Digest of Benefit Entitlement Principles - Chapter 24

• 24.0   Introduction
  

• 24.1.0   Legislative authority
• 24.1.1   Part VII.1 of the Employment Insurance Act
• 24.1.2   Definitions 

24.0   Introduction

Traditionally, self-employed persons have not been eligible for any benefits offered through the EI program, if their main source of livelihood was determined to be one of self-employment.

Offering special benefits, however, provides self-employed persons with the choice to receive insurance targeted at life-changing events such as starting a family and coping with illness including the necessity to care for seriously-ill family members.

Accordingly, sickness, maternity, parental and compassionate care benefits are accessible to self-employed persons who have voluntarily registered into the EI program.

24.1.0   Legislative Authority

In December 2009, Bill C-56, the Fairness for the Self-Employed Act, received Royal Assent. The legislation extends access to Employment Insurance (EI) special benefits, which are maternity, parental, sickness and compassionate care benefits, to the self-employed on a voluntary basis.

24.1.1   Part VII.1 of the Employment Insurance Act

On January 1, 2010, the Fairness for the Self-employed Act came into force, amending the Employment Insurance Act to create Part VII.1, which outlines the special benefits for self-employed persons. In general, the language in the new provisions mirrors that used to describe special benefits in existing legislation, but new section 152.01(1)¹ defines several additional terms to be used. These broad definitions are meant to encompass a wide range of self-employed EI applicants, and are detailed below.

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1. EIA 152.01.

24.1.2   Definitions

Note: The following definitions are exclusively for the application of Part VII.1 of the EIA.

Self-employed Person: A self-employed person is someone who is engaged in a business; or is employed by a corporation and is not eligible to participate in the regular EI program because they control more than 40 per cent of the voting shares of that corporation¹.

Business: business includes all undertakings of any kind except one of holding an office or employment².

Interruption of Earnings: An interruption of earnings for a self-employed person occurs at the beginning of the week during which an individual reduced the time normally devoted to their self-employment activity by more than 40 per cent³.

Otherwise Working: If not for their illness, injury or quarantine, a self-employed person would be otherwise working in the normal activities of their business or in the normal activities for the continuation of their business⁴.

Premiums: annual premiums become payable by self-employed persons upon registering for self-employment special benefits. The premiums amount payable is the same as the employee share paid by regularly insured workers; they are not required to pay the employer portion as they have to if they hire employees. The premium payment amount is lower for self-employed residents of the province of Québec who register with the EI program. This is due to the fact that provincial premiums are paid by residents of Québec for the purposes of receiving maternity and parental benefits⁵.

Week of Unemployment: A week of unemployment for a self-employed person is a week in which they experience a reduction of more than 40 per cent in the time they would normally devote to their business activities⁶.

Maximum Yearly Insurable Earnings: The maximum yearly insurable earnings (MIE) equal the income level up to which EI premiums are paid by an employee or a self-employed person. It determines the maximum rate of weekly benefits paid for all types of benefits under the EI program⁷.

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1. EIA 152.01 "self-employed person";
2. EIA 152.01 "business";
3. EIR 14.01;
4. EIA 152.03(1);
5. EIA 152.21 "premium";
6. EIR 30.1;
7. EIA 152.21(2)(b).