The relief felt when EI benefits come to the rescue in a time of need far outweighs any crumbiness of paying into the program. Unfortunately, the trade war and current dynamics of our relationship with the US have meant a spike in the number of Canadians leaning on EI to get by. This has led the Government of Canada to implement temporary guidelines around the Employment Insurance (EI) program to allow for more Canadians to get the help they need.
Limited time EI benefits changes
For the next few months, some important EI benefit changes have taken effect to help those affected by the current economic climate.
Regional Employment Rates
A major EI eligibility consideration is the employment rate where the applicant lives. Areas with better employment rates require applicants to have worked more weeks to be eligible for EI benefits. Usually, the required number of weeks falls somewhere between 14 to 22.
For the next three months, each region is getting a 1% rate boost, with none viewed as below 7.1%. This opens up eligibility to more people not covered under normal criteria.
Hours requirements
Typically, eligibility guidelines require that applicants have worked between 420 and 700 insurable hours. How many hours a specific applicant needs to be eligible depends on the employment rate in their area. For the next three months, no one requires more than 630 hours to be eligible for EI.
Extra income
Under typical circumstances, any extra income from things like severance and vacation that’s been paid out affects how much EI an applicant is eligible for. For the next six months, these extra funds will not be taken into consideration. This will help speed up applicant processing and give people more cash flow at a time when many need it.
Waiting period
Regular guidelines call for applicants to wait a week before getting any EI benefit payout. This waiting period is now waived for the next six months.
EI Work-Sharing Program temporary flexibilities
Companies laying off several employees typically use the EI work-sharing program, a subset of EI. Employers that sometimes face vastly varying production needs, such as the auto industry, use this option most.
It’s the employer that arranges these particular EI benefits on behalf of their employees. Employers can apply for this program when “there is a temporary decrease in the normal level of business activity,” and “the decrease is beyond the control of the employer”.
Due to the circumstances we’re facing right now, a couple of temporary adjustments to the EI work-sharing program have been put in place.
- A $500 minimum weekly benefit rate
- 26-week minimum benefit period
- Automatic extension for existing claims to 50 weeks
- Give those with precarious employment 300 hours of credit
- Use only the most recent claim when considering eligibility
Regular EI Benefits guidelines changes
Before these temporary changes were made, there were some recent updates to EI Benefits. Below are a few of the most important to be aware of:
Maximum insurable earnings (MIE) – This is the maximum level of income someone can make that is covered under EI. MIE was increased by $2,500 from last year up to $65,700.
Max weekly benefit – The max weekly benefit someone can receive from EI is $695. The specific amount an applicant is eligible for depends on their income. (Please note that this amount is for claims made after Dec. 29th, 2024.)
Tips for making the most of your EI benefits
Below are some important things to consider and know when you’re on EI.
- If you lose your job, don’t wait to apply for EI. There is a strict timeframe for applying for EI. You may lose out if you apply outside of that timeframe. For example, don’t wait to apply once your severance has run out.
- Claiming EI benefits requires you to be “ready, willing, and capable of working” and actively looking for work. It’s best to keep track of any job search efforts you are doing, so if need be, you can prove you’ve been fulfilling your requirements.
- Create an updated budget that reflects what you can reasonably afford while on EI.
- Contact your creditors to see if they have any options, such as payment deferral, that can help minimize costs for a while. Put any money that would have gone towards these bills aside to either help pay bills should your EI run out, or to catch up on payments once working again.
- If your previous employer offered health insurance, ask about your options. Depending on your insurer, you may be able to keep the benefits going while you look for a new job by paying the premiums yourself.
- Spend some time looking at what other resources are available to you. There are many government and community programs that offer help with, among other things, job searching, financial aid, and skill upgrading.
- Don’t forget that any money paid out from EI benefits is taxable. Avoid a big tax bill by setting money aside regularly.
- EI recipients are allowed to work while claiming EI, but there are some guidelines about how much they can earn. Make sure you’re aware of these guidelines to avoid issues.
Wrap-up
The Canadian government recognizes that EI Benefits need updating to reflect the current circumstances we’re facing. These changes will help a lot more people stay afloat than the usual guidelines would allow. While this is great news, many Canadians were already struggling financially, often because of unmanageable debt. If this is the case for you, call us for a free consultation. Our trained Credit Counsellors will offer you personalized advice on what debt relief plan would be best for you.
