Working While on Claim
Table of Contents
Did you know that you can work while receiving EI benefits? The Employment Insurance (EI) Working While on Claim pilot project is a way to help you keep more weekly income and stay connected to the labour market.
The pilot allows you to keep receiving a portion of your EI benefits along with all earnings from your job. From August 7, 2016 until August 11, 2018Footnote 1, it offers you a choice of two options to better support your job prospects.
The pilot applies to any EI claimant who earns money while collecting one of the following types of EI benefits:
- regular benefits
- fishing benefits
- parental benefits
- compassionate care benefits
- benefits for parents of critically ill children
How it works
If you are collecting regular, fishing, parental, compassionate care or parents of critically ill children benefits, and have a chance to pick up part time or occasional work, you have a choice of two options to better support the work you do while on claim.
What are the options?
Under the “default rule,” you keep 50 cents of EI benefits for every dollar you earn in wages, up to a maximum of 90% of your previous weekly earnings (or, roughly four and a half days of work)Footnote 2. Above this cap, benefits are reduced dollar-for-dollar. The “default rule” will automatically apply to your claim.
Otherwise, you can choose the “optional rule”. It allows you to keep the equivalent of up to roughly one day’s work (defined as $75 or 40% of your benefit rate, whichever is greater) without any deduction from your benefits. Any amount earned above the equivalent of roughly one day’s work will be deducted dollar-for-dollar from your benefits.
You are strongly encouraged to make the choice near the end of your claim. At this point, more complete information about your specific circumstances and work pattern is available, making it easier to know which option would benefit you the most.
John got laid off when the grocery store where he was working shut down. His weekly earnings at the grocery store were $500, so his weekly EI benefits are $275. He then finds a part-time job at a local deli where he works three days a week and earns $300 per week.
Automatically under the “default rule”, he is allowed to keep 50 cents of EI benefits for every dollar he earns, so he takes home $425 per week in combined EI benefits and wages ($125 of EI benefits + $300 in wages).
If he chooses the “optional rule”, he can earn the greater of $75 or 40% ($110) of his benefit rate without any deduction from his benefits (anything above that amount is reduced dollar-for-dollar). Since John earns $300 per week, his benefits are reduced by $190. Under the “optional rule”, he would take home $385 per week in combined EI benefits and wages ($85 of EI benefits + $300 in wages).
In this example, John would be better off with the “default rule” since he takes home $40 more per week than with the “optional rule”.
Melissa got laid off when the construction company where she was working lost a major contract. Her weekly earnings averaged out to $800, so her weekly EI benefits are $440. She then finds a part-time job at another construction company where she works one day and earns $160 per week.
Automatically under the “default rule”, she is allowed to keep 50 cents of EI benefits for every dollar she earns, so she takes home $520 per week in combined EI benefits and wages ($360 of EI benefits + $160 in wages).
If she chooses the “optional rule”, she can earn up to the greater of $75 or 40% ($176) of her benefit rate, without any deduction from her benefits. Since she only earns $160 per week from her work while on claim, she can keep all of her EI benefits. Under this option, she would take home $600 per week in combined EI benefits and wages ($440 of EI benefits + $160 in wages).
In this example, Melissa would likely choose the “optional rule” if she never worked more than one day per week as she takes home $80 more per week.
You do not need to apply to the Working While on Claim pilot project, as the “default rule” will apply to your claim automatically. Under this option, you file weekly reports and declare your earnings on-line. If, at the end of your claim, you weren’t able to work as much as you thought, you should contact Service Canada to verify which option would be most beneficial to you. If you decide that you would be better off under the “optional rule,” you can request the “optional rule” be applied to you claimFootnote 3 with the difference between the options refunded to you.
You can also select the “optional rule” earlier in your claim. However, if you choose this option, you will be required to complete paper bi-weekly reports which must be returned by mail and could lead to delays in payment. Should you select the “optional rule,” it applies to your entire claim for weeks effective August 7, 2016 or later, and it cannot be reversed for that claim.
Say Melissa, in example 2, chose the “optional rule” at the beginning of her claim as she assumed she would be working one day or less per week. After working about one day a week for the first three weeks of her claim, Melissa’s previous employer calls her back to work three days a week instead of the one day a week. Melissa now earns $480 per week.
Under the automatic “default rule” she would be taking home $680 per week in combined EI benefits and wages ($200 of EI benefits + $480 in wages). Instead, because she is locked into the “optional rule” (40%/$75) she is only able to take home $616 in combined EI benefits and wages ($136 of EI benefits + $480 in wages). In this example, Melissa is worse off by $64 per week with the “optional rule.”
If you work a full work week, you will not receive any EI benefits, regardless of the amount you earn. However, this will not reduce the total number of weeks payable on your claim.
The “optional rule” does not apply to claimants receiving special benefits for self-employed persons. Only the “default rule” is available.
If you are receiving EI sickness benefits or EI maternity benefits, this pilot does not apply to you. Any earnings you have will continue to be deducted dollar for dollar from benefits.
What if I work or live outside Canada?
If you are living in the United States and worked in Canada, or if you crossed the Canada–United States border between your residence and workplace and you are receiving EI benefits, this Working While on Claim pilot project could also apply to you. Visit the Employment Insurance and Workers and/or Residents outside Canada Web page for more information.
- Footnote 1
During this period, the new Working While on Claim pilot project will help gather information for potential permanent changes to EI rules.
- Footnote 2
More precisely, the cap is defined as 90 per cent of the weekly insurable earnings used to calculate the EI benefit rate.
- Footnote 3
Claimants must make their request to revert to the “optional rule” by the earlier of 30 days after the end of their claim or August 11, 2018.
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