Digest of Benefit Entitlement Principles Chapter 20 - Section 5
20.5.0 Relevant write-off situations
It is important to stress that only once the applicable general principles referred to above are met, can an overpayment be written off. Each write-off situation is discussed briefly in the following sections.
20.5.1 Write-off pursuant to EI Regulation 56(1)(e)
Write-off in these situations is not limited to benefits that were paid more than 12 months prior to the debtor being notified of the overpayment.
220.127.116.11 Canada Revenue Agency or Tax Court of Canada decisions
Decisions or determinations regarding insurability of employment, its duration, or the amount of insurable earnings a person has accumulated are made by the Canada Revenue Agency (CRA) or the Tax Court of Canada (TCC) under Part IV of the EI Act.
Once a CRA or TCC decision is made, if an overpayment is established, the overpayment may be written off immediately, even if the benefits were paid recently, if it does not arise from an error, or a false or misleading statement or representation made by the debtor, whether made knowingly or not (EI Regulation 56(1)(e)(i)).
18.104.22.168 Employment measures – Referrals under section 25 of the act
An overpayment of benefits paid as training or other allowances to a claimant participating in training or other activities to which they were referred by a designated authority (EI Act 25) may be written off (EI Regulation 56(1)(e)(ii). This refers to overpayments arising from a retroactive decision made under Part I, if it does not arise from an error, or a false or misleading statement or representation made by the debtor, whether made knowingly or not.
As is the case with overpayments resulting from CRA or TCC decisions, when an overpayment is established in respect of employment measures, that overpayment is written off immediately, even if the benefits were paid only recently.
20.5.2 Write-off pursuant to EI Regulation 56(2)
In the following situations, it is important to stress that only the portion of an overpayment that represents benefits paid more than 12 months prior to the debtor being notified of the overpayment can be written off.
22.214.171.124 Delay or error made by the Commission
It is important to prevent situations where a claimant is required to pay for delays or errors caused by the Commission, when the situation is completely out of the claimant’s control.
Overpayments that occur when the Commission does not make a decision on a claim within a reasonable period of time may result in a portion of the overpayment being written off. This refers to situations where a claimant provided information, and before the Commission processed the information, benefits were incorrectly paid. The portion of the overpayment that would not have occurred, had there been no delay, can be written off. A Commission error occurs when benefits are wrongly paid because the Commission did not action the claim appropriately (Digest 17.2.0). This may occur when there is information on file which the Commission ignores, or when errors in the calculation of one or more elements of the claim occur (EI Regulation 56(2)(b)(i)).
126.96.36.199 Control or review by the Commission
There are various programs and mechanisms implemented by the Commission’s Integrity Services Branch and other sectors of the Commission, which can result in a review of benefits paid. These reviews may retroactively affect entitlement to benefits.
Depending on the circumstances, a review may be conducted for a variety of reasons. Thus a claim may be reviewed because, an error was discovered on the record of employment, the insurability of the employment was in error, or the Commission made an error in processing the claim (EI Regulation 56(2)(b)(ii)).
188.8.131.52 Error on the record of employment
The most common types of errors on a record of employment (ROE) are variances in the reported information, such as the start and end date of employment, the amount of insurable earnings, or the number of insured hours, and the information found in the employer's records. For example, some of the information on one record of employment may relate to the employment of another employee working for the employer (EI Regulation 56(2)(b)(iii)).
Special attention must be given to these situations, especially where, for example, due to an error on the ROE the claimant received a benefit rate almost equivalent to what they were earning as an employee. In such situations consideration should be given to whether the claimant should reasonably have known that there was an error and that they were probably not entitled to the full amount they were receiving (Digest 20.3.0).
184.108.40.206 Incorrect calculation by the employer of earnings or insured hours of employment
An erroneous calculation by the employer of the claimant's insurable earnings or insurable hours of employment is equally likely to result from an error by the employer. In practice, it may be that the error is related to the particular way earnings are calculated and paid to the worker, as in the case of real estate agents or some persons engaged in fishing (EI Regulation 56(2)(b)(iv)).
220.127.116.11 Erroneous insurability of employment or other activity
Erroneous insurability of a claimant's employment or other activity, other than from a ruling by CRA or the TCC, may result in a cancellation of the benefit period, a reduction in the number of weeks that could be paid in the benefit period, or a change in the weekly rate of benefits. This may lead to an overpayment (EI Regulation 56(2)(b)(v)).
Examples of this type of error would be a training period that the employer insured without a contract of service, or work of a casual nature not related to the employer's business that should not have been insured.
20.5.3 Other write-off situations
There are several situations in which the Assistant Deputy Minister (ADM) and/or Chief Financial Officer (CFO) have the authority to write off overpayments. In the following situations, a claimant or their legal representative may contact CRA to request that an overpayment be considered for write-off. CRA will conduct a financial assessment of the debtor’s situation, then make a recommendation to the Commission as to whether or not the overpayment should be written off.
- When the total amount of the debt does not exceed $100, there is no active benefit period and the debtor is not currently making regular payments,
- if the debtor is deceased
- the debtor is an undischarged bankrupt in respect of whom the final dividend has been paid and the trustee discharged
- the Commission considers that the penalty is uncollectable
- repayment would result in undue hardship
- the administrative costs of collecting the debt would likely be equal to or more than the debt.
Where a claimant files for bankruptcy their overpayment will generally be written off. In the case of debts resulting from misleading statements that were knowingly made, the overpayment will not be written off if it has been confirmed through the appeal process, regardless of the status of the bankruptcy proceedings. A request for formal reconsideration by the Commission is not sufficient to meet this requirement. The confirmation of the decision must result from an actual appeal to the SST of higher.
Overpayments that are established after a bankruptcy is filed, whether or not they result from misleading statements, will not be covered by the bankruptcy. This is because this overpayment was not a debt owed by the claimant at the time the bankruptcy was filed. The claimant is responsible to repay the total amount of the debt (CUB 58483).
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