Young Canadians living in high-income households eligible for nearly $12 billion in CERB payments

Distribution of CERB: Estimating the Number of Eligible Young People Living with Parents

Summary

• The Canada Emergency Response Benefit (CERB) is a flat, taxable $2,000 monthly benefit provided to eligible Canadians. The initial 16-week program was estimated to cost $53.4 billion after cost recoveries from taxation.
• The program was recently extended by an additional 8 weeks. It is now estimated to cost $71.3 billion after cost recoveries.
• To gauge the degree to which CERB benefits are potentially distributed to Canadians with questionable need, this analysis estimates the number of CERB-eligible dependent children aged 15 to 24 earning between $5,000 and $24,000 who are living with their parents in households with total incomes of $80,000 and $100,000 respectively. Many of these potential recipients could have seen their average monthly income increase after receiving CERB.
• There are an estimated 400,000 Canadians with earnings in 2019 of between $5,000 and $12,000 attending school, and living in a household with at least $100,000 in total household income in 2019. The total potential cost of this group to CERB is $4.8 billion (before cost recoveries) based on a 24-week benefit period (all cost estimates are presented based on the new 24-week period and before cost recoveries). This group would have experienced an increase in their average monthly earnings from the receipt of CERB compared to their 2019 earnings.
• Another 287,300 Canadians with the same characteristics earned between $12,001 and $24,000 in 2019. The total potential cost of this group to CERB is $3.4 billion. This group would have experienced no decline in their average monthly earnings and would likely have seen an increase.
• Add in Canadians under the age of 18 with the same characteristics to the two previous groups—with earnings between $5,000 and $24,000—and the number of potential CERB recipients increases to 855,500 with a potential upper-bound cost of $10.3 billion.
• Finally, if Canadians not attending school are added to the groups already noted, the number of potential CERB recipients increases to 985,200 with a potential cost of $11.8 billion.
• A second analysis lowered the household income threshold to $80,000. The total number of eligible dependent children increases to 1.1 million with a potential cost of $13.3 billion.