What is Employment Insurance Anyway? A Primer on EI

May 21, 2019

If you have lost your job and need temporary income support, do you know what to do?

In Canada, you can apply for Employment Insurance (“EI”) for partial income replacement from the Federal government. To learn about the different types of EI and whether you would be eligible, read on.

The EI System

The legislation that governs EI is the Employment Insurance Act, which is administered by the Canadian Employment Insurance Commission (“CEIC”). The CEIC oversees the EI program, with the assistance of Employment and Social Development Canada (“ESDC”) and Service Canada.

The EI system is funded by premiums paid by both employers and employees, as well as contributions from the Federal government. One of its main purposes is to provide greater income security for Canadians.

Each year, CEIC provides a maximum insurable earnings and rate for the employer to calculate the amount of EI to deduct from their employees. The employer then deducts the EI premiums from the insurable earnings it pays its employees.

Service Canada’s role is to provide EI benefit payments and services and to support EI clients through each stage of the service delivery process. You can apply for EI at a Service Canada centre or online.

Eligibility

Eligibility for EI depends on where you live and what kind of benefit you apply for. Workers will only receive EI benefits if they have paid premiums in the past year and meet qualifying and entitlement conditions (some of which are described below).

EI payments are treated as taxable income so the applicable federal and provincial taxes will be deducted.

  1. Regular Benefits

EI provides regular benefits to individuals who lose their jobs through no fault of their own and are available for and able to work, but are unable to find a job. In this scenario, you can receive temporary income support for 14-45 weeks. Remember to always apply for EI benefits right when you stop working.

Do not delay filing a claim for benefits for over 4 weeks after your last day of work as there could be a reduction in the amount you receive or you may lose the benefits altogether. There is no requirement that you have received your Record of Employment to apply for EI, so do not let that be the reason for delay in filing your claim.

You may be entitled to regular benefits if you were employed in insurable employment and have been without work and without pay for at least 7 consecutive days in the last year (52 weeks). You also must have worked for the required number of insurable employment hours in the qualifying period.

The required number of insurable hours is generally between 420-700 hours, but varies depending on the unemployment rate in your area. You can look up different EI economic regions by entering a postal code here.

The qualifying period is the shorter of:

  • the 52-week period immediately before the start date of your claim; or
  • the period from the start of a previous benefit period to the start of your new benefit period, if you applied for benefits earlier and your application was approved in the last 52 weeks.

To prove your eligibility, you are also required to complete bi-weekly reports online or by telephone.

You may not be eligible for EI regular benefits if you were terminated for cause or quit your job without a good reason, have not worked for a certain amount of time, or have not paid into the EI program.

If you quit your job, to find out if you may still be entitled to EI, read our previous blog here.

  1. Special Benefits

EI also provides six types of special benefits to individuals which include sickness benefits, maternity and parental benefits, and caregiving benefits. If you are a self-employed worker, you may receive special benefits by entering into an agreement or registering with the CEIC.

Although each type of special benefit has its own requirements, to be entitled to any of the special benefits, you must show that you are losing 40% or more of your weekly income, and you have worked 600 hours or more during the last 52 weeks or since your last claim.

Working While on Claim Rules

If you start working while you are receiving EI benefits, you can continue to receive part of your EI benefits and you can keep all of your earnings from your job.

When you work and receive benefits at the same time, you must report your work earnings and hours for each week you work, in the week in which the work occurred.

If you earn money while receiving EI benefits, you can keep 50 cents of your benefits for every dollar you earn, up to 90% of your previous weekly earnings. Above this limit, your EI benefits are deducted dollar-for-dollar. You are not eligible to receive EI benefits if you work a full week, no matter what amount you earn. However, this will not reduce the total number of weeks payable on your claim.

If you receive other payments while receiving EI, some types of earnings will be deducted from your EI benefits, while other types of income have no impact on your EI benefits.

For more information on EI benefits and losing your job, contact one of our employment lawyers at MacLeod Law Firm at [email protected] or call 647-204-8107.

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