OTTAWA, Dec. 21, 2016 /CNW/ - Starting next month, the Employment Insurance (EI) waiting period will be shortened from two weeks to one week. This measure is part of the Government of Canada's robust plan to improve the EI program and help Canada's middle class and those working hard to join it.
The waiting period acts like the deductible that must be paid for other types of insurance. Shortening the waiting period is expected to ease the financial strain for EI claimants and will put an estimated additional $650 million in the pockets of Canadians annually beginning next year.
For example, for an eligible claimant who is laid off and subsequently finds work after 12 weeks, the change means that up to 11 weeks of EI benefits will be payable whereas only up to 10 weeks are currently payable. The reduction of the waiting period applies to all types of EI benefits—regular, fishing, sickness, maternity, parental, compassionate care, parents of critically ill children, and special benefits for self-employed individuals.
While claimants are still entitled to the same maximum number of weeks of EI benefits, the waiting period may have indirect implications for workers and employers who have top-up arrangements that supplement EI. Reducing the waiting period shifts forward the period during which EI benefits are payable. In some cases, employer payments that supplement EI maternity and parental benefits may be aligned to the two-week waiting period and the reduction of the waiting period may have impacts for workers or employers.
The Government of Canada has taken steps to mitigate the potential impact on employers' and workers' sickness plans by providing time for employers to adjust these plans and providing measures to minimize the impacts on workers' EI benefits.
This measure is the latest in a series of changes to EI announced in Budget 2016. These include: eliminating EI eligibility requirements that restricted access for new entrants and re-entrants to the program; simplifying job search responsibilities; temporarily extending EI benefits in 15 EI economic regions; introducing a more flexible Working While on Claim pilot project; and extending the Work-Sharing agreements. Consultations on EI service quality and maternity, parental and caregiving benefits were held with key stakeholders and the public to seek their input on ways to improve the EI program so that it is better aligned with today's labour market and is responsive to the needs of Canadian workers and employers.
"By shortening the waiting period, we are taking a concrete step to ease financial pressures for claimants who have lost their jobs or who leave work for health reasons or family pressures."
– The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development
- The reduction in the waiting period does not affect the speed of the first payment. The current standard of providing payment within 28 days, 80 percent of the time, will continue to apply.
- Budget 2016 is providing $2.7 billion over the next two years for improvements to EI to help Canadians across the country.
EI Changes 2016
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Since 1971, claimants have served a two-week waiting period before Employment Insurance (EI) benefits become payable. The waiting period acts as a deductible similar to other kinds of insurance. Budget 2016 announced the EI waiting period will be reduced from two weeks to one, effective January 1, 2017. This change will be important to both claimants and employers. Claimants who have top-up arrangements that supplement EI may be impacted and employers may need to adjust their agreements to align to the reduced waiting period.
Information for claimants
EI regular benefits are available to individuals who lose their jobs for reasons outside their control—for instance, a shortage of work or seasonal layoffs, or because they quit with just cause—and who are available for and actively seeking employment. To qualify for regular benefits, individuals must have been without work and without pay for at least seven consecutive days. In addition, they must have accumulated the required number of hours of insurable employment in the last 52 weeks before their claim or since the start of their last EI claim (known as the qualifying period), whichever is shorter. In general, most individuals require between 420 and 700 hours of insurable employment to qualify for EI regular benefits.
Claimants could receive EI benefits from 14 weeks up to a maximum of 45 weeks, depending on the unemployment rate in their region.
Maternity and parental benefits
The maternity benefit provides up to 15 weeks of benefits to EI eligible individuals who are pregnant or have recently given birth. These benefits are payable as early as 8 weeks prior to the expected date of birth, and as late as 17 weeks after the birth of the child.
Parental benefits are intended to support parents in balancing the demands of work and family by providing the flexibility they need to stay home and care for their newborn or newly adopted children. Parental benefits may be shared by EI-eligible parents and are payable to either the biological or adoptive parents while they are caring for their child, for up to 35 weeks, taken concurrently or separately.
