Employment Insurance Regulations - Amendments

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Description 

The modifications bring about minor changes to the Employment Insurance Regulations (EI regulations) and introduce a new pilot project under the authority of section 109 of the Employment Insurance Act (EI Act).

The purpose of the pilot project is to assess the impact of a new approach aimed at improved harmonization of the EI program with provincial programs that offer indemnity payments to workers who must cease work because continuing to work would entail physical danger to themselves or to their unborn child or to the child they are breast-feeding (hereinafter called indemnities for preventative withdrawal). Under the current Employment Insurance legislation, the payment of these indemnities may sometimes impact negatively on future payment of maternity and parental benefits.

Minor modifications

The minor modifications are intended to clarify the wording of subsection 35(4) and paragraph 39(3)(a) of the EI regulations to remove any ambiguity. The new wording reflects the interpretation that has been given to these Regulations since they were last amended in 1996.

The modification to subsection 35(4) of the EI regulations clarifies that indemnity payments for preventative withdrawal do not prevent an interruption of earnings. This provision allows claimants to establish a benefit period even if these indemnities must be deducted from benefits. The amendment to paragraph 39(3)(a) of the EI regulations clarifies that indemnity payments for preventative withdrawal are not earnings to be taken into account in the waiting period.

Pilot Project

The new section 77.1 of the EI regulations establishes the regulatory structure for the implementation of a pilot project to assess the impact on future payments of maternity and parental benefits when a claimant chooses not to receive EI benefits while in receipt of indemnity payments for preventative withdrawal.

The pilot project will start on the date of registration of the new regulation and will have a three-year duration. This is a national pilot project although at the present time, Quebec is the only province providing such indemnification to individuals working in Quebec wherever they may reside.

Background

Maternity and parental benefits are subject to conditions that are inherent to an insurance scheme such as the EI program. One of these conditions is the length of the benefit period, which is normally not more than 52 weeks. Therefore, a claimant is limited to this 52 week period to claim the 50 weeks of maternity and parental benefits provided for in the EI legislation.

Generally, individuals who paid EI contributions can receive all 50 weeks of maternity and parental benefits within the normal 52-week duration of their benefit period. However, those who already have a benefit period in effect and receive indemnity payments for preventative withdrawal during their pregnancy may not be able to claim the 50 weeks of benefits to which they are entitled within the normal 52-week benefit period. To resolve this situation, the EI Act provides for some exceptions where a benefit period can be extended. The receipt of indemnity payments for preventative withdrawal is one of these exceptions.

However, an extension of the benefit period can only be granted where no EI benefits were payable during the period for which an extension is requested. For the vast majority of claimants, the amount of indemnification for preventative withdrawal prevents all payment of EI benefits and therefore an extension of the benefit period can be granted. The problem arises when the amount of the indemnity is not high enough to prevent the payment of EI benefits. The benefit period cannot be extended as the basic condition for granting an extension is not met. Therefore the duration of the benefit period is limited to 52 weeks. This could cause a considerable loss of EI benefits since claimants could not access all the maternity and parental benefits to which they could otherwise be entitled.

The regulatory amendment is required for implementation of the pilot project by allowing flexibility around the rules for the extension of the benefit period.

The pilot project will apply to claimants who:

• have an existing benefit period at the time of the project or establish a benefit period during the project;

• are entitled to receive preventative withdrawal payments during the benefit period and,

• the amount of the indemnification would not prevent the payment of EI benefits.

Alternatives

Administrative and regulatory corrective actions were considered but were rejected since they would not entirely resolve the problem. To achieve this, a legislative modification would be required. Given the complexity of the interrelationship between the EI program and the indemnification for preventative withdrawal offered under a provincial system, it is appropriate to assess the effectiveness of the proposed solution by means of a pilot project.

Benefits and Costs

The pilot project will help ensure that the proposed solution achieves its objective without having unfavourable effects on other claimants who are in receipt of indemnity payments for preventative withdrawal.

The cost of additional EI benefits paid for the three-year duration of the pilot project is estimated at $1,326,000, funding will be from the EI Account. The administrative costs related to the implementation and evaluation of the pilot project are estimated at $653,000 and will be absorbed by the Department.

There is no additional cost associated with the minor modifications to subsection 35(4) and paragraph 39(3)(a) of the EI regulations.

Consultation

These Regulations were prepared by Insurance Policy in consultation with Strategic Policy, Legal Services, Insurance Program Services and Systems at Human Resources Development Canada (HRDC) National Headquarters and the Department of Justice. All parties support the proposal presented in the attached schedule. This proposal has been approved in principle by the Canada Employment Insurance Commission.

Compliance and Enforcement

HRDC's existing compliance mechanisms will ensure that these provisions are properly implemented. During the last year of the pilot project, an evaluation will be conducted to assess the impact and the effectiveness of these modifications on the EI program.

Contact

Stéphane Tremblay
Senior Policy Advisor
Policy and Legislation Development, Insurance
Human Resources Development Canada
140 Promenade du Portage, 9th Floor
Ottawa, Ontario
K1A 0J9
Telephone: (819) 997-8600
FAX: (819) 953-9381