“Legal measures are only taken when there is no co-operation from an individual with ability to repay the debt,” notes a June 27 news release. “It’s important to note there are no penalties and interest on emergency benefit overpayment debts.”
The warning also applies to those who were overpaid other pandemic benefits, such as the Canada Recovery Benefit (CRB) and the Canada Worker Lockdown Benefit (CWLB).
The release advises those who cannot reimburse their benefit overpayments to contact the CRA to make suitable payment arrangements based on their financial circumstances.
According to the release, the CRA began sending out collection letters to unco-operative recipients in February 2023.
Before taking legal action, CRA protocol involves making up to three attempts to provide a verbal warning by phone or sending one warning letter. A legal warning is valid for 180 days.
Absent payment arrangements, CRA debt collection can potentially involve wage garnishment, tax refund offsets or, potentially, even seizing assets.
Hundreds of Canadian taxpayers have taken their disputes with the CRA over the repayment of pandemic benefits to Federal Court.
In May, the CRA conceded that it has reversed the debts of about 27,000 taxpayers that it erroneously deemed ineligible to receive pandemic benefits — only to later verify their eligibility. The amount of debt cancelled has totalled about $246 million.
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