Updated September 24, 2020
As the CERB winds down on October 3, 2020, Canadians who had to or have to stop working will be a transitioned to a new employment insurance (“EI”) system for EI regular benefits.
In short, the new EI program for regular benefits will be easier to qualify for and it will provide more money for a longer period of time to many workers as compared to the old EI system.
The big changes to the new EI system will be that:
- Individuals will only need 120 hours of insurable earnings to qualify for EI
- The minimum amount of money individuals can receive will be $500 per week on EI
- All eligible individuals will qualify for at least 26 weeks of EI regardless of where they live
Insurable Earnings Requirement Change
It used to be that to be eligible for EI regular benefits, individuals needed a certain number of insurable hours of employment. This was known as the “qualifying period”. Each region in Canada had different qualifying period requirements. In prosperous regions, individuals needed to have worked 700 hours in the last calendar year, but in less prosperous regions, individuals only needed to have worked 420 hours in the last year to qualify for EI.
Read about the old EI system here.
The new EI system will be such that all individuals will only need 120 hours of insurable employment in the last 365 days, which is a major difference between needing 700 hours to qualify for EI under the old system. This means that an employee needs to only have worked around twenty 8-hour workdays (or about one month in actual time in most cases) before he or she is able to qualify for the new EI instead of almost six months.
If an individual lacks 120 hours of insurable employment, they may be entitled to the Canada Recovery Benefit (“CRB”) if they earned at last $5000 in 2019 or in the last year before their application for the CRB.
New EI Minimum Payment
All individuals will earn at least $500 per week on the new EI system.
It used to be that EI would provide all individuals with exactly 55% of their earnings up to a maximum of $573 a week. For example, if you made $800 per week, you would only be entitled to $440 in EI benefits. Likewise, if you made $300 per week, you be entitled to $165 in EI. However, with the new EI system, all individuals will be entitled to $500 per week even if they did not make enough income to hit that threshold amount.
For any individuals would have earned more than $500 per week on the old EI system, they will continue to earn that higher amount on the new EI system. For example, if you made $5,000 per week and lost your job, you would be entitled to $573 in EI regular benefits per week under the new EI system and the old EI system.
New EI Minimum Number of Weeks
All individuals will be entitled to at least 26 weeks of EI under the new EI system.
It used to be that individuals could only get EI for anywhere from 14 weeks up to a maximum of 45 weeks depending on the unemployment rate in their region and the number of insurable hours they’ve accumulated in the last year.
However, under the new EI system, all individuals will be entitled to at least 26 weeks of EI.
For anyone who lives in a region that would have paid more than 26 weeks of EI, they will still be entitled to that higher amount.
Who is Entitled to the New EI?
EI is money from the federal government paid to eligible employees who stop working through no fault of their own (i.e. a termination without cause or a temporary layoff).
An individual is eligible to receive EI regular benefits if:
- They were employed in insurable employment (i.e. they were an employed person, not a self-employed person, and they paid EI premiums);
- They lost their job through no fault of their own;
- They are without work and without pay for at least seven days in a row the last calendar year.
- They worked for the required number of insurable employment hours (which is now 120 hours) in the last calendar year or since the start of their last EI claim, whichever is shorter;
- They are ready, willing and capable of working each day;
- They are actively looking for work.
How Long Will This New EI Last?
These change to EI system are planned to last one year (October 2020 to October 2021). It is assumed that after one year, the EI system will revert back to the old one (so long as Covid-19 is under control and economy improves by that time).
How to Apply for the New EI?
Service Canada, not the CRA, will administer the new EI.
Individuals who are currently receiving the CERB from the CRA who want to apply for the new EI will need to apply through My Service Canada after September 26. If they are already receiving the CERB through a My Service Canada account already, they should log in and click the button to apply for EI after September 26.
Click here to apply online for the new EI here on My Service Canada.
Make sure you apply within four weeks after your employment is terminated or you are temporarily laid-off or you could lose benefits if you do not apply in time.
Do not wait for a severance package. However, know that severance will affect your EI entitlements if you get severance after you receive EI benefits. Read more here.
You can apply for EI regular benefits even if you have not yet received your Record of Employment (ROE). Your employer will have to submit an ROE to Service Canada on your behalf after you stop working. Most employers submit ROE’s electronically to Service Canada. If an employer submits an ROE electronically, it does not need to send the employee a copy. Click here to read what happens in case an employer is late submitting the ROE.
When will the first EI payment arrive?
As was the case for EI before COVID-19, individuals become eligible for their first new EI payment at the end of the two week period that they are out of work. This means, for example, that those switching to EI from CERB effective September 27, 2020, will be eligible for their first EI payment as of October 11.
Over 80% of eligible Canadians are expected to receive their [new EI] payment by October 14 – 3 days after becoming eligible, and over 90% are expected to be paid within 3 to 14 days.Government of Canada September 25, 2020 Bulletin
Note: You can read more about the new EI system straight from the government source here.
Jeff is a lawyer in Toronto who works for a technology startup. Jeff is a frequent lecturer on employment law and is the author of an employment law textbook and various trade journal articles. Jeff is interested in Canadian business, technology and law, and this blog is his platform to share his views and tips in those areas.