CRA preparing to take legal action against people who received pandemic benefits while ineligible

The Canada Revenue Agency (CRA) says it’s prepared to take legal action against people who erroneously accepted pandemic benefits but are financially capable of paying the government back. 

According to a statement issued by the CRA, individuals “who have not responded or co-operated and have been determined to have the financial capacity to pay” will start getting legal warnings next month.

The CRA says that if the legal warnings do not prompt people to cooperate with the government, “legal measures could be taken to recover monies owed.”

In May, the CRA told CBC News that at the end of last year, it had recovered roughly $1.8 billion in erroneous pandemic benefit payments. The CRA was asked for an updated total but did not provide one to CBC News.  

On Thursday, the agency said it is still trying to recover an additional $9.53 billion in overpayments involving five different pandemic benefits.

The CRA said that its efforts to recover erroneous benefits began in 2020 and will continue until 2025. 

The department says people found ineligible for the benefits they received were contacted and were either given a chance to provide evidence that they were eligible or were told how much they owe.

In May 2022, the CRA took the additional step of sending out notices informing people there was now a debt on their CRA accounts.

The agency followed that up in February 2023 by sending letters to people the department says were told they had received a benefit overpayment and had made no effort to pay those benefits back.

The government has also been withholding tax refunds and other benefits in an effort to recoup money sent to individuals it says were ineligible for the funds they received.

Debts reversed for 27,000 people

The CRA says it has a variety of repayment plans and is willing to work with Canadians who agree to repay their debt but have limited means.

Canadians who have been told by the government that their eligibility for benefits received has been revoked can ask for two reviews of their case.

After that point, their only recourse is through the courts. Many Canadians have taken the government to court to plead their case.

In May, the federal government cancelled at least $246 million in debts for thousands of Canadians it initially claimed had received pandemic benefits for which they weren’t eligible.

The CRA told CBC News that as of April, it has reversed the debts of roughly 27,000 individuals who originally were deemed ineligible but later had their eligibility verified.