Employment Insurance Changes 2016
The Government has made several changes to the Employment Insurance Act through Budget 2016, aimed at improving the coverage and services available to claimants.
Below we have outlined the changes that are most likely to affect your employees, including the reduction of waiting periods for EI and the ability to work during parental or compassion leave.
There are other changes to the act, and more details to the information below listed on the Service Canada website. For further information, click here.
Reducing the two-week waiting period to one week
The Employment Insurance (EI) waiting period is a period of time that must be served before a claimant can begin to receive EI benefits. It has been set at two weeks since 1971. Shortening the waiting period is expected to ease the financial strain for EI claimants at the front-end of a claim and will put an additional $650 million in the pockets of Canadians annually beginning next year.
The reduction of the waiting period applies to regular, fishing and special benefits. It is worth noting that the number of weeks of EI benefit entitlement will not change. Similarly, there are no plans to change the timeframes in which employers are required to issue records of employment.
It was announced in Budget 2016 that this change would become effective January 1, 2017.
Eliminating new entrant and re-entrant rules
The Government amended the rules to eliminate the higher EI eligibility requirements that restricted access for new entrants and re-entrants to the labour market. Under the previous rules, new entrants and re-entrants to the labour market had to accumulate at least 910 hours of insurable employment before being eligible for EI regular benefits.
As of July 3, 2016, new entrants and re-entrants now face the same eligibility requirements as other claimants in the region where they live (between 420 hours to 700 hours of insurable employment).
Working while on claim
The Employment Insurance (EI) Working While on Claim pilot project is a way to help people stay connected to the labour market and earn some additional income while on claim.
The pilot allows employees to keep receiving a portion of theirr EI benefits along with all earnings from their job. From August 7, 2016 until August 11, 2018 it offers you a choice of two options to better support employees.
The pilot applies to any EI claimant who earns money while collecting one of the following types of EI benefits:
- Regular benefits
- Fishing benefits
- Parental benefits
- Compassionate care benefits
- Benefits for parents of critically ill children
Facts about the Working while on claim pilot project
If employees are collecting regular, fishing, parental, compassionate care or parents of critically ill children benefits, and have a chance to pick up part time or occasional work, they have a choice of two options to better support the work they do while on claim.
Under the “default rule,” they keep 50 cents of EI benefits for every dollar they earn in wages, up to a maximum of 90% of your previous weekly earnings (or, roughly four and a half days of work). Above this cap, benefits are reduced dollar-for-dollar. The “default rule” will automatically apply to their claim.
Otherwise, they can choose the “optional rule.” It allows them to keep the equivalent of up to roughly one day’s work (defined as $75 or 40% of the benefit rate, whichever is greater) without any deduction from their benefits. Any amount earned above the equivalent of roughly one day’s work will be deducted dollar-for-dollar from their benefits.
Employees are strongly encouraged to make the choice near the end of their claim. At this point, more complete information about their specific circumstances and work pattern is available, making it easier to know which option would benefit them the most.