Digest of Benefit Entitlement Principles Chapter 24 - Section 13

24.13.0 Sickness benefits

24.13.1 Introduction

While the Act contains no specific term designating the type of benefits paid in case of an inability to work by reason of illness, injury or quarantine, the term, "sickness benefits" has been adopted for everyday use. Thus, it has been provided that a person who becomes incapable of work by reason of illness, injury or quarantine may receive benefits of a specific type. The legislated statement of this principle is found in the EI Act 152.03(1):

"Subject to this part, a self-employed person who ceases to work as a self-employed person because of a prescribed illness, injury or quarantine and who would be otherwise working, is entitled to receive benefits while unable to work as a self-employed person for that reason."

A further provision is contained in EI Act 152.03(4), which states:

"A self-employed person is not entitled to benefits under subsection (1) if, were it not for the prescribed illness, injury or quarantine, the self-employed person would be deemed, in accordance with the regulations, to be not working."

These few lines are a forewarning that sickness benefits are not paid to all claimants or in all circumstances. Instead, they are subject to specific conditions and provisions which are explained below.

24.13.2 First entitlement condition: while a person is unable to work

The legislated terminology, "while unable to work" Footnote 1 applies to a person who is unable to work by reason of illness, injury or quarantine. There is a caveat to this terminology with respect to sickness benefits for self-employed persons, however.

Although the purpose of sickness benefits is to provide temporary income support to those individuals who are unable to work, it need not be a complete inability to work. Given that a week of unemployment Footnote 2 is defined as a reduced workweek (by more than 40 per cent of what one normally works), the terminology 'while unable to work', carries the same conditions for the purposes of self-employment special benefits Footnote 3 .

The EI Regulations also provide for the making of claims for benefit by, and for the payment of benefit to, any person or agency on behalf of deceased or incapacitated persons or persons of unsound mind Footnote 4 .

24.13.2.1 By reason of illness, injury or quarantine

There must be a cause-and-effect relationship between the illness, injury or quarantine and the fact that a claimant is incapable of working Footnote 5 . With respect to the scope of the incapacity, it is important to note that only an illness, injury or quarantine affecting the person who is making a claim for benefits is applicable when considering self-employment sickness benefits.

A physical or mental disability is not necessarily the equivalent of an inability to work due to the disability. A distinction must be made between a handicapped worker and one who has had to leave their self-employment entirely or to a significant extent as a result of a recent disability. Where a person has paid premiums while suffering from a permanent partial disability, the person would be insured against the risk of unemployment in that context. Certain persons may prove that they are capable of work within the limits of their capacities, either because their handicap is not an obstacle to employment, because they were able to adjust to it on the basis of the labour market, or because they have the opportunity to work in an environment which does not hinder them given a disability.

Drug and alcohol dependency is without question another factor likely to render a person incapable of working to a full extent, or indeed, at all, during certain acute phases. It is possible that such a person will be treated in an outpatient clinic or will instead be admitted to a clinic, hospital or specialized centre for addiction treatment. Such a stay constitutes tangible proof that the person is incapable of working, in which case the payment of self-employment sickness benefits will be considered, unless the admission is a condition of mandatory confinement which is occasionally imposed by courts of law in their sentences. Such mandatory confinement may be regarded as a stay in an institution similar to a prison Footnote 6 .

24.13.2.2 Proof

A medical certificate signed by an acceptable medical practitioner which attests to the self-employed person's illness, injury or quarantine must be provided to the Commission before benefits are approved Footnote 7 .

24.13.3 The medical certificate, a significant source of information

The Commission is authorized to make regulations prescribing the information to be furnished by a person to prove his or her inability to work Footnote 8 . On this subject, the Regulations say that:

"The information and evidence to be provided to the Commission by a claimant in order to prove inability to work because of illness, injury or quarantine pursuant to paragraph 18(b) or Subsection 152.03 (1) of the Act, is a medical certificate completed by a medical doctor or other medical professional attesting to the claimant's inability to work and stating the probable duration of the illness, injury or quarantine."