It should be noted that the maternity and parental benefits offered under the EI program only apply to parents who reside outside of Quebec. The Quebec Parental Insurance Plan provides benefits to workers and self-employed Quebec residents who are eligible to take a maternity, paternity, parental or adoption leave.
Compassionate care benefits
Since January 3, 2016, the EI compassionate care benefit allows eligible claimants to collect up to 26 weeks of benefits. Further, the period during which benefits can be taken was expanded to 52 weeks (up from 26 weeks). The compassionate care benefit is available to persons who have to be away from work temporarily to provide care or support to a family member who has a serious medical condition with a significant risk of death within 26 weeks. Compassionate care benefits can be shared between family members.
Parents of critically ill children benefits
Parents of Critically Ill Children benefits are available to EI-eligible parents caring for a child under 18 years of age with a critical illness or injury. The benefit can be shared between eligible parents in the manner that best suits them (e.g., both parents may take weeks together).
The sickness benefit is available to individuals who are unable to work because of sickness, injury or quarantine. To qualify, an individual must obtain a medical certificate signed by their doctor to confirm the duration of incapacity. The sickness benefit can be paid up to a maximum of 15 weeks.
The EI program also encourages the delivery of sickness benefits by private sector employers. The EI program provides a premium reduction to employers and employees when the employer participates in the Premium Reduction Program and offers sickness benefits that meet the standards in the Employment Insurance Regulations.
Special benefits for self-employed individuals
Self-employed individuals have been able to opt into the EI program on a voluntary basis since January 31, 2010, by entering into an agreement with the Canada Employment Insurance Commission to pay EI premiums in order to obtain access to EI special benefits including sickness, maternity, parental, compassionate care, and parents of critically ill children benefits.
The EI program provides fishing benefits to qualifying, self-employed fishers who are actively seeking work. Unlike regular EI benefits, eligibility for EI fishing benefits is based on earnings, not insurable hours of employment. Fishers may be eligible to receive regular fishing benefits as well as sickness, maternity, parental, compassionate care and/or parents of critically ill children benefits.
Information for employers
Premium Reduction Program
The Premium Reduction Program (PRP) provides a reduction of the employer's premium rate when an employer provides a plan in respect of illness or injury to their employees that meets the standards established in the EI Regulations. The premium reduction recognizes the savings to the EI Operating Account resulting from workers using employer benefits before accessing EI sickness benefits.
The PRP provides more than $900 million in EI premium reductions annually to participating employers to recognize savings to the EI Operating Account as a result of their qualifying wage-loss plan. Employers will be expected to align their sickness plans to pay benefits after one week versus the current two-week requirement.
While most employers participating in the PRP will not be affected by the waiting period change, some employers may be impacted. The Government of Canada has taken steps to mitigate the potential impact on affected employers by providing them with a four-year transitional period to adjust plans to a one-week waiting period, while continuing to receive a premium reduction during the transitional period.
Supplementary Benefit Plans
Employer Supplementary Benefit Plans may be in the form of a registered Supplementary Unemployment Benefit (SUB) plan, which supplements regular benefits paid during a temporary stoppage of work or during a period of training, as well as sickness benefits. Payments received by an EI claimant under a SUB plan are not considered earnings and, therefore, do not result in a reduction of EI benefits. Employers can also offer plans that supplement employees' maternity, parental, compassionate care and parents of critically ill children benefits. Workers and employers should review their plans to assess whether they wish to make changes to align to the new one-week waiting period.
SOURCE Employment and Social Development Canada
For further information: For media enquiries, please contact: Mathieu Filion, Director of Communications, Office of the Honourable Jean-Yves Duclos, P.C., M.P., Minister of Families, Children and Social Development, 819-654-5546; Media Relations Office, Employment and Social Development Canada, 819-994-5559, firstname.lastname@example.org