How does Employment Insurance work in Canada?

How does Employment Insurance work in Canada?

Employment insurance (EI) is financial support to an unemployed person in case of a job loss. The benefits of this program last a period of time and have certain criteria. What then is EI, how does it work? In this post, we will cover what you need to know about Employment Insurance in Canada. 

What is Employment Insurance  (EI) Program?

The Employment Insurance (EI) program provides temporary financial support to eligible unemployed workers in Canada. Eligible workers usually include those who took some time off work for some circumstances including:

  • Pregnancy
  • Illness
  • Taking care of a newborn or newly adopted child
  • Providing care of a critically ill or injured person
  • Taking care of a family member who is seriously ill with a significant risk of death

Eligibility Criteria

Who is eligible for new EI benefits?

The Employment and Social Development arm of the government lists the following as the eligibility criteria for EI:

  1. lost your job through no fault of your own, i.e, without cause
  2. employed in insurable employment 
  3. you have been without a job and pay for at least 7 consecutive days in the last 52 weeks. 
  4. the applicant worked for the required number of insurable employment hours in the last 52 weeks or since the start of your last EI claim
  5. the applicant has been actively looking for work but have been unable to find one
Ineligibility Criteria for EI

An applicant may not be eligible for the program benefits of EI under the following conditions: 

  • voluntarily leaving a job without a just reason
  • employment was terminated due to misconduct
  • the applicant is unemployed due to their involvement in labour disputes
How many hours of work do I need to qualify for employment insurance?

700 or more insurable hours within a qualifying period is part of the requirements to qualify for employment insurance (EI) benefits. However, if you have between 420 and 700 insurable hours, you might qualify as well. This is because, the higher the rate of unemployment in your area, the fewer the hours you will need.

What are Insurable Hours?

Insurable hours refers to a predetermined number of hours a person must work in a job that is considered insurable employment. Insurable employment in general terms refers to you working under the authority of an employer in Canada that controls your hours of work, wages, etc. You can visit the Canada Revenue Agency’s website to check if your employment is insurable.

It is important to note that from September 26, 2021, to September 24, 2022, you only need to have worked 420 hours during your qualifying period, regardless of the unemployment rate in your area.

There are various factors that determine your qualifying period:

  • the qualifying period is typically 52 weeks before EI is paid
  • Your qualifying period could be shorter if you already received EI in the last year
  • It could be longer if you were not able to work for part of the year for reasons like pregnancy, etc

How much does EI usually Pay?

The amount paid varies per individual. Generally, the basic rate for calculating the benefits is 55% of an individual’s average insurable weekly earnings up to a maximum amount. It is best to check with Service Canada to find out the amount of your benefit.

How and when to apply for EI Benefits in Canada

To receive employment insurance benefits, you must apply either online or in-person at your local Service Canada office to determine your eligibility to receive benefits. It is best that you apply for EI benefits as soon as you stopped working even if your employer has not issued your Record of Employment (ROE). This way, you would not lose part or all of your benefits.

How long does EI last?

You can get EI benefits from 14 weeks up to a maximum of 45 weeks. This depends on the number of hours you worked in insurable employment during your qualifying period and the unemployment rate in your region. Note that you will stop receiving your EI benefits if you stop filing your bi-weekly report or request a termination of your claim to file another one.

Can I collect employment insurance while working?

Your EI benefits will be reduced or even stopped if a person decides to work while collecting employment insurance (EI). Also, you must report any earnings you make while collecting EI. Visit Service Canada’s website to see how this works. 

WIll my El be Paid Weekly?

Employment Insurance pay goes out every two weeks. Bi-weekly reports should be filled to prove your eligibility and receive benefits to which you will be entitled. Failure to do this will mean a loss of benefits.

Can I collect employment insurance while working? 

IIf a person decides to work while collecting EI, the benefits will be reduced by the amount earned. You are also required to report any money you earn from a job, no matter how small you earn. As at the point of writing this post, if you earn money while receiving EI, you can keep up to 90% of your previous weekly earnings.

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