Digest of Benefit Entitlement Principles  Chapter 5 - Section 1

In this chapter, the term "earnings" always refers to moneys that have already been determined to be earnings pursuant to Employment Insurance Regulations (EIR) 35.

5.1.0 Overview

Budget 2021 measures alert – Temporary measures are in place from September 26, 2021 to September 24, 2022 which affects the following information:

  • earnings paid due to separation from employment are not deducted from benefits

The Employment Insurance Act (EIA) is an insurance plan under which beneficiaries are provided with monetary assistance when they become unemployed and suffer a financial loss. Once a claim is established, claimants must demonstrate that each week of benefit claimed is a week of unemployment and that no circumstances or conditions exist that would disentitle or disqualify them from receiving benefits.

One of the circumstances or conditions that would reduce benefits payable is the receipt of moneys or non-pecuniary (non-monetary) benefits that are considered earnings for EI purposes. Any compensation received for the loss of employment, as well as any wages, salary and any other pecuniary or non-pecuniary benefits related to, attached to, or arising out of employment, reduces or nullifies the financial loss incurred by the claimant. In order to prevent double indemnification, these benefits and advantages will be deducted from EI benefits.

This chapter discusses the determination and allocation of earnings to be deducted from EI benefits. Other impacts of earnings on a claim for benefits can be found in other chapters of this Digest (Digest Chapter 1, Digest Chapter 2).

Determining that moneys are insurable is different than determining whether they are earnings for the purposes of paying EI benefits. Therefore, the earnings provisions covered in this chapter are not relevant to whether or not earnings are insurable (EIA 90). As well, the treatment of moneys under the Income Tax Act, or any other legislation, does not have any bearing on whether earnings are allocated under the EI legislation.

There are special provisions in place for the consideration of earnings while a claimant is participating in the Work-sharing program (EIA 24; EIR 47; Digest Chapter 25).

5.1.1 Proof

The onus is on claimants to disclose and describe all moneys, as well as all non-monetary benefits received, for a period for which benefits are claimed. Very strong evidence would be required to rebut earnings information obtained from the claimant’s employer's payroll records, especially where the claimant failed to fully disclose the earnings at the proper time (CUB 37085). When the claimant refuses or fails to provide all the information requested by the Commission that may be needed for a proper determination and allocation of earnings, the Commission will accept amounts that appear reasonable as earnings or expenses. If this is not possible, and in the absence of the requested information from the claimant, a disentitlement will be imposed. If the existence of an interruption of earnings cannot be proven, the claim will not be established.

5.1.2 The role of the Commission

The Commission's role is to determine:

  1. what moneys are earnings within the meaning of the EI Act and Regulations (Digest 5.2.0)
  2. when the earnings are paid or payable (Digest 5.6.1)
  3. why the earnings are paid or payable (that is, the reason for the payment), and
  4. the start date of the period to which the earnings will be allocated (Digest 5.6.0)

In order to make these determinations, the true nature of the payments must be established. When doubt exists about the true nature of a payment and the claimant has been unable to provide this information, the Commission will assist the claimant in obtaining or clarifying the evidence by contacting the employer or any other party.

Claimants frequently contact the Commission to determine what effect the payment of moneys will have on their claim for benefits. When claimants make personal choices regarding moneys based on incorrect information provided or action taken by the Commission regarding their earnings, there could be negative results to the claimant. In these situations however, claimants cannot obtain relief from those results based on the fact they were given incorrect information; the legislation governing the determination and allocation of earnings must be applied (FCA A-2-05, CUB 62223).

In all cases, the primary question to satisfy when considering the impact of moneys on the payment of EI benefits is why those moneys are paid. It is crucial that all facts and evidence concerning the moneys and why they are paid, be obtained before a decision is made. This is particularly of consequence in unusual or unique situations.

[April 2021]

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