CRA offsetting method branded 'disgusting'
Canadians who may have unintentionally received pandemic benefits are permitted to request a review of their qualifying status, but they risk having their tax refunds or other benefits withheld.
The CRA has delivered over one million letters to Canadians it claims got pandemic benefits for which they weren't qualified. Through a procedure known as "offsetting," which utilizes money from tax refunds and other perks to settle a person's obligation with the government, the CRA has begun efforts to collect the money.
One can request a review from the government if they don't think they should have been granted the pandemic benefits they did. Many Canadians, however, claim that the CRA has held up their tax returns or other government benefits while they have been awaiting a final judgment.
"I think that what the government is doing to people, especially people like me, is disgusting," said Maxine Malamud of Montreal.
Despite being injured in an accident that has made it difficult for her to move, Malamud applied for the CERB when she was off work during the pandemic. She learned she owed the CRA $40,000 for CERB payments that the government claimed she got inadvertently when she applied for and was granted for the federal disability tax credit.
"I'm not going to see any of it. Not a penny of that, because of this money [that] they're claiming from me that they state I was not eligible to receive," Malamud said. "And that's not true. I was eligible."
If Malamud earned more than $5,000 in the 12 months before to the outbreak, she may request a reconsideration of her status, the CRA informed her when she contacted them. There hasn't been any development in her case since she gathered the necessary paperwork and submitted it to the organization, and the government is still withholding her tax benefits.
"It's sort of guilty until proven innocent as opposed to innocent until proven guilty," said Michael Thomson of Moncton, N.B.
Thomson said that his wife was informed that she owed $2,000 in CERB funds she had received the previous year. She contested her eligibility, but she has been waiting months for a judgment. This year, her tax refund was withheld by the CRA, according to Thomson.
Minister of National Revenue Diane Lebouthillier's office directed CBC News to the CRA when contacted for comment. The CRA responded when asked how long these reviews normally take that it depends on the circumstance.
"While a majority of cases are completed within a short timeframe, the CRA recognizes that some files are more complex than others and therefore may take longer to review," a CRA spokesperson said in an email.
The government's decision to withhold funds from those who are awaiting a review of their status, according to D.T. Cochrane of the advocacy organization Canadians for Tax Fairness, is a "dereliction of duty."
"Given the fact that people were acting in good faith, we need the government to similarly act in good faith," he said. "Especially since early signalling was that 'We are going to be as understanding as we can be about what is going on.'"
The Office of the Taxpayers' Ombudsperson is keeping an eye on complaints from persons who have paid back the government for pandemic benefits but are still getting collection letters from the CRA. The auditor general revealed in December that ineligible individuals received $4.6 billion in pandemic payments. The federal government must verify that a benefit payment was legitimate within 36 months of the time it was made, according to the legislation.
