Digest of Benefit Entitlement Principles Chapter 1 - Section 9

1.9.0 Payment of benefit

Once the benefit period has been established, the waiting period served, and the claimant fulfills the conditions of entitlement, a claimant generally receives a benefit payment every two weeks. In order to receive these payments, the claimant must complete and submit a bi-weekly claimant’s report.

1.9.1 Claimant’s reports - continuing claim

Benefits will only be paid to a claimant for any week in a benefit period, when a request is made for that payment, that is, by making a claim (EI Act 49(1)). This must be done by completing a form, including electronically, that is approved for this purpose (EI Act 50(3)). This is commonly referred to as a "continuing claim".

The form used is a claimant's report, which normally covers a period of two weeks, although occasionally, it may cover only one week. It must be submitted to the Commission at the end of the period that it covers, before payment can be issued.

There are several ways to file a claimant’s report:

1. EI Internet Reporting Service: this is the electronic service that allows claimants to complete their reports using the Internet.
2. EI Telephone Reporting Service: this is an electronic service that allows claimants to complete their reports using a touch-tone phone.
3. Paper reports: this is only available when reporting online or by phone is not possible. Paper reports must be completed and returned by mail.

A delay in returning the report to Service Canada can result in a disentitlement (EI Act 50(1); EI Regulation 26), unless good cause is shown for the delay and the claim can be antedated (EI Act 10(5); Digest Chapter 3).

1.9.2 Calculation period (Benefit rate)

The calculation period of a claimant is a specific number of weeks, in their qualifying period, whether consecutive or not, during which they had their highest earnings. That specific number of weeks is used in the calculation of the benefit rate, and is determined in accordance with the table set out in subsection 14(2) of the EI Act. The number of weeks shown in the table is based on the rate of unemployment in the area in which the claimant ordinarily resides (Digest 1.2.5).

1.9.3 Weekly rate of benefit

The weekly rate of benefits is the maximum amount a claimant may receive for each week in their benefit period. The basic benefit rate is 55% of the claimant’s average insurable earnings (EI Act 14(1)), up to a weekly maximum; (EI Act 17)). Depending on personal circumstances a benefit rate could be higher than 55% of a claimant’s normal weekly earnings (EI Act 16(10)); however, it can never be more than the weekly maximum.

The claimant’s average weekly insurable earnings are obtained by adding the insurable earnings in a specific number of the claimant’s highest earnings weeks, as determined above, and dividing the total by the number of weeks in the table (EI Act 14.2)).

The average weekly insurable earnings amount, which cannot exceed the yearly maximum divided by 52 (EI Act 14(1.1)), is multiplied by 55% to arrive at the claimant’s weekly EI benefit rate.

The total amount of insurable earnings will be allocated in the calculation period where the employment falls completely in the calculation period. Where any period of employment falls partially outside the calculation period, the total amount of insurable earnings, excluding those payable by reason of lay-off or separation from employment, will be allocated proportionately over the period of employment on the basis that the claimant earned the same amount of insurable earnings for each of the seven days of each week.

1.9.4 Increase in the benefit rate

The benefit rate is increased if the claimant or the claimant's spouse is:

• in receipt of the Child Tax Benefit (CTB) under the Income Tax Act, as of the Sunday of the week for which EI benefits are claimed; and
• the family income is lower than $25,921.

This is called a Family Supplement (EI Act 16).

No family supplement is payable where the family income exceeds the Child Tax Benefit Working Income threshold of $25,921 or once the EI weekly benefit rate plus the family supplement reaches the maximum weekly EI benefit rate (EI Act 17; EI Regulation 34(5)).

If both spouses are claiming EI benefits for the same period only one of the spouses will be entitled to the family supplement. It is up to the spouses to decide which of them will receive it. This decision must be made prior to any weeks of benefits being paid (EI Regulation 34(4)).

The maximum family supplement will not exceed 25% of the claimant's weekly insurable earnings in the calculation period (EI Regulation 34(6)).

1.9.5 Benefits paid defined

As previously discussed, there is a maximum number of weeks of benefits that can be paid in a benefit period (Digest 1.4.3). Any week for which $1.00 or more of benefits has been paid, reduces this maximum number (CUB 77020). Weeks for which no actual payment was issued, but for which benefits are deemed paid are also deducted from the maximum weeks payable. A week of benefits is considered to have been paid when the benefits for that week were:

1. applied against a week of disqualification (i.e. weeks of definite disqualification according to EI Act 27 and EI Act 28(6)
2. used to repay an overpayment (EI Act 42(2); EI Act 47)
3. applied against a penalty (EI Act 38(1); (2))
4. transferred to a government or municipal authority as a refund of assistance already provided (EI Act 42(3)).

