You received CERB and shouldn’t have. Now you have to repay it. What are your options?

Some 8.9 million Canadians received the Canada Emergency Response Benefit (CERB) during the pandemic, and thousands of them are now finding out they didn’t qualify for some or all of it.

Now, of course, they have to pay it back, with the Canada Revenue Agency sending repayment notices to those it has determined either weren’t eligible at all or received too much.

If you can park how annoyed you are to find out you have to pay the money back, you really have no choice but to try to be strategic about how you’re going to do it, especially if you really, truly can’t afford to do so.

Get clear on the amount

Owing money to the government is extremely stressful, but burying your head in the sand will only make the situation worse. Your first step is to get clear on exactly how much you owe so that you can make a plan. Next, make a list of all of your accounts (assets first), and how much money is in each. Total these. At the same time, list your debts and what’s owed on each. Total these.

Now that you can clearly see your full financial situation, you can quickly determine if you do or don’t have enough money across your accounts to pay back the CERB you owe all at once, or if you’re going to need to turn to other strategies. Keep reading for those.

Repayment plans

The good news (if there can be any in this situation) is that if you can’t afford to pay the full bill at once, you can set up a repayment plan with the Canada Revenue Agency (CRA). You’ll need to contact the CRA directly to work out the details. If you go with this option, you’ll want to work the payment into your budget so that you’re not accumulating more debt in the process. There are tax implications to be aware of to the timing of your repayments as well.

Raising money to pay the debt

Are you motivated to clear the balance fast? You’re a good candidate to try one of these five money-raising strategies.
Go room by room and purge. Sell anything that has value using a second-hand website. The key to getting top dollar is to take really clear and well-lit pictures of the item, clean it up nicely, and price it in line with similar items available for sale online. Having a hard time deciding what to get rid of? If you haven’t used it recently or if it has a negative memory associated with it, it’s got to go. Also, if it is simply a very valuable item, like a gaming device, sell it.

Collect money that’s owed to you. Have you lent money to a friend or family member? It’s time to ask for it back. File your benefit claims. Don’t let these sit. Get organized and submit eligible claims to your insurance company for reimbursement. If you are a business owner and someone is behind on paying you, get on top of your receivables.

Do some extra work. If you have the option to take extra shifts or book additional work into your schedule, do it. It might be the perfect time to start your side hustle, too. It doesn’t matter if it’s yard cleanup, dog walking or consulting. Every little bit will count.

DIY everything you possibly can. Nails, cleaning, delivery fees. Manage all of this yourself and save the money. Cash in your loyalty points for essential purchases like groceries, and put the savings toward your CERB debt.

Go on a spending detox. This is amazing for your money mindset and also for your wallet. Hold off on all non-essential purchases for between seven and 30 days. If you were a coffee buyer, put this money toward your CERB balance. Pause on any non-essential shopping and hold off on booking vacations.

Whatever you do, do not take on any more debt!

In way too deep?

If you simply cannot afford to pay your CERB balance back, and you’ve tried the suggestions above, you might have a case of too much debt. You may benefit from speaking to a licensed insolvency trustee who can help you understand if you would be a good candidate for a consumer proposal (the step before bankruptcy).

Once you have your plan in place to pay back your CERB debt, you’re going to feel not just financially but mentally stronger, because you tackled what felt like an impossible situation.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.