Digest of Benefit Entitlement Principles Chapter 24 - Section 5

24.5.0 Calculating the benefit rate

The weekly benefit rate for a self-employed person is calculated by dividing the total of all self-employment earnings in the qualifying period (which is the entire calendar year prior to the year in which a claim for benefit commences (section 24.3 of the Digest; EIA 152.08(1)) by 52 weeks and multiplying the result by 55% or 33% for extended parental (EIA 152.16(1)).

The benefit rate for a self-employed person may not exceed the maximum rate determined by the maximum yearly insurable earnings in effect during the year in which the claim is established. The maximum yearly insurable earnings is the income level up to which Employment Insurance (EI) premiums are paid (EIA 152.21(1)). It determines the maximum rate of weekly benefits paid for all types of benefits under the EI program. If the claimant meets or exceeds the maximum yearly insurable earnings for the year in which a claim is established, they will qualify for the maximum benefit rate available (EIA 152.16(2)).

For example, a self-employed person registered for the self-employed program in January 2019. They waited the requisite year and applied for benefits in January 2020. The claimant had $55,000 in earnings in their qualifying period, which is the year 2019. For claims established in 2020, the required annual earnings from self-employment in the qualifying period is set at $7,279. The self-employed person met this condition and their weekly rate was calculated as $55 000/52 x 55% = $582. However, the maximum benefit rate they could have received is $573. This is based on the 2020 maximum yearly insurable earnings threshold of $54,200.

Note that the benefit rate may also include a Family Supplement. Self-employed workers who are in a low-income family (net income up to a maximum of $25,921 per year) with children, and who are in receipt of the Canada child benefit are eligible to receive the Family Supplement (section 1.9.4 of the Digest; EIA 152.17).

24.5.1 Combining insurable and self-employment earnings to calculate the benefit rate

In addition to earnings from self-employment, a self-employed person may have fishing and insurable earnings from work with an employer in their qualifying period. While the earnings cannot be combined to meet the legislated amount of self-employment earnings required in their qualifying period, all 3 types of earnings may be totalled to maximize the benefit rate (EIA 152.16(1)). However, the benefit rate can never be more than the maximum rate determined by the maximum yearly insurable earnings in effect during the year in which the claim is established.

Claimants' employer(s) will complete Record(s) of Employment in order for the Canada Employment Insurance Commission (the Commission) to maximize the benefit rate with income from fishing or insurable employment with an employer (EIR 19(2)).

24.5.2 Grounds for excluding insurable earnings when calculating the benefit rate

A reason for separating from insurable employment with an employer that occurs during the qualifying period may require adjudication with respect to the reason for the loss of that employment (for example quit or dismissed). The Commission must determine if the earnings from that employment can be used in the calculation of the benefit rate (EIR 24.3).

For the purposes of calculating the benefit rate, the Commission excludes all earnings gained from an employment when a claimant voluntarily leaves their insurable employment without just cause (section 6.4.0 of the Digest) or loses their insurable employment due to their own misconduct  (section 7.1.0 of the Digest).

Adjudication of reasons for separation on self-employment claims carries the same adjudication principles as those for other EI claims for benefits. General information on these two reasons follow, with references to additional information contained in their respective chapters in the Digest of Benefit Entitlement Principles.

24.5.2.1 Voluntarily leaving employment

The legislation provides the definition of a voluntary separation of employment as well as examples of what constitutes just cause, though it is important to note that this is not an exhaustive list (section 6.5.0 of the Digest). The Commission gathers facts from the claimant and the employer in order to make a fair determination of whether there was just cause for leaving one's employment.

Details on the principles of and various circumstances that lead to a determination of just cause for voluntarily leaving employment are found in Chapter 6 of the Digest and apply, in their entirety, to reasons for separation which occur during the qualifying period of claims by self-employed individuals who also have insurable employment.  It is important to distinguish between the terminology used in Chapter 6 that applies to Part I EI benefits, versus benefits for self-employed persons under Part VII.1 of the Employment Insurance Act (EIR 24.3). In the former, a disqualification may be imposed; in the latter, the issue to be considered is whether the earnings should be included in maximizing the benefit rate. Disqualifications do not apply to claims by self-employed individuals.

24.5.2.2 Misconduct

Unlike the concept of voluntarily leaving employment, the word misconduct is not defined in the legislation. When this word is used in a legislative context, it is the prerogative of the courts to interpret it. It is therefore a question of law. Over the years, jurisprudence has made a number of clarifications to the interpretation of the word misconduct. In one case, for example, the Federal Court of Appeal (FCA A-0213.09) held that :

"there can only be misconduct if the conduct is deliberate, that is, the actions that lead to the dismissal were conscious, willful and intentional. In other words, there is only misconduct when the claimant knows or should have known that his conduct would impede on his ability to execute his obligations towards his employer and that, as a result, it was possible for him to be dismissed."

Principles which guide the adjudication of a dismissal to determine if misconduct was present are found in Chapter 7 of the Digest. As well, examples of dismissal situations which may lead to a determination of misconduct, as well as those which may not, are detailed.