CEWS REPAYMENT INFORMATION
The CEWS (or wage Subsidy) has been paid out by the Ford Motor Company. This will show up as a separate deposit in your account. You will receive a separate pay stub with a breakdown of your payment and all deductions. The CEWS will be identified on your pay stub as CDPA – this stands for COVID-Downtime-Paid-Absence. Ford has already recouped SUB monies paid to you during the qualifying period of CEWS (PP17-PP24), this shows up in the deductions section of the pay stub under the Description RECOVERY. So, there is no need to calculate or repay SUB to the Ford Motor Company.
You can now look to repay any monies you received from the government during this time; that is, the period from April 12 to June 7, 2020.
For some of you, your NET pay may be lower than the amount you have calculated to repay the government. This is because your pay will have EI, CPP and income taxes deducted on the lump sum amount for those payment weeks. However, you will be in a much better scenario at tax time. Your CPP and EI maximums are now much closer to being paid off for the year and your tax obligations at year’s end should be less.
In the big picture, you have been paid this money already, but you were not taxed correctly at the time. This means that at tax time you would have been in a bad position and likely having to pay a large sum back to the government in taxes (EI CLAWBACK etc). Now that you are not collecting government money for those weeks (PP17-PP24) as you are being paid by Ford Motor Company, you will have been taxed closer to the proper amount and those that received CERB will have a more accurate reflection of their income at the end of the year. Remember the CERB payments are a taxable benefit which means they pay you now and tax you later. The CERB income increases your gross income for the year and as such may put you into a higher tax bracket.
It is in your best interest to repay any monies received by EI or CERB with this CEWS payment. To calculate your repayment, review your records and add all amounts paid to you by EI or CERB during the weeks of April 12 (PP17) to the week ending June 6 (PP24). If you repay before the end of year you can pay the NET amount received. This will help to avoid any further tax complications in the future. If you wait to pay after the end of this year, the government will look to recoup the gross amount paid to you and taxes will be adjusted accordingly thereafter (it gets complicated).
We have the Ministry of Employment working to provide us with a step by step procedure to repay any CERB or EI. We anticipate this information will be ready by Friday. Once the information is received, we will post to this website to help guide you.
Paul Ivey Tim Batke
Unifor Benefit Representative Alternate