Individuals should apply for employment insurance (“EI”) as soon as they stop working. There is no good reason to wait to apply for EI.
Here are seven good reasons why you should apply for EI as soon as you leave your employment
1. For one, your employer does not need to complete your Record of Employment before you can apply for EI. You can begin the application before your employer completes the ROE. Most employers submit an electronic ROE on your behalf within a few days after you leave employment. Read about what happens if your employer is late submitting your ROE here.
2. Second, the faster you apply for EI, the faster you will begin to receive the benefit. Most individuals receive their first EI benefit payment about 28 days (this number is not precise) after they apply if they are approved. Therefore, starting the application sooner rather than later can mean your income is less disrupted and you can better avoid dipping into your savings or credit.
The 28-day estimate to receive EI monies includes a mandatory one-week waiting period deductible. Thus, the 28-day estimate is essentially all the time it takes you to apply for EI + the time it takes Service Canada to review and approve your application + the waiting period deductible + the time it takes Service Canada to send your money.
If your case is taking longer than 28 days to get EI after you first apply, call Service Canada. Do not wait and hope they move quickly on their own. If you call and speak with a Service Canada agent they could diagnose a problem in your application or resolve one, expediting your case immediately.
3. Third, applying for EI early is prudent because there is a time limit for applying for EI. For your EI application to be considered on time, you must apply within four weeks after you lose your job. If you are late to apply for EI, your benefits may be cut short by every week you are late. There are rare exceptions to this rule.
4. Fourth, applying for EI takes a couple of hours. So it is best to get it over with quickly instead of procrastinating. When you apply for EI, you will have to answer many questions and gather lots of information that could take a while to retrieve and organize. Moreover, if your EI application is complicated because your employer alleged you quit or were fired for cause and you disagree with their position, then you will need to prepare extra supporting documents to show you are eligible for EI because you lost your job through no fault of your own.
Read More: EI Payment Dates in Canada
5. Fifth, although the Federal Government says it does its best to try and get your funds within about 28 days after applying for EI, if there is a sudden downturn in the economy like in March 2020 again, Service Canada could be overwhelmed and your case could take longer to approve.
6. Sixth, you do not need to sort out and settle your severance package before you apply for EI. Whether or not you receive(d) severance does not affect your application or deadline to apply for EI.
If you have accepted and received a severance package before you get your first EI payment, then EI payments will only begin after your severance package expires (severance is calculated in units of time akin to “pay in lieu of notice of termination”). On the other hand, if you have not received your severance package by the time you begin receiving EI funds, and you get severance weeks or months later, then EI will temporarily stop and you may have to pay back the funds you received during the period your severance package covered (many severance packages settlements have a stipulation for remitting such funds automatically).
However, in both cases, you will be granted additional eligibility time for EI after your severance package expires if you are still unemployed.
In short, severance does not limit how long you can receive EI, it just temporarily pauses it. For example, if you are approved for eight months of EI, but you receive twelve months’ worth of severance, then you are only entitled to eight months of EI after twelve months since you were terminated if you are still unemployed. The major criticism of this is that many employees with large severance packages never get to use their EI (that they paid for their whole career) because they usually find a new job before their severance package period ends.
Read More: How Severance Pay Affects EI
7. Lastly, you should apply for EI as soon as your employment ends because that way, you get the maximum benefit before you find another job. You paid for and supported EI for your whole career, and you should be able to reap your benefit. Keep in mind that when you find a new job, generally EI ends. Therefore, the sooner you get EI, the more money you receive before you find another job. To put it into perspective, if you are a month late to apply for EI, and you get a job three months after you lost your job, you will get a month’s less pay (in the form of EI) just because you were late to apply for EI.
EI Quick Summary
EI provides temporary income to individuals who lose their job through no fault of their own. The EI program also provides special benefits to individuals who take time off work due to specific life events like new children or an illness.
EI benefits include:
- Regular benefits for people whose employment was terminated without cause;
- Sickness benefits for people who are unable to work due to illness or injury;
- Maternity and Parental benefits for pregnant women, individuals who have recently had a baby and individuals who have adopted a baby;
- Compassionate care benefits for people who have to leave work to care for a gravely ill family member.
❗ What I said above about applying for EI as soon as possible applies to all these different kinds of EI benefits.
Individuals are are only entitled to EI regular benefits if they:
- were employed;
- lost thier job through no fault of thier own;
- have worked for the required number of hours since thier last EI claim;
- are ready, willing and capable of working every weak day; and
- are actively looking for work.
Individuals may not be entitled to EI regular benefits:
- if they were voluntarily left thier job without just cause.
- if they were dismissed for just cause.
The maximum amount someone can receive on EI is listed and updated 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.