Changes to EI: Update
Since the federal government first announced changes to Employment Insurance (EI), there has been confusion about exactly what the changes are, and what they mean to Canadians. This article will clear up that confusion.
In May of this year, Minister of Human Resources, Diane Finley, announced several changes to the current EI system that will take effect in January 2013. The most significant changes require claimants to accept a commute of up to an hour away from their homes for jobs in different fields that could pay as low as 70% of their former income.
EI recipients will also be split into three categories: Long-tenured workers (those who have been working for close to a decade with little unemployment), frequent claimants (those who make an EI claim every year due to seasonal work, like fishing), and occasional claimants (all other claimants). The following table illustrates how each of these three categories will be affected:
|Type of Claimant||Acceptable % of Former Income|
Earlier this month, the federal government announced another change specifically for those who work part-time while on claim. Basically, claimants now have a choice: Continue supplementing their EI benefits under the current system, or switch back to the previous system.
Under the previous system, an individual collecting EI could work part-time for $75 a week or up to 40% of their weekly benefit, whichever was higher, without sacrificing their benefits. For every dollar earned above this allowable amount, the government would hold back one dollar.
Under the current system, someone collecting EI can only keep 50% of their part-time earnings. At first, this system sounds disadvantageous, but it can prove more beneficial to claimants the more frequently they work.
The ability to choose between the current or previous system does have its restrictions. To switch to the previous system, one must have made an EI claim in the 12 months leading up to August 4, 2012. If an individual’s claim was filed after that date, they must remain in the current system. If someone (who qualifies) decides to switch back to the previous system, the switch will not take effect until January 6, 2013 – although any monetary benefits of the switchback will be paid retroactively going back to August 2012. The final restriction stipulates that once an individual chooses to go with the (new) current system, they cannot go back. The choice is final.