Employment Insurance – Working While on Claim

From: Employment and Social Development Canada

What's new

As of August 12, 2018:

  • The 50 cents for every dollar earned rule becomes a permanent part of the Employment Insurance (EI) program.
  • The Working While on Claim rules now apply to sickness and maternity benefits.

With Working While on Claim, you can keep receiving part of your EI benefits and all earnings from your job.

Eligibility

Working While on Claim applies if you are receiving one of the following types of EI benefits:

How working affects your claim

If you earn money while receiving EI benefits, you can keep 50 cents of your benefits for every dollar you earn, up to 90 percent of your previous weekly earnings (roughly four and a half days of work). Above this cap, your EI benefits are deducted dollar-for-dollar.

You are not eligible to receive EI benefits if you work a full week, regardless of the amount you earn. However, this will not reduce the total number of weeks payable on your claim.

Example 1

John was laid off when the grocery store where he worked shut down. His weekly earnings at the grocery store were $500, so his weekly EI benefit rate is $275 (55 percent of $500). He has found a part-time job at a restaurant, where he works three days a week and earns $300 per week.

As a result, his $275 in EI benefits are reduced by $150 or 50 cents for every dollar he earns at the restaurant ($300 ÷ 2 = $150). This brings his total EI benefit to $125 ($275 – $150 = $125).

In the end, John takes home $125 per week in EI benefits plus his part-time wages of $300, for a total of $425.

Example 2

Melissa got sick, stopped working to recover from her illness and applied for EI sickness benefits. Her normal weekly earnings were $850, meaning her EI benefit rate would be $468 per week (55 percent of $850).

Melissa was off work for three weeks before her doctor wrote a note saying she could return to work part-time for two weeks, and work full-time after that. Melissa returned to work part-time, working a day and a half per week and earning $260 per week.

In her first week off work, Melissa served her one-week waiting period and was not paid any benefits. During the second and third weeks that she was off work, she received $468 in EI sickness benefits.

For the fourth and fifth weeks, Melissa worked part-time and her benefits were reduced by $130 or 50 cents for every dollar earned ($260 ÷ 2 = $130). This brings her total EI sickness benefits to $338 ($468 – $130 = $338). For the weeks she worked part-time, she took home $338 in EI sickness benefits plus her part-time earnings of $260 for a total of $598.

Melissa is not paid any sickness benefits in the sixth week because she returns to work full-time.

Exception for some employees on paid short-term disability leave from work

Is your employer registered in the Premium Reduction Program (PRP)? Employees who become ill or injured need to first make use of their employer's sick leave plan before receiving EI benefits. If you are receiving wage loss indemnity or paid sick leave from an employer registered in the PRP, your earnings will be deducted differently. Find out more about the Premium Reduction Program.

How to get started

Since you are already receiving EI, you do not need to apply for Working While on Claim. You simply need to continue to declare your earnings online.

To view your claim information and payment details, visit your My Service Canada Account.

Temporary alternate earnings rule

An alternative earnings rule, which might better support the work you do while on claim, is available to some claimants until August 14, 2021.

Alternate earnings rule

You keep the greater of $75 or 40 percent of your weekly benefit rate each week (the earnings from about one day of work) without any deduction from your benefits. Any amount earned above the $75 or 40 percent is deducted dollar-for-dollar from your benefits.

You may be eligible for this temporary option if you:

  • previously chose to use the alternate earnings rule for an EI claim established under Pilot Project 20, and have since established a new claim starting on or after August 12, 2018, for any type of EI benefit; or
  • are currently on an EI claim that started before August 12, 2018.

If you think you are eligible and want to choose the alternate earnings rule, contact Service Canada at 1-800-206-7218.

This rule is only available for a three-year transitional period, from August 12, 2018, to August 14, 2021. The transitional period is for claimants to get familiar with the new permanent earnings rule. The alternate earnings rule will not be available to claimants who establish an EI claim with a start date after August 14, 2021.

Example 1

John was laid off when the grocery store where he worked shut down. His weekly earnings at the grocery store were $500, so his weekly EI benefit rate is $275 (55 percent of $500). He has found a part-time job at a restaurant, where he works three days a week and earns $300 per week.

Automatically under the default earnings rule, his $275 in EI benefits are reduced by $150 or 50 cents for every dollar earned ($300 ÷ 2 = $150). This brings his total EI benefit to $125 ($275 – $150 = $125).

Under the default earnings rule, John would take home $125 per week in EI benefits plus his part-time wages of $300, for a total of $425.

If he chooses the alternate earnings rule, he can earn either $75 or 40 percent of his EI benefit of $275 ($110), without any deduction from his EI benefits. Any earnings above $110 reduce his EI benefits dollar-for-dollar. Since John earns $300 per week at his new job, the difference of $190 ($300 – $110) is deducted dollar-for-dollar from his EI benefits of $275, leaving him with $85 in EI benefits ($275 – $190 = $85). Under the alternate earnings rule, John would take home only $85 per week in EI benefits plus his part-time wages of $300, for a total of $385.

In this example, John is better off with the default earnings rule.

Example 2

Melissa was laid off when the construction company where she worked lost a major contract. Her weekly earnings averaged $800, so her weekly EI benefit rate is $440 (55 percent of $800). She has found a part-time job at another construction company, where she works one day a week and earns $160.

Automatically under the default earnings rule, Melissa's benefits are reduced by $80 or 50 cents for every dollar earned ($160 ÷ 2 = $80). This brings her total EI sickness benefits to $360 ($440 – $80 = $360).

Under the default rule, Melissa would take home a total of $520: $360 per week in EI benefits plus her part-time wages of $160.

If she chooses the alternate earnings rule, she can earn either $75 or 40 percent of her EI benefit of $440 ($176), without any deduction from her EI benefits. Any earnings above $176 reduce her EI benefits dollar-for-dollar. Since Melissa earns only $160 per week from her work while on claim, she can keep all of her EI benefits.

Under the alternate earnings rule, she would take home a total of $600: $440 per week in EI benefits plus her part-time wages of $160.

In this example, Melissa would earn an extra $80 per week under the alternate earnings rule. If she never works more than one day per week, she should choose this option.

Important reminders when considering the alternate earnings rule

If you decide to choose the alternate earnings rule, it will apply to the entire claim and your decision cannot be reversed. It's best to make the choice near the end of your claim. That way, you will have more complete information and it will be easier to know which option would benefit you most.

Also, if you choose the alternate earnings rule earlier in your claim, you must complete paper reports every two weeks and return them by mail. This could lead to delays in payment.

Rules prior to August 12, 2018

To learn about the Working While on Claim rules prior to August 12, 2018, visit the Working While on Claim pilot project page.

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