A mere allegation of being unable to work is not sufficient. By providing a medical certificate it does not necessarily mean that a person has proven inability to work. It is possible that the information in the certificate is not consistent with the claimant's allegations.

It may also be that the Commission will consider that there is no inability to work or that the proof furnished will only cover part of the alleged period of inability. The Commission has various means and resources to obtain adequate proof of inability to work in order to make a decision on varied or inconsistent information on file.

24.13.4 Other means and sources of information

The agent who makes the decision on the claimant's entitlement to benefit must be in a position to gather and judge a multitude of sometimes-contradictory information and medical declarations concerning the state of a person's health. It is therefore essential for the agent to have the means and resources to facilitate the determination of the validity of the statements.

The attending physician, especially a specialist in the field, is generally the best judge of a person's state of health. The physician's role in respect of benefits comes down to providing or certifying any information considered appropriate concerning the nature of the illness, injury or quarantine, the probable duration of the inability to work and any other circumstances related thereto.

The attending physician does not decide on the entitlement to sickness benefits. That responsibility instead belongs to the Commission, which must rule on the various conditions to entitlement, provided for in the Act.

Certain situations require a medical opinion or recommendation concerning questions that are complex or ambiguous in nature. The Commission has entrusted this role to a medical adviser, who acts as a resource person for the agents so as to give them medical advice in respect to claims for sickness benefits.

These are not the only resources available to the agent for obtaining clarifications or additional information concerning a person's state of health. Consider the following provision of the Regulations Footnote 9 :

" . . the Commission may require a claimant to undergo a medical examination at such time and place as it may reasonably direct for the purpose of determining the nature of the illness, injury or quarantine, the physical and mental condition of the claimant, the probable duration of the inability to work and any other circumstances related to that inability."

A variety of situations may arise where such an independent medical examination will be considered necessary to counterbalance certain information already entered in the file, to dispel certain doubts as to a person's state of health or to help clarify cases of inability that are complex, ambiguous or contradictory.

The Commission has full authority to require a medical examination if it considers it appropriate to do so. This is a formal obligation for the claimant, and a failure to comply with this direction may be a ground for denying benefits.

The choice of the independent medical examiner rests with the Commission. However, considering the intimate nature of such examinations and the need for a relationship of trust between the claimant and the physician, the Commission will provide the choice of another medical examiner where the claimant objects to the first selection, unless the reasons invoked are frivolous or trifling.

It is reasonable to conclude that not all these means and resources will be used in every case. It will depend on the quality of the information gathered in relation to the first entitlement condition to fulfill.

24.13.5 Second entitlement condition: be otherwise working

Upon applying for sickness benefits, an individual must declare that, if not for their illness, they would otherwise be working in the normal activities of their business or normal activities which support the continuation of their business Footnote 10 .

For claimants in receipt of parental benefits, upon receipt of proof of incapacity, they will not be required to show they would otherwise be working in the normal activities of their business or normal activities which support the continuation of their business, nor that they have stopped working due to illness, injury or quarantine.

A person may wish to take advantage of a period of incapacity and, instead of doing nothing, signs up for a short-duration training course or spends the period of convalescence at a place away from home, such as a cottage or relatives' area of residence. It cannot be said in such situations, which would not have arisen had it not been for their inability to work, that the claimant has not proven that they would otherwise be working. However, this may not necessarily be said in the case of a stay outside Canada Footnote 11 .

There may be situations where self-employed persons have temporarily discontinued their self-employment and during this time are affected by illness, injury or quarantine and then make a claim for self-employment sickness benefits. Such persons cannot usually prove that they would be otherwise working unless their inability to work has delayed a planned return to their business activities. In this case, they may be able to demonstrate that they would be otherwise working if not for their incapacity, as of the original date set for their return to their business activities.

In a situation where a self-employed worker discontinued their self-employment altogether (through, for example, a sale or closure of the business or in the event of a bankruptcy) and subsequently filed for self-employment sickness benefits, the legislated otherwise working criteria would not be met. If not for their illness, individuals in these circumstances would not be working in self-employment or working by supporting the continuation of a business.