There are many situations where, after a week of benefits has been paid or deemed paid, following reconsideration it is determined that the claimant was not entitled to any benefits for that week, and an overpayment is established. In these cases, any full weeks for which an overpayment is established will be re-added to the total number of weeks payable in the benefit period. This does not necessarily mean that the benefit period will be extended to allow for those weeks to be paid.

1.9.6 Benefit Repayment Adjustment Calculation (Clawback)

A repayment adjustment calculation (also referred to as a clawback) is applied to the EI benefits paid to a claimant when their net income, as defined in the Income Tax Act, exceeds 1.25 times the maximum yearly insurable earnings.

Since the 2000 taxation year,

• the net income threshold applies to regular and regular fishing benefits only;
• the repayment level is set at 30% (EI Act 145(1))
• the adjustment does not apply to special benefits (sickness, maternity, parental, compassionate care and family caregiver) (EI Act 145(1)(a))
• a first time claimant is exempt from this provision.

A first time claimant is defined for this purpose, as an individual who has received less than one week of regular benefits in the 10 taxation years prior to the current taxation year (EI Act 145(2)).

When a claimant's net income exceeds the threshold, the claimant is required to repay to the Receiver General, 30% of the lesser of: (EI Act 145(1))

1. the total of the regular benefits paid in the applicable taxation year; or
2. the amount of the claimant's net income that exceeds the threshold, for the taxation year.

When an overpayment amount resulting from fraud has been repaid, those weeks of overpayment are still considered as weeks paid for the purposes of the adjustment calculation (EI Act 38(3)).

EI benefits paid for work-sharing and employment measures are considered regular benefits, and therefore are subject to repayment. However, no financial assistance of any kind under Part II of the EI Act is included in the repayment provisions.

1.9.7 Earnings while on claim

The EI working while on claim provisions allow claimants to stay connected to the labour market and earn additional income while on claim. The provisions allow claimants to keep receiving a portion of their EI benefits, along with all earnings from employment or other sources. Claimants who meet certain criteria have a choice of two options regarding how earnings are deducted from benefits. These provisions apply to any eligible EI claimant who earns money while collecting any type of EI benefits. However, for weeks of sickness and maternity benefits claimed, the provisions only apply to weeks of benefits payable on or after August 12, 2018.

Default earnings rule:

Once the waiting period has been served, claimants can keep 50 cents of EI benefits for every dollar earned or received while on claim, until their earnings reach 90% of the weekly earnings used to establish their claim. Any earnings above this cap are deducted dollar-for-dollar from benefits. This method is the default rule that automatically applies to all eligible claims.

Transitional Measure:

Under the working while on claim provisions of Pilot Project 20, which were in effect from August 7, 2016 to August 11, 2018, claimants had the option to revert to the provisions of an earlier pilot project (Pilot Project 17). Pilot project 17 allowed that, once the waiting period was served, claimants could earn the higher of $75 or 40% of their weekly benefit rate each week, before any deductions were made from their benefits. Any amount earned that exceeded this amount was deducted dollar-for-dollar from benefits.

Claimants who chose to revert during Pilot Project 20 will continue to have this second option for a period of up to three years (until August 2021).

The option to revert to Pilot Project 17 does not apply to claimants in receipt of sickness, maternity, or special benefits for the self-employed, unless they had previously reverted a non-sickness, maternity or self-employment claim. This is because they did not previously have this option on self-employment claims, and therefore would not meet the requirement of having reverted on a claim during the period covered by Pilot Project 20.

The default method of treating earnings while on claim applies to self-employment claims, as well as claims where the claimant is outside Canada.

Claimants who are eligible to choose the alternate option are strongly encouraged to make the choice near the end of their claim in order to have more complete information about their specific circumstances and work pattern. This will make it easier to determine which option would be more beneficial for them. Once the claimant has made their decision to revert a claim, the decision is final and cannot be reversed, regardless of the final impact on the payment of benefits. Decisions made by the Commission regarding requests to revert a claim are not subject or formal reconsideration or appeal.

