Quantifying Employment Insurance Benefits (8:VI)
A. Benefit Rate
The benefit rate is set out in s 14 of the EI Act. It is:
- 55% of the worker’s weekly insurable earnings (see next section)
- If (1) the claimant or the spouse of the claimant has dependants and (2) the benefit rate of 55 percent amounts to less than $225 a week or the family income is less than $25,921, then the claimant may also be entitled to a family supplement.
In 2015, the current ceiling for the maximum weekly benefits is $524 per week. Always check Service Canada’s “Employment Insurance Regular Benefits” webpage to ensure this information is up-to-date at http://www.servicecanada.gc.ca/eng/sc/ei/sew/weekly_benefits.shtml. The maximum yearly insurable amount is currently 39,000, according to s4 of the EI Act.
B. Weekly Insurable Earnings
A claimant’s weekly insurable earnings are their insurable earnings in the calculation period divided by the number of weeks in the calculation period.
1. The Calculation Period
The calculation period is the number of weeks, consecutive or not, determined based on the applicable regional rate of unemployment as below, in which the claimant received the highest insurable earnings.
| Regional Rate of Unemployment | Number of Weeks |
|---|---|
| not more than 6% | 22 |
| more than 6% but not more than 7% | 21 |
| more than 7% but not more than 8% | 20 |
| more than 8% but not more than 9% | 19 |
| more than 9% but not more than 10% | 18 |
| more than 10% but not more than 11% | 17 |
| more than 11% but not more than 12% | 16 |
| more than 12% but not more than 13% | 15 |
| more than 13% | 14 |
2. Insurable Earnings
Insurable earnings include:
- Insurable earnings from insurable employment including employment that has not ended
- Insurable earnings paid or payable to the claimant during the qualifying period by reason of lay-off or separation from employment, unless the lay-off or separation from employment occurred during the qualifying period.
C. Effect of Earnings
The benefit payable to a claimant may be reduced if the claimant has “earnings” during the benefit period. It may be possible both to work part-time and receive EI benefits at the same time, but all income must be reported on the report cards.
The Employment Insurance (EI) Working While on Claim pilot project is a way to help claimants stay connected with the labour market (EIR ss 77.95-77.96). The three-year pilot project began August 5,2012 and runs until August 1, 2015. The government’s 2015 budget proposes to extend this pilot project to August 2016. It applies to claimants earning money while collecting any of the following types of EI benefits:
- regular benefits
- fishing benefits
- parental benefits
- compassionate care benefits
As soon as a claimant completes the two-week EI waiting period, the pilot project will automatically apply to any money the claimant earns while the claimant is collecting EI benefits.
How it works
The Commission sets a threshold which is 90% of the claimant weekly insurable earnings. Below this threshold, for every dollar a claimant earns 50 cents will be deducted from their benefits. Above this threshold, a dollar of benefits will be deducted for every dollar earned.
Example from Service Canada Website:
Christine’s weekly insurable earnings are $800. Her earnings threshold would therefore be $720 ($800 x .90 = $720). If Christine is collecting EI benefits based on weekly insurable earnings of $800, the equivalent of 50% would be deducted from her earnings and EI benefits, until those earnings reach $720 (the earnings threshold). Any money Christine earns in addition to the $720 (the earnings threshold) will be deducted from her EI benefits dollar for dollar. Important reminders
If a claimant is receiving EI sickness benefits or EI maternity benefits, this pilot project does not apply. Any earnings the claimant has will continue to be deducted dollar for dollar from benefits. If the claimant works a full working week, the claimant will not receive any EI benefits, regardless of the amount the claimant earns.
The table below compares the previous method (ended on August 4, 2012) of calculating EI payments with the pilot-project method:
Comparison table of the previous pilot project and the new pilot project
| Previous method | New method |
|---|---|
| Weekly insurable earnings $600 | Weekly insurable earnings $600 |
| EI weekly benefit amount (55% of $600) $330 | EI weekly benefit amount (55% of $600) $330 |
| Gross earnings declared during a week while on EI benefits $450 | Gross earnings declared during a week while on EI benefits $450 |
| Earnings amount (40% of the benefit amount: $330 x .40 = $132) $132 | Earnings amount (50% of gross earnings: $450 x .50 = $225) $225 |
| Net EI benefit payment for that week ($330 + $132 – $450 = $12) $12 | Net EI benefit payment for that week ($330 + $225 – $450 = $105) $105 |
| Combined,earnings,and EI,benefits,($450,+ $12 = $462) $462 | Combined,earnings,and EI,benefits ($450 + $105 = $555) $555 |
What if the claimant works or lives outside Canada?
If the claimant is living in the United States and works in Canada, or if the claimant crossed the Canada–United States border between the claimant’s residence and workplace and the claimant is receiving EI benefits, this pilot project will apply. Visit the Employment Insurance and Workers and/or Residents outside Canada Web page for more information.
Choice between old and new formula
It is possible for a claimant to choose between either the previous or current formula (40% vs 50%) for calculating benefits, in case one is more advantageous to the claimant than the other (EIR s 77.96). The choice may be made after the benefit period starts, but must be made within 30 days of the last notification from the Commission in respect of one or more weeks of unemployment. No such choices may be made after August 1, 2015 under the regulations at the time of writing.
http://www.servicecanada.gc.ca/eng/ei/claimpilot/index.shtml
1. Earnings During the Waiting Period
All earnings during the waiting period are deducted dollar for dollar from the benefits payable in respect of the first three weeks for which benefits are otherwise payable. There is thus little incentive to work during the waiting period.
2. Earning of Sick Claimants
In contrast to regular claimants, all “earnings” are deducted, dollar for dollar, for claimants receiving sickness benefits – whether they are earned during the waiting period or afterward. (s 21(3)).
3. Earnings of Parental Claimants
Claimants receiving parental benefits are entitled to claim an exemption of earnings (See Section V.C: Effect of Earnings)
4. Earnings of Sick or Pregnant Claimants under Supplemental Employment Benefit Plans
Amounts paid to the claimant during periods of illness or pregnancy under an approved Supplemental Employment Benefit plan will not be deducted from EI benefits. These plans allow the employer to “top up” the regular EI benefits without reductions.
Supplemental Employment Benefit plans are designed to help employers retain and provide for employees in seasonal industries, or industries that experience hiring and layoff “surges”. These plans are authorized under s 37 of the EI Regulations. Individual Supplemental Employment Benefit plans must be approved by the Commission, which ensures that they meet the requirements of s 37(2).
An employee normally benefits from these plans while drawing EI benefits. If the worker is ineligible for EI, he or she may still qualify for Supplemental Employment Benefits that do not count as earnings for the purpose of determining waiting periods.