On August 20, 2020, the Government of Canada announced further details on their plan to transition from the Canada Emergency Response Benefit (CERB) to Employment Insurance (EI).

To aid Canadians in this transition, CERB has been extended by an additional four weeks to a maximum of 28 weeks.  Additionally, changes are being made to the existing EI program to be more simple, flexible and generous.  The new EI program will be effective September 27, 2020.

The federal government will also be freezing EI insurance premium rates at the 2020 level for two years to further help Canadian workers and businesses during a time of economic uncertainty and recovery.  For employees, EI premiums will be frozen at $1.58 per $100 of insurable earnings and for employers, EI premiums will remain at $2.21 per $100 of insurable earnings.

Temporary Employment Insurance Changes

 



Hours Credits to Aid Access to EI

Access to EI benefits is normally based on the number of insurable hours an individual has worked in the year prior to their application or since their last EI claim.  However, the government recognizes that the pandemic may have impacted the number of insurable hours Canadians have accumulated in the past year, therefore, EI claimants will receive a one-time insurable hours credit of:

• 300 insurable hours for claims for regular benefits (job loss)
• 480 insurable hours for claims for special benefits (sickness, maternity/parental, compassionate care or family caregiver)

The hours credit are retroactive to March 15, 2020 and will be available for new EI claims for one year.

Minimum Unemployment Rate

Normally, the number of insurable hours an individual must have worked in order to qualify for regular EI benefits depends on the unemployment rate of their region.  For example, if the unemployment rate in the claimant’s region is 6% or under, the claimant must have worked 700 insurable hours.  Meanwhile, if the unemployment rate is more than 13%, the claimant must have worked 420 insurable hours.   The regional unemployment rate also determines the number of weeks of EI regular benefits a claimant is entitled to and how the benefits will be calculated.

For one year, starting August 9, 2020, a minimum unemployment rate of 13.1% will be used for all EI economic regions in order to lower the number of hours required to qualify for EI regular benefits.  This means that individuals will be eligible for EI regular benefits across all regions in Canada with 420 hours of insurable employment.  Combined with the hours credit noted above, individuals can qualify for EI regular benefits with 120 hours of work.  Additionally, claimants will be provided a minimum entitlement of 26 weeks of regular benefits, which will be calculated based on their 14 best weeks of earnings.

Minimum Benefit Rate

The amount of EI benefits an individual will receive is typically based on the individual’s average weekly earnings.  However, due to the pandemic, workers’ weekly earnings may have been negatively impacted through loss of employment or reduced hours.

In order to address this issue, new EI claimants as of September 27, 2020 will receive a minimum benefit rate of $400 per week.

EI Fishing Benefits

Temporary measures to support self-employed fish harvesters who rely on EI fishing benefits in the off-season will also be implemented.  These measures will allow EI fishing benefits for workers to be calculated using the greater of following:

• Their actual fishing earnings for their current claim, or
• Their fishing earnings from their claim for the same season from the previous year

How to Apply

Canadians already receiving CERB through Service Canada will be transitioned to the EI program once they have received the maximum CERB benefits for which they are entitled to.

Canadians who are currently receiving CERB through the Canada Revenue Agency (CRA) will need to apply through Service Canada after September 26, 2020.

Temporary Recovery Benefits

The Government of Canada intends to introduce three new temporary recovery benefits to provide support to Canadians who continues to face financial hardship due to COVID-19.   These recovery benefits would be effective from September 27, 2020 for 1 year.

Canada Recovery Benefit

The Canada Recovery Benefit would provide a taxable benefit amount of $400 per week for up to 26 weeks for workers who are not eligible for EI, such as those who are self-employed or who work in the gig economy.

The Canada Recovery Benefit would be available to residents of Canada who:

• Are at least 15 years old and have a valid Social Insurance Number
• Have stopped working due to COVID-19 and are available and looking for work; or are working but have had a reduction in their income for reasons related to COVID-19
• Are not eligible for EI
• Had income of at least $5,000 in 2019 or in 2020, and
• Have no quit their job voluntarily

The Canada Recovery Benefit is available from September 27, 2020 for a one year period.  Claimants will need to apply after every two-week period and must attest that they continue to meet the above requirements.

Claimants may continue to receive the benefit even if they are able to earn income as long as they continue to meet the other requirements.  However, claimants would need to repay some or all of the benefit if their annual net income, excluding the Canada Recovery Benefit payment, is over $38,000.  The repayment amounts would equal to $0.50 of the benefit for each dollar of their annual net income above $38,000 to a maximum of the amount of benefit received.

Canada Recovery Sickness Benefit

The Canada Recovery Sickness Benefit would provide a taxable benefit amount of $500 per week, for up to two weeks for workers who are unable to work because they are sick or must self-isolate due to COVID-19.

The Canada Recovery Sickness Benefit would be available to residents of Canada who:

• Are at least 15 years of age and have a valid Social Insurance Number
• Are employed or self-employed at the time of the application,
• Have earned at least $5,000 in 2019 or in 2020,
• Have missed a minimum of 60% of their scheduled work in the week they claim the benefit, and
• Have not received other paid sick leave for the same benefit period.

Workers would not be required to have a medical certificate to qualify for the benefit.

Claimants would need to apply after the one-week period in which they are seeking income support and attest that they meet the requirements.

Canada Recovery Caregiving Benefit

The Canada Recovery Caregiving Benefit would provide a taxable benefit of $500 per week, for up to 26 weeks for households who are unable to work because they need to provide care to children or support to other dependents who had to stay home because of COVID-19 related daycare and facilities closures or other COVID-19 related restrictions.

The Canada Recovery Caregiving Benefit is eligible to residents of Canada who:

• Are at least 15 years of age and have a valid Social Insurance Number
• Are employed or self-employed on the day immediately preceding the period for which the application is made,
• Have earned at least $5,000 in 2019 or in 2020,
• Have been unable to work for at least 60% of their normally scheduled work within a given week because of one of the following:
  • They must take care of a child who is under 12 years of age
    • Because their school or daycare is closed or operates under an alternative schedule for reasons related to COVID-19,
    • Who cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19, or
    • Because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic, or
  • They must provide care to a family member with a disability or a dependent
    • Because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19,
    • Who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19, or
    • Because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic,
  • Are not in receipt of paid leave from an employer in respect of the same week they are claiming the benefit, and
  • Are not in receipt of the CERB, the EI Emergency Response Benefit, the Canada Recovery Benefit, Canada Recovery Sickness Benefit, short-term disability benefits, workers’ compensation benefits or any EI benefits or Quebec Parental Insurance Plan benefits in respect of the same week.

Claimants would apply after the period in which they are seeking income support and must attest that they meet the requirements above.  Two individuals residing in the same household cannot be in receipt of the benefit for the same period.

How to Apply

The CRA would administer the recovery benefits, and therefore, claimants would need to apply through the CRA.  In the coming weeks, the CRA will provide more details on how and when to apply.

These benefits would be effective from September 27, 2020 for one year