Self-employed individuals who carry out their self-employment entirely during certain periods of the year would not be able to meet the condition that they would otherwise be working were it not for their illness, injury, or quarantine during the times of the year when they would normally not do any work at all. This does not include periods when they would be performing the normal activities for the continuation of their business Footnote 12 .

Further, the otherwise working criteria is not met if the self-employed person alleges that they would be otherwise available for work, outside their self-employment, were it not for their illness, injury, or quarantine.

[ March 2013 ]

24.13.5.1 Otherwise working: supporting the continuation of a business

There may be periods in a business which could result in a slowdown or a temporary closure. In Canada, this is often the result of the dramatic seasonal weather variances we experience. However, despite a business' temporary seasonal slowdown or closure, self-employment activities often continue which support the continuation of the business Footnote 13 . Activities of this nature include: advertising, marketing, bookkeeping, human resources-related activities, making operational repairs or improvements to buildings and/or equipment, etc. This list is not exhaustive as the business-related activities required to support and sustain the business during a slow period or off-season are unique to each. Therefore, despite a slowdown or temporary closure in the business, if there were activities of this nature being conducted within the context of the self-employment at the time when the self-employed person became unable to work, it can be said that the self-employed worker, if not for their illness, would be otherwise working.

24.13.5.2 Otherwise working: imprisonment

The fact that a person is an inmate in a prison or similar institution will not be used against the claimant's assertion that they would be working in their business, if not for their illness, injury or quarantine, when they have been granted parole, day parole or temporary absence from incarceration for the purpose of working in their business. Sickness benefits will not be denied for the sole reason that the temporary absence has been suspended because the inmate is temporarily unable to work Footnote 14 .

The question is therefore directly related to the issue of otherwise working Footnote 15 . We are not unfamiliar with this question, as we are well aware that the second entitlement condition for a person who is unable to work is to demonstrate that they would be otherwise working in their business.

24.13.6 When out of Canada

It happens from time to time that a person who is temporarily unable to work plans to spend part of their convalescence in milder climates outside Canada or, conversely, that a person who is outside Canada suddenly becomes unable to work.

In this respect the Act has imposed rigorous provisions, which were adopted to avoid abuse and misuse of the EI fund. The Act provides as follows Footnote 16 :

"Except as may otherwise be prescribed, a claimant is not entitled to receive benefits for any period during which the claimant

  1. is not in Canada."

The prescription mentioned here is found in the following provision of the Regulations Footnote 17 :

"A self-employed person is not disentitled from receiving benefits for the reason that the self-employed person is outside Canada

  1. for the purpose of undergoing, at a hospital, medical clinic or similar facility outside Canada, medical treatment that is not readily or immediately available in the self-employed person's area of residence in Canada, if the hospital, clinic or facility is accredited to provide the medical treatment by the appropriate governmental authority outside Canada;…"

Thus, it can be said in general terms that a person must satisfy two specific conditions in addition to the two entitlement conditions to sickness benefits Footnote 18 . The person who is outside Canada must in fact be undergoing medical treatment in a hospital, medical clinic or similar facility located in a country other than Canada; and, the treatment as such must be medical treatment that is not readily available in the claimant's area of residence in Canada.

The Act leaves no room for other circumstances that could occur where a person might, for personal reasons or on the recommendation of a physician, have to stay outside the country, even with a medical certificate establishing the inability to work Footnote 19 .

The prescription is not limited to a person whose inability to work arose before their stay outside Canada. It also applies to a person whose inability to work arose while they were outside the country. Both must show that they satisfy the two conditions specified in the Regulations.

The question whether the person proves that they would be otherwise working is always relevant in such a case.

It must be understood that the person must undergo the treatment in a hospital, medical clinic or similar facility in a country other than Canada, and that it must be a medical treatment that is not readily available in the claimant's area of residence in Canada. It must not be a miracle treatment or any kind of cure that is claimed to be the panacea for all illnesses, but a treatment that, while not necessarily conventional, may be seen as being relatively effective and is recognized by a scientific or medical authority Footnote 20 .

