Premium Reduction Program exception

Is your employer registered in the Government of Canada's Premium Reduction Program (PRP)? Employees who become ill or injured need to first make use of their employer's sick leave plan before accessing EI benefits.

Once the wage loss indemnity (WLI) or paid sick leave (PSL) payments end, you may be entitled to receive EI benefits.

Under the PRP, employers who offer a short-term disability plan that meets or exceeds what EI sickness benefits provide can apply to have their EI premiums reduced below the standard employer rate. This is because employees covered by such a plan may not have to collect EI benefits or they may collect them for a shorter time. If you receive both EI sickness and WLI or PSL payments at the same time, all your earnings are deducted from your EI payments, rather than at the usual 50 cents per dollar rate.

If your employer is not part of the PRP and you receive WLI or PSL and EI sickness benefits, the default 50 cents for every dollar earned rule will apply.

Example 1 (employer registered in Premium Reduction Program)

Samir fell and broke his arm and had to stop working to recover from his injury. He applied for EI sickness benefits but he also has some accumulated paid sick leave from his employer. His normal weekly earnings are $600, so his EI benefit rate is $330 per week (55 percent of $600).

Samir’s employer is registered in the Premium Reduction Program and pays him five days of paid sick leave.

Samir will not get any EI sickness benefits during his first week off work.

He will start receiving EI sickness benefits in the second week of his claim.

Example 2 (employer not registered in Premium Reduction Program)

Maria got sick and had to stop working to recover from her illness. She applied for EI sickness benefits but she also has paid sick leave from her employer. Her normal weekly earnings are $850, so her EI benefit rate is $468 per week (55 percent of $850).

Maria's employer is not part of the Premium Reduction Program and pays her two days of paid sick leave ($340).

Because her employer is not part of the PRP, the default rule applies to Maria. She is allowed to keep 50 cents of EI benefits for every dollar she receives in sick leave ($340 ÷ 2 = $170). Maria will receive a partial payment of $298 in EI sickness benefits for the first week of her claim: $468 – $170 paid sick leave = $298 EI benefits payable. Maria may also choose to receive her employer benefits first before applying for EI if she needs a longer recovery.

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