Money: What's Employment Insurance All About?

By Veronica Leonard

Look closely at the deductions on your pay stub and you will see an amount for EI/a-e.

E.I is for Employment Insurance (French: assurance-emploi). a national insurance program that gives you a temporary income if you lose your job through no fault of your own. $1.78 on every $100 you earn is paid into EI to a maximum of $786.76 on an annual income of $44,200. EI is not deducted on money earned above that amount.

Employers have to pay EI $2.49 on every $100 they pay you. To get around this, some may ask you to work as a private contractor. This is often called “working under the table.” Avoid this kind of work if you can, as you have no financial safety net against illness or loss of work. Work like taxi driving, commissioned sales or running your own business is also considered self employment and you do not pay into employment insurance.

Service Canada’s website www.servicecanada.gc.ca has information about Employment Insurance for regular benefits and about special benefits for Canadian workers who are sick, pregnant, caring for a newborn or adopted child or a dying relative.

You should apply for EI as soon as you stop work. It takes about four weeks for an EI claim to process and you will never be paid for the first two weeks of your claim. It is called “the waiting period” and is like the deductable on your car insurance.

New applicants for Employment Insurance must have a total of 910 hours from one or more jobs in the past twelve months. Only 600 hours are needed for a sick or maternity / parental claim. If you do not have the 910 hours, EI will want to look at all your records of employment (ROEs) in the past 24 months to see if you still might qualify.

Employment Insurance pays 55% of your average weekly earnings over the previous six months. If you receive the monthly Child Tax Credit, you may receive a family supplement that takes your EI payment as high as 80% of your weekly income. The maximum EI benefit this year is $468 weekly. The number of weeks of payments you will receive will depend on how long you worked and the rate of unemployment in your area. An EI claim stays in the system for 52 weeks or until all the money an applicant is entitled to is gone, whichever comes first. People who work in construction or seasonal jobs often open and close their claim between jobs. When their claim runs out, they file a new one based on their more recent work. For people who often rely on EI, they only need between 425 to 700 hours to qualify for their next claim, depending on the regional unemployment rate.

EI is not a paid vacation. You must be ready willing and able to work and actively job hunting. You cannot attend a training program of more than ten hours a week unless it’s part of an approved action plan. You can work while receiving EI but you must file a report every two weeks about the number of hours you worked and your gross pay. EI lets you earn extra money each week before your EI payment is reduced. Remember that the hours of all the work you do while on EI will count towards your next EI claim.

As a rule, you cannot claim EI if you are out of the country. You may be allowed a week or two for job interviews, family illness or death but these should be discussed with the EI call centre ahead of time and be clearly documented with letters, death certificates etc. If you must be out of the country longer than allowed, ask EI to close your claim and reopen it when you return.

Most EI is paid to people who are “laid off” because of plant shut downs, seasonal work, or they are not suitable for the job. Your home insurance will not pay if you set fire to your house; nor does EI pay you if you quit your job without just cause or were fired for misconduct. However there are times when EI is allowed even when there is a quit or dismissal.

If things are going wrong at work, keep a written record of what is happening, speak to your employer or union about your concerns, and keep looking for other better jobs in your free time. Leaving one job for a better job, or leaving a job to follow a spouse whose job has moved are some of the reasons allowed. If your job is making you mentally or physically ill, your doctor may give you a letter saying you should leave this job. EI accepts this. Even if you are fired from your job, you may still get EI if it was not deliberate misconduct. Always apply for EI when you stop working, explain on your application what happened and let the EI agent decide.

If your claim is not allowed and you feel the ruling is unfair, do not be afraid to appeal. Often a decision is changed when more people have a chance to consider your case. There is no cost to appeal and it can be done in person or by phone and you can have an interpreter speak for you. Many appeals are won.

Even if your EI claim is not allowed for regular benefits, you can still collect special benefits for sickness, maternity, parental or compassionate care if the need arises. You will also be eligible to go to your local Employment Centre and be considered for employment assistance programs which can include training, self employment assistance or job placement if you are unable to find another job. You can access these programs for three years even if your claim for regular benefits was not allowed or you left work on a sick claim and for five years if you leave work on a maternity claim.