Canada Emergency Student Benefit (CESB)

This fall, more students may be stressed by debt and one of the reasons why is the repayment of the CESB.  In 2020, students could qualify for the Canada Emergency Student Benefit of $1,250 for a 4 week period for a maximum of 16 weeks.  An extra $750  for a total of $2000 per month was available if the applicant had a disability or dependants.  But now there is a cash flow problem for some students:

The Backdrop:  The federal government has been asking students who received the payments in error or because they were ineligible to repay the CESB.

Broadly, three categories of students qualified:  those enrolled in a post-secondary educational program, those who graduated no earlier than December 31, 2019 and those who completed high school in 2020 and applied for a post-secondary program that began before February 1, 2021.  If these conditions were not satisfied, CESB is repayable.  

The good news?  There is no interest charged on the outstanding about of pandemic supports.

Also, when a repayment is made, a  positive tax consequence occurs. That’s because the CESB was a taxable benefit when received.  When it is repaid, a deduction can be taken on the tax return.  That means a bigger refund next spring.

Bottom Line.  Always look to your tax return for tax relief even when you are in student debt.