Canada Revenue Agency withholds tax refunds, other benefits of Canadians awaiting review of their eligibility status

Over one million notices have been sent to ineligible Canadians for receiving the Canada Emergency Response Benefit (CERB).

In its efforts to recover the money, CRA uses a process called offsetting to automatically use money from tax refunds and some benefits to settle a person’s debt with the government.

According to the CRA approximately $237 million of COVID-19 benefit debt has been collected through offsetting.

A number of Canadians eligible to receive CERB say that while waiting for a final decision, the CRA has withheld their tax refunds or other government benefits.

When asked how long these reviews typically take, the CRA said while a majority of cases are completed within a short timeframe, some files with more complex issues may take a longer time to review.

Earlier this month the Office of the Taxpayers’ Ombudsperson announced that it is monitoring complaints from people who have been receiving collection letters from the CRA despite having repaid the pandemic benefits to the government.

The federal government has 36 months, according to law, from the time benefits are paid to confirm if the payment was proper.

$4.6 billion in pandemic benefits was reported in December by the auditor general, including other programs such as the wage subsidy and the caregiver benefit which went to ineligible recipients.

(Reporting by Asha Bajaj)