EI special benefits for self-employed people: Overview
If you have stopped working because of COVID-19, the Canada Emergency Response Benefit (CERB) may provide you with temporary income support.
Self-employed Canadians can access Employment Insurance (EI) special benefits by entering into an agreement, or registering, with the Canada Employment Insurance Commission. There are 6 types of EI special benefits:
- Maternity benefits are for people who are away from work because they’re pregnant or have recently given birth (up to 15 weeks).
- Parental benefits are for parents who are away from work to care for their newborn or newly adopted child. When applying for parental benefits, you need to choose between 2 options: standard or extended.
- Up to 40 weeks of standard parental benefits can be paid to parents sharing benefits, but one parent cannot receive more than 35 weeks. If parents share benefits, they must choose the same option.
- Up to 69 weeks of extended parental benefits can be paid to parents sharing benefits, but one parent cannot receive more than 61 weeks. If parents share benefits, they must choose the same option.
- Sickness benefits are for people who cannot work due to injury, illness, or the need to be isolated in quarantine because they may be carrying a disease (up to 15 weeks).
- Compassionate care benefits are for caregivers who must be away from work temporarily to provide care or support to a person who is seriously ill with a significant risk of death (up to 26 weeks). The 26 weeks of benefits can be shared between different caregivers who applied and are eligible to receive them.
- The family caregiver benefit for children is for caregivers who must be away from work to provide care or support to a critically ill or injured child under 18. Either one or more caregivers can share up to 35 weeks of benefits between them.
- The family caregiver benefit for adults is for caregivers who must be away from work to provide care or support to a critically ill or injured adult. Either one or more caregivers can share up to 15 weeks of benefits between them.
Currently, if you are a self-employed person in Quebec, you are already entitled to apply for maternity, paternity, and parental benefits through the Quebec Parental Insurance Plan. If you choose to register with the Canada Employment Insurance Commission, you will be eligible to apply for EI sickness, compassionate care and family caregiver benefits.
You can register, with the Canada Employment Insurance Commission through Service Canada if you:
- operate your own business, or if you work for a corporation but cannot access EI benefits because you control more than 40% of the corporation’s voting shares
- are either a Canadian citizen or a permanent resident of Canada
Note: Some individuals who work independently and are not hired as employees cannot register for these EI special benefits because they are already eligible to receive benefits through the regular EI program: barbers, hairdressers, taxi drivers, drivers of other passenger vehicles who are not hired as employees but whose employment is insurable under the EI Regulations, and fishers who are included as insured persons under the EI Fishing Regulations.
As a self-employed individual, you have to register online with the Canada Employment Insurance Commission to participate in the EI program. To do so, you will need a My Service Canada Account which you can access online from home, at any Service Canada Centre using one of the many Internet kiosks available, or at a public Internet access site in your community, such as a public library. From the “On-line Services and Forms” menu on the right-hand side of the page, click on “Access My Service Canada Account” and follow the instructions. After you register, we will mail you a personal access code within 10 days.
If you already have a My Service Canada Account, simply login using your existing user code and password, and select the “Employment Insurance for the Self-Employed” option on the main page to begin the registration process.
Your participation in the EI program will last for the entire duration of your self-employed career, regardless of any change in the nature of your self-employment. You may cancel your registration if you have never received EI special benefits as a self-employed person; however, there are specific criteria for this process.
Applying for EI Special Benefits
You have to wait 12 months from the date of your confirmed registration before applying for EI special benefits.
Payment of EI premiums
Once you receive notification that your registration was successful, your EI premiums will be calculated based on your income tax and benefit return for that year. For example, if you register in 2020 to participate in this program, EI premiums will be calculated based on your 2020 income tax and benefit return and will be payable by April 30, 2021. After that, if you pay your income tax by instalments to the CRA, EI premiums may be included in your instalment payments.
Regardless of when you register during a given year, EI premiums are payable based on your self-employed income for the entire year.
Calculation of EI premiums
In 2020, for every $100 you earn, you will need to contribute $1.58 in EI premiums up to a defined maximum—the same amount that employees pay. This means the most you will pay in EI premiums for 2020 is $856.36.
Since Quebec has its own parental insurance program that offers maternity and parental benefits, EI premiums have been adjusted accordingly for that province. In 2020, self-employed people in Quebec who register for the EI program will pay $1.20 for every $100 of earnings, up to a total of $650.40 for the year.
EI premiums are calculated by the Canada Revenue Agency (CRA) based on your self-employed earnings, as calculated under the Income Tax Act.
If you are a shareholder of a corporation and you control more than 40% of that corporation's voting shares, the CRA will calculate your EI premiums based on the amount of what would have been your insurable earnings from that employment if the earnings had been insurable.
Unlike the regular EI program, and because you are self-employed, you will not have to pay the employer's portion of the EI premium.
Cancelling or terminating your participation
Once you have registered to participate, you have 60 days in which you may cancel your participation without having to pay any premiums.
After this 60-day period, you may still terminate your participation if you have never received EI special benefits as a self-employed person. In other words, after you receive EI special benefits, your participation will continue and you will have to continue to pay EI premiums for the entire duration of your self-employed career, regardless of any change in the nature of your self-employment.
Note: you will not receive a refund of any EI premiums.
Instructions on how to cancel or terminate your participation are available from My Service Canada Account. You will have to notify the Canada Employment Insurance Commission by filing a notice of termination.
Official termination date
Termination is not immediate: Your participation in the EI program will be officially terminated on December 31 of the year in which you file a notice of termination. This means that regardless of the date you file the notice of termination, you must pay EI premiums on your self-employment income for the entire calendar year.
Withdrawing a notice of termination
Your access to EI special benefits continues until the end of the calendar year in which you file your notice of termination, so you may still apply for and receive EI special benefits during that period. For example, if you file a notice of termination on April 18, 2020, and you then become sick, you may still apply for and receive EI sickness benefits in September 2020. Your notice of termination will automatically be withdrawn because you are receiving benefits, and your participation in the EI program, including paying your EI premiums, will continue for the duration of your self-employment career.
As outlined in the eligibility information, there are certain criteria that must be met in order to be considered eligible for EI special benefits.
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