The CRA has since determined that many recipients were ineligible for the payments and has been working diligently to recover the funds.

As of now, the CRA is seeking to recover approximately $9.53 billion from individuals, including $5.41 billion from CERB, $2.67 billion from CRB, and $1.25 billion from the Canada Recovery Caregiving Benefit. The agency began its recovery efforts in May 2022 by sending letters encouraging voluntary repayments.

Last year, the CRA escalated its efforts by sending collection letters and making phone calls to reach individuals. It also started a process called “offsetting,” where funds from tax refunds and certain benefits are automatically used to settle debts owed to the government.

These recovery efforts have led to more than 1,000 disputes in Federal Court between claimants and the CRA as individuals contest the charges.

Interestingly, the bulk of unwarranted pandemic handouts were given to businesses rather than individuals. The CRA remains focused on reclaiming these funds to ensure fairness and accountability in the distribution of government support.

As the CRA ramps up its recovery efforts, it underscores the importance of communication and cooperation from the public to resolve outstanding debts in a fair and manageable manner.