Section 5: Protecting Employment Insurance—with your help
Service Canada works to protect the EI program from misuse. One of the ways we do this is by working with employers and claimants to ensure the accuracy of the information we receive. With your help, we can reduce the amount of misuse and ensure that the EI program is used as it should be—as a program that provides temporary financial assistance to Canadians.
What is a mistake?
A mistake is an unintentional act. We know claimants can make mistakes when filing their reports. Common mistakes include:
- estimating weekly earnings instead of putting in the actual amount earned;
- forgetting to declare all the earnings received;
- writing or entering the wrong number when reporting earnings; or
- adding the number of hours or amount of earnings incorrectly.
Some mistakes can delay benefit payments, while others can affect the amount of benefits you receive—meaning you were paid more or less than you were entitled to receive.
For example, estimating your earnings can have the following effects:
- If you estimated your earnings in any one week and your estimate was higher than the earnings you actually received, your benefit amount will be less than it should have been. Let us know if this happens. We will adjust your file and ensure that you receive all the benefits to which you are entitled.
- If you estimated your earnings in any one week and your estimate was lower than the earnings you actually received, your benefit amount will be higher than it should have been. Let us know if this happens. You will have to repay the excess amount, but we will ensure that this causes no undue hardship. As well, we will adjust your file to reflect your accurate information.
If you notice a mistake on a completed form or report, or if there is a change in your circumstances that could affect your EI claim, tell Service Canada immediately. This will help prevent any future problems with your claim.
Absence from Canada
Usually, you cannot receive EI regular benefits while outside Canada. (For exceptions, see "Am I allowed to leave Canada while receiving regular benefits?" in Section 4.) One measure we take to enforce this rule is to compare EI information with information from the Canada Border Services Agency. If we find you have been out of the country while collecting regular benefits, we will try to determine whether you are entitled to those benefits. If not, we will calculate your overpayment, which you will then have to repay.
We may also impose penalties of up to three times your weekly benefit rate or three times the amount of your overpayment. As well, you may have to work more hours to qualify for regular benefits in the future.
If you knowingly withhold information, make misleading statements, or misrepresent the facts to make a false claim for benefits, this is considered misrepresentation. You could face severe monetary penalties or prosecution. This could also affect your future benefits. However, if you disclose your actions to Service Canada before an investigation begins, we can waive any monetary penalties and prosecutions that might otherwise apply.
Consequences of misrepresentation: Interest and penalties
Interest on debt
When EI claimants receive benefits to which they are not entitled, the amount of the overpayment counts as a debt that must be repaid.
Service Canada charges interest on this debt when it results from claimants who knowingly omit information or make false or misleading representations or statements. However, we do not charge interest on debt that results when Service Canada makes an error in the benefit payment.
The rate of interest is the Bank of Canada average rate plus 3 percent. Interest is calculated daily and compounded monthly.
A penalty may be imposed on a claimant, an employer, or an individual acting on their behalf in relation to a claim for benefit, when he or she has:
- knowingly made false or misleading representations or statements; or
- completed a statement without declaring essential information.
Here is an example of a situation where penalties may be imposed:
An EI benefit claimant goes on an ocean cruise for a month and arranges for a friend to conceal their absence by signing and returning two EI claimant reports. As a result, the claimant illegally received $350 in benefits for each of the four weeks of the cruise. After investigation, we find that this was the first time the claimant and the friend had misused the EI system. As well, we find that they both knew that what they did was illegal but they did it anyway.
In this case, the claimant would have to repay $1,400 (four weeks of benefits at $350 per week) and may have to pay a penalty of $700 ($350 for each of the two false reports filed during the holiday). The friend may also have to pay a penalty of $700 for the illegal act of filing two false reports on behalf of the claimant.
There are many situations where a penalty can apply, and the amount can become very high. Depending on the circumstances, the maximum penalty can be up to three times the amount of the overpayment, three times the weekly benefit rate for each incident of misrepresentation, or three times the maximum benefit rate in effect at the time.
Deliberate misuse of the EI program can also result in a violation. With a violation, claimants will need more insurable hours to qualify for benefits in the future. The required number of insurable hours to qualify rises based on the seriousness of previous incidents of misrepresentation. The amount of the penalty will also depend on the amount of the overpayment and the number of previous incidents of misrepresentation.
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