There are several factors that might lead someone who is unable to work to undergo medical treatment in a country other than Canada. It might be due to, amongst others: the urgency of the situation as opposed to the immediate availability of the treatment in a Canadian health institution, the proximity of the residence to the treatment centre, the supposed quality of care, or the technological advancements and expertise of certain medical science authorities or clinics renowned for the treatment of certain illnesses or for certain procedures.

What is critical to determine is whether the treatment is a type that is not readily available in the claimant's area of residence in Canada. The agent will make that determination. It is not necessary that the claimant be hospitalized.

A facility outside Canada that offers a treatment prescribed in Canada is considered to be an accredited facility. The agent follows-up only when there is a reason to doubt the accreditation of the facility.

24.13.7 Sickness benefits within the maternity period

Pregnancy and childbirth are not, strictly speaking, an illness. This, however, does not necessarily mean that a woman who is pregnant or who has just given birth to a child cannot in some circumstances make a claim under the self-employment sickness benefit provisions.

A woman who is pregnant may choose and be entitled to self-employment sickness benefits during the maternity period Footnote 21 . Although pregnancy and childbirth are not considered to be illnesses, complications with respect to either may arise which makes sickness benefits the more appropriate benefit type. To receive sickness benefits the claimant must prove she is unable to work Footnote 22 because of complications due to her pregnancy or childbirth or because of an unrelated illness and that except for her incapacity, she would be otherwise working.

Once an inability to work (or an ability to work is considerably lessened) is proven, a claim is dealt with according to the principles applicable to any self-employed person requesting sickness benefits.

A pregnancy that is terminated within the first nineteen weeks of that pregnancy is defined as an illness for the purposes of the Act and must be treated as such Footnote 23 .

24.13.8 Payment of sickness benefits

24.13.8.1 Waiting period

Like all claims for self-employment special benefits, a waiting period Footnote 24 must be served before sickness benefits can be paid. However, the waiting period may be waived if, the claimant qualifies to receive benefits based on an interruption of earnings as described in EI Regulation 14.01 Footnote 25 and after the claimant ceased to work, allowances, payments or other moneys are payable to the claimant as sick leave pay Footnote 26 . In situations where the claimant works for more than one employer, if they were paid sick leave pay after ceasing work from one of these employers and had an interruption of earnings from the same employer, the conditions have been met to waive the waiting period.

[ June 2012 ]

24.13.8.2 Limits to the number of weeks of benefits payable

There is no guarantee that once the entitlement conditions for sickness benefits are met; they will be paid for an unlimited period of time as long as the claimant remains unable to work. The scope of payment which may be accessed due to illness is detailed in the legislation.

A person who qualifies for sickness benefits may receive them at any time during the benefit period. In this respect, the Act has placed specific limits on the payment of sickness benefits.

A first limit is defined in the following Footnote 27 :

". . . the maximum number of weeks for which benefits may be paid in a benefit period…

. . .

  1. because of a prescribed illness, injury or quarantine is 15."

However, this limit of fifteen weeks is not a maximum that is guaranteed in all cases even if a person proves that they are unable to work for a longer period of time.

24.13.8.3 Earnings while in receipt of sickness benefits

Any earnings received while in receipt of EI sickness benefits for the self-employed must be declared and will be deducted from benefits at a rate of 50 cents of EI benefits for every dollar earned or received while on claim, up to a maximum of 90 percent of the weekly earnings used to establish their EI benefit rate. Any earnings above this threshold are deducted dollar for dollar from benefits [EI Act 19(2)].

Detailed information on the rules regarding the deduction of earnings while receiving benefits can be found in Digest Chapter 1.9.8 – Earnings while on claim and on the Government of Canada website.

More information on earnings both from self-employment and insured employment with an employer is found elsewhere in this Chapter Footnote 28 and details on the treatment of income from self-employment during an EI claim is found in the chapter dealing with earnings Footnote 29 within the Digest of Benefit Entitlement Principles.

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