What is Employment Insurance (EI)
Canadian government pays unemployment benefits to those workers who have contributed to this fund while employed or if they want to upgrade their skills or studies or if anyone who is seriously ill or anyone who may have risk of death.
In 2013 Canadian workers pay 1.88% (1.52% for Quebec) of insured earnings until the annual limit of $891.12 ($720.48 for Quebec) is reached. This limit is reached by a deducting on maximum annual income of $47,400 Employers contribute 1.4 times the value of employee premiums. Since 1990, there is no government contribution to this fund. The amount a person receives and how long they can stay on EI varies with their previous salary, how long they were working, and the unemployment rate in their area. In some regions, EI gives flexibility due to seasonal nature of work. Many Atlantic workers are also employed in seasonal work such as fishing, forestry or tourism and go on EI over the winter when there is no work. There are special rules for fishermen making it easier for them to collect EI.
Employment Insurance (EI) - Employers
Employers are required to deduct EI premiums from their employee's insurable earnings on each dollar up to the yearly maximum amount. EI can also be used by workers to take time off and upgrade their skills.
Employment Insurance (EI) - Employee
| Employment Insurance Canada | EI rates 2012 | EI rates 2013 |
| Annual Maximum Insurable earnings | 45900 | 47400 |
| Annual Maximum Employee contribution | 839.97 | 891.12 |
| Employee contribution rate | 1.83% | 1.88 |
| Annual Maximum Employee contribution (Quebec) | 647.73 | 720.48 |
| Employee contribution rate (Quebec) | 1.47% | 1.55% |
Employment Insurance (EI) - Employer
| Canada Employment Insurance | EI rates 2012 | EI rates 2013 |
| Standard rate (employee premium) | 1.4 % | 1.4 % |
Canada Employment Insurance (EI) Financing Board
Canada Employment Insurance Financing Boards three major responsibilities are as followings
- Managing a separate EI account where any excess premiums from a given year will be held & invested until they are used to reduce premium rates in later years.
- Implementing an improved EI premium rate-setting mechanism that will make sure that EI revenues & expenditures break even over time & contribute to the relative stability of premium rates by limiting year to year changes in EI.
- Maintaining a funds reserve as a contingency fund that will support relative stability of premium rates.
Employment Insurance (EI) - Ontario
Employment Insurance provides income support to those eligible unemployed Canadians who meet qualifying conditions for Employment Insurance. In Ontario large numbers of people obtain Employment Insurance benefits due to up grading their studies or skills. Government of Canada provides fund under Part 2 of EI program for employment to meet the needs of the province of Ontario.
Employment Insurance (EI) Benefits
EI provides temporary financial assistance to those unemployed Canadian who want to upgrade their skills or if anyone who is seriously ill or anyone who may have risk of death then they may be provided with EI benefits. Employment insurance provides following types of benefits:
- Maternity benefits are for those individuals who are pregnant or give birth to a child.
- Regular benefits are for those individuals who lose their jobs through no fault of their own & are able to work again, but cannot find a job.
- Sickness benefits are for those individuals who are seriously ill or sick or injured and cannot work.
- Parental benefits are for those individuals who adopted a child or a new born baby.
- Compassionate care benefits are for those individuals who are taking care of some family member who is seriously ill or have significant risk to die
All EI benefits are taxable i.e. a person has to pay tax on the EI benefits. If a worker is collecting an EI benefit, the amount collected will be added to the workers income. This means that at the end of the year the person who is receiving EI benefits may have to pay income tax on the amount of EI benefits received.
Employment Insurance (EI) Eligibility
Those persons who meet the following conditions are eligible for regular benefits of EI:
- if the person has paid EI premium.
- if the person has lost his/her job through no fault of his own.
- if the person has not worked or not paid for last 7 consecutive days of 52 weeks.
- if the person has worked for required hours in last 52 weeks.
- if the person is looking for work and can do work each day or capable of doing work or willing to do work or ready to do work(whichever is applicable).
Employment Insurance (EI) Ineligibility
Those persons who meet the following conditions are ineligible for EI benefits:
- if the person is dismissed for misconduct.
- if the person left his/her job voluntarily without any cause.
- if the person is
participating in labour strike or any
other dispute.
Employment Insurance (EI) Application Online
To obtain Employment Insurance Application form visit Service Canada site.