Employment Insurance (EI) is an unemployment insurance program in Canada that allows individuals who have recently lost a job to receive temporary financial assistance. Employment insurance can also be extended to individuals who cannot work because of illness or who are caring for a young child or a seriously ill family member. In addition to financial assistance, the program assists the unemployed with job search services.
The Employment Insurance Act replaced the Unemployment Insurance Act of 1996. The updated scheme was designed to link unemployment benefits with wages and to reduce penalties for those who could only find temporary work. To qualify for benefits, individuals must work a certain number of hours, and the length of time for which benefits are provided depends on an individual’s geographic region’s unemployment rate.
Since 1990, there has been no government contribution to this fund. Therefore, the amount a person receives and how long they can stay on EI varies with their previous salary, how long they were working, and the unemployment rate in their area.
The Canada Employment Insurance Commission (CEIC) plays a leadership role in overseeing the EI program. The CEIC is also responsible for setting the annual EI premium rate.
Employment Insurance Benefits
The Employment Insurance (EI) program provides temporary income support to unemployed workers while looking for employment or upgrading their skills. The EI program also offers unique benefits to workers who take time off work due to specific life events: illness, pregnancy, caring for a newborn or newly adopted child, a critically ill or injured person, or a family member who is seriously ill with a significant risk of death.
Workers receive EI benefits only if they have paid premiums in the past year and meet qualifying and entitlement conditions. In addition, self-employed workers may participate in EI and receive special benefits.
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The Canadian government offers a maximum of 15 weeks of EI maternity benefits. The EI maternity benefits are offered to biological mothers, including surrogate mothers, who cannot work because they are pregnant or have recently given birth and parents of a newly adopted child.
EI sickness assistance provides benefits to people who cannot work because of sickness, injury, or quarantine. Applicants can receive up to a maximum of 15 weeks of EI sickness benefits. Employment Insurance (EI) sickness benefits can provide you with up to 15 weeks of financial assistance if you cannot work for medical reasons. You could receive 55% of your earnings up to a maximum of $595 a week.
You must get a medical certificate to show that you’re unable to work for medical reasons. Medical reasons include illness, injury, quarantine or any medical condition that prevents you from working.
EI also offers compassionate care benefits, which are paid to people who have to be away from work temporarily to provide care or support to a family member or who is gravely ill themselves with a significant risk of death. A maximum of 26 weeks of compassionate care benefits may be paid to eligible people.
Employment Insurance (EI) provides regular benefits to individuals who lose their jobs through no fault of their own. For instance, if you lose your job due to a shortage of work, seasonal or mass lay-offs and are available for and able to work but can’t find a job, you can be eligible for the EI benefits.
Employment benefits in Canada include pensions and benefits for housing, training, education, family leave, and people with disabilities. Benefits can be paid as early as 12 weeks before the expected date of birth and can end as late as 17 weeks after the actual date of delivery. The weekly benefit rate is 55% of the claimant’s average weekly insurable earnings up to a maximum amount.
Employment Insurance Benefits for Self-employed People
Employment Insurance also has a program designed for self-employed people. If you run your own business or control more than 40% of your corporation’s voting shares, this program can provide you with access to special benefits as early as 12 months after registering your business. When you need to take time away from your business to care for yourself, your children or other family members, you could receive financial support of up to 55% of your earnings, up to a maximum amount. In 2021, the maximum amount is $595 per week.
If you’re a fisher, barber or hairdresser, or drive a taxi or other passenger vehicle, you don’t need to register for the self-employed program. Instead, people in these professions should apply for EI benefits as an employee.
Employment Insurance for workers and residents outside Canada
People who work outside Canada may be entitled to benefits under Canada’s Employment Insurance (EI) program. People who work outside Canada for a Canadian company or the Canadian government are usually covered by EI.
Eligibility for Employment Insurance
To receive Canadian Employment Insurance benefits when you reside or work outside Canada, you must meet the following conditions:
Your last employment was in Canada, but you now reside in the United States: You may be eligible for American Unemployment Insurance benefits if your previous employment was in the United States and now live in Canada. However, if you also had previous jobs in Canada, you may be able to file a claim for Canadian Employment Insurance benefits instead. As a result, you may be able to receive benefits from either Canada or the United States, but you cannot receive benefits from both countries at the same time.
Your permanent residence is in a country other than Canada or the United States: If you permanently reside in a country other than Canada or the United States, you may be eligible for maternity, parental, sickness or compassionate care, Family caregiver benefit for children or Family caregiver benefit for adults if you have worked in a job in your country of residence that is insurable under Canada’s Employment Insurance (EI) program.
You are a commuter (a resident of Canada or the U.S. who regularly crosses the Canada–U.S. border between your residence and workplace).
Canadian government and Armed Forces personnel posted in the United States: You may be entitled to regular, maternity, parental, sickness, compassionate care or family caregiver benefits if you or your dependents are posted in the United States and working for the Canadian government for the Armed Forces. Dependents include your spouse, unmarried children under 21, unmarried full-time students under 25 and unmarried disabled children
How much could you receive?
While it may be hard to accurately tell how much you will receive after your employment insurance application is processed, the basic rate for calculating EI benefits, for most people, is 55% of your average insurable weekly earnings, up to a maximum amount. As of January 1, 2018, the maximum yearly insurable earnings amount is $51,700. This means that you can receive a maximum amount of $547 per week.
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How benefits are calculated
Employment insurance benefits are calculated weekly based on your total insurable earnings before deductions during the “best weeks” in your qualifying period. Your qualifying period is the shorter 52 weeks immediately before the start date of your EI claim or the period since the start of a previous claim.
Your best weeks are the weeks that you earned the most money. In regions of Canada with the highest unemployment rates, the employment insurance benefits are calculated using the best 14 weeks; in regions of Canada with the lowest rates of unemployment, they often make use of the best 22 weeks. In the other areas, the number of weeks used to calculate benefits will be somewhere between 14 and 22, depending on the unemployment rate in those regions.
The amount of weekly benefits is calculated as follows:
Calculate your total earnings for the required number of best weeks based on the information you provide and your employment record.
Determine the divisor (number of best weeks) that corresponds to your regional rate of unemployment.
Divide your total earnings for your best weeks by the corresponding divisor in Table 2 below to obtain an average.
Then, multiply the result by 55% to obtain the number of your weekly benefits.
The divisor is used to calculate benefits based on the regional rate of unemployment
For how long will I receive EI benefits?
You may receive EI regular benefits for a period ranging from 14 to 45 weeks. The number of weeks you may receive benefits depends on the unemployment rate in your region and on the number of hours of insurable employment that you accumulated during your qualifying period, which is usually the last 52 weeks before the start date of your claim.
Generally, always apply for EI benefits as soon as you stop working. You can apply for benefits even if you have not yet received your Record of Employment (ROE). However, if you delay filing your claim for benefits for more than four weeks after your last day of work, you may you’re your employment insurance benefits.
Bottomline
Because your job is important, therefore you need to protect it. Ensure you are eligible so that when the unforeseen happens, you are covered.