Supplemental Unemployment Benefit Program
What’s new for 2017:
Effective January 1, 2017, the Employment Insurance (EI) waiting period is reduced from two weeks to one week. Changes to the Employment Insurance Regulations were made to support the legislative change. For possible impacts on registered SUB plans, please refer to the Plan requirements section of the Program Guide.
This section is applicable to employers who provide supplemental payments to their employees while they receive EI benefits during a period of temporary stoppage of work, training, illness, injury or quarantine. Payments originating from these plans will not be deducted from EI benefits when the plans are registered with Service Canada.
Employers who provide top-ups to maternity, parental (including adoption) compassionate care or parents of critically ill children benefits should refer to the Employers supplementing maternity, parental, compassionate care or parents of critically ill children benefits web page. These plans do not have to be registered with Service Canada.
Employers can use a Supplemental Unemployment Benefit (SUB) plan to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work, training, illness, injury or quarantine.
Payments from SUB plans that are registered with Service Canada are not considered as earnings and are not deducted from EI benefits (pursuant to subsection 37(1) of the EI Regulations).
Basic requirements that must be met
SUB plans are registered by Service Canada through the SUB program in Bathurst, N.B. Plans must be registered before their effective date. Officers from the SUB program assess employers' SUB plans against the requirements set out in subsection 37(2) of the EI Regulations. SUB program Officers also help employers develop SUB plans that meet the requirements of the EI Regulations.
An acceptable plan is one that:
- identifies the group of employees covered and the duration of the plan
- covers a period of unemployment caused by one or a combination of the following: temporary stoppage of work, training, illness, injury or quarantine
- requires employees to apply for and be in receipt of EI benefits in order to receive payments under the plan
- requires that the combined weekly payments from the plan and the portion of the weekly benefit rate does not exceed 95% of the employee’s normal weekly earnings
- requires it be entirely financed by the employer
- requires that on termination, all remaining assets of the plan will be reverted to the employer or be used for payments under the plan or for its administrative costs
- requires that written notice of any change to the plan be given to Service Canada within 30 days after the effective date of the change
- provides that the employees have no vested right to payments under the plan except during a period of unemployment specified in the plan
- provides that payments in respect of guaranteed annual remuneration, deferred remuneration or severance pay will not be reduced or increased by payments received under the plan
This guide provides detailed information about:
How to contact us
For further information, contact the Supplemental Unemployment Benefit Program.
Frequently Asked Questions
Can I pay SUB benefits during EI's one-week waiting period*?
Yes you can, if your plan provides for such payments.
*Effective January 1, 2017, the EI waiting period is reduced from two weeks to one week. Changes to the EI Regulations were made to support this change. For more information, please refer to the Plan requirements section of the Program Guide.
Are SUB payments subject to payroll deductions?
Payments from a registered SUB plan are not insurable; therefore, EI premiums are not deducted. SUB payments are generally subject to Canada Pension Plan or Quebec Pension Plan deduction as well as income tax. For more information visit the Canada Revenue Agency or Retraite Québec website.
How is the registration date determined?
The registration date of your SUB plan is based on the date on which you submit the plan, if all the conditions are met. Failure to submit all supporting documents could delay the registration date. The plan can be approved for a maximum period of five years, unless it is contained in a collective agreement in which case we can approve the plan for the duration of the agreement.
What happens if my plan does not qualify?
If your SUB plan does not qualify, Service Canada will inform you of what change(s) would have to be made. If you choose to amend your plan to qualify, you must submit a copy of the amendment.
What happens if my plan meets the requirements?
When your plan meets all the requirements, Service Canada will advise you of the decision by letter. Also, we will advise the Service Canada Centres of the registration of your plan so that the employee's EI benefits are not reduced by the amount of your SUB payment.
Can changes be made to a SUB plan after it is approved?
Yes. However, you must notify the SUB Program within thirty (30) days of the date of the change by sending us a copy of the amendment to the plan.
Must my plan be registered before I start supplementing my employees’ EI benefits?
Yes. If your plan is not registered, the payments from the plan will be considered as earnings and an amount may be deducted from your employees’ EI benefits.
How will the employer verify that the employee is receiving EI benefits?
The employer can obtain the information directly from their employees or by consulting a system-generated report provided by Service Canada at the employer’s request.
How often must the employer renew the registration of the SUB plan?
The plan can be approved for a period of five years, unless it is contained in a collective agreement in which case we can approve the plan for the duration of the agreement.
After the original registration, we will contact you prior to the expiry date of your plan.
What if I make changes related to my plan, my address, my payroll deduction account, or to the ownership or structure of my business?
You must contact us to provide details of the change.
Must all my employees be covered by the plan?
No. You can cover any group of employees, for example, all salaried employees, hourly employees, or a specific union group.
What if I have more than one plan?
We need copies of all plans you wish to have registered.
Guides and help
- Employer Guide — Automated Earnings Reporting System (AERS)
- Guide for the Supplemental Unemployment Benefit (SUB) program
- How to complete the Record of Employment (ROE) form
- Supplement to the guide “How to complete the Record of Employment (ROE) form” for all school boards
- The EI Premium Reduction Program – A guide for employers offering short-term disability plans to their employees
Related services and information
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