Earnings to be deducted from benefits are always rounded to the nearest dollar. A fraction that is less than one-half is disregarded, and a fraction equal to or greater than one-half is taken as a dollar. For example, for a benefit rate of $300, earnings of $82.50 would result in a deduction of $41, reducing the benefits payable to $259.Detailed information about the working while on claim provisions is available on the Government of Canada  website.

In the context of the Quebec Parental Insurance Program EI maternity or parental benefits are reduced by the amount of any benefits paid or payable under the provincial plan.

Thus, an amount equal to the amount of QPIP provincial benefits a person has received or is entitled to receive, will be deducted in full from EI maternity or parental benefits for which the person may be eligible (EI Regulation 76.09(2)).

When a claimant is referred to a course or program of instruction or training by the Commission or a designated authority, earnings or allowances received under employment benefits (EI Act 19(4)) are not deducted from benefits, except in accordance with the EI Regulations (EI Regulation 16(1))

When the claimant is attending a course or program of instruction to which they were not referred, the total of any allowances paid for attending that course are deducted (EI Regulation 16(1)). However any allowances paid for dependent care, travel, commuting, living away from home or disability are not deducted (EI Regulation 16(2)).

There will be cases where the claimant attends a training course and is paid employment benefits (Part II) because they did not have an interruption of earnings, they didn’t qualify for EI benefits (Part I), or because they were disentitled from benefits. If a claimant in one of these situations subsequently qualifies for EI benefits for those same weeks, the total of the earnings or allowances paid under Part II as employment benefits will be deducted from EI benefits (EI Regulation 16(3)). For this regulation to apply all three conditions therein must be present:

1. the claimant originally did not have an interruption of earnings or qualify for EI benefits,
2. was paid employment benefits for attending a course or program of instruction or training, and
3. subsequently became entitled to EI benefits for those same weeks.

Earnings arising from a job not related to the course or employment activity continue to be deducted from benefits (EI Regulations 35 and 36).

1.9.8 Days of disentitlement

A deduction equal to one-fifth of the benefit rate will be made for each working day of disentitlement in a week for which benefits are payable (EI Act 20(2)).

A working day is considered to be one of five weekdays, thereby excluding Saturday and Sunday. EI Regulation 32 is clear regarding disentitlements resulting from non-availability thus, even holidays that fall on a weekday are considered to be working days, and potentially subject to disentitlement.

1.9.9 Unpaid wages

Often times an employer may be experiencing financial difficulties and is on the verge of bankruptcy or receivership. In these situations, if a claimant has filed a complaint with the provincial labour authorities for unpaid wages owing for work performed, those unpaid wages and hours of work will be used to establish their claim for benefits (EI Regulation 9.1).

In these situations, CRA gives the claimant credit for the unpaid portion of earnings. This provision applies to unpaid wages only. Termination monies or overtime owed to the claimant, but not paid by the employer, are not included in the determination of unpaid insurable earnings.

Unpaid wages that fall into the calculation period are taken into consideration when determining the benefit rate. Also, hours of work related to these unpaid wages are included in the total hours of insurable employment used to establish a benefit period, and for determining the number of weeks of benefits potentially payable (EI Regulation 19(6)).

1.9.10 Claim for more than one type of benefits

It is not unusual for an insured person to claim more than one type of benefits during a single benefit period. This makes it somewhat more complicated to determine the number of weeks of benefits they may receive. In this respect, it is necessary to understand the specific limits, on the maximum number of weeks of benefits payable, and on the duration of the benefit period, depending on the types of benefits claimed.

Where a person makes a claim for various types of benefits during a single benefit period and fulfills all entitlement conditions, it then becomes necessary to determine whether these benefits can be paid within that benefit period. The number and type of benefits already received, the type of benefits claimed and the time elapsed since the beginning of the benefit period, are all factors that must be considered.

There are several types of benefits that are paid while a claimant is participating in a developmental program. When the person is employed under a work-sharing agreement, the benefit period is extended by the number of weeks that the person is employed in work-sharing while claiming benefits (EI Regulation 45)).

However, when a person is participating in a job creation partnership, is attending a training course to which they have been referred by an authority designated by the Commission, or is employed under an approved self-employment agreement, there is no legislative provision to extend the benefit period. In these situations, when the benefit period terminates, the person may then receive financial assistance under the employment benefits provisions (Part II of the EI Act).