As the summer comes to an end, so too will many Canadians’ CERB payments.
After October 30, 2020, Canadians will no longer have access to the CERB. In an attempt to transition Canadians from the CERB to a simplified Employment Insurance program, the Federal Government has made changes effective September 27, 2020. They have also added new benefits available for those not otherwise entitled to EI.
Minimum EI Unemployment Rate
How EI worked Pre-COVID
Pre-COVID, the EI system used regional unemployment rates to determine a claimant’s access to EI regular benefits. For example, if I lived in Central Ontario then Service Canada used an unemployment rate of 13.1% to determine the following requirements:
- A minimum requirement of 420 insurable hours in the 52 weeks prior to applying for EI;
- Minimum amount of EI for 26 weeks and a maximum of 45 weeks;
- Service Canada would calculate my EI benefit by averaging my best 14 weeks in the year prior to being fired.
If I lived in Yellowknife, Service Canada would use an unemployment rate of 3.9% for the following requirements:
- I would have required 700 insurable hours to qualify for EI;
- I could be on EI for a minimum of 14 weeks and a maximum of 36 weeks;
- Service Canada would calculate my EI benefit by averaging my best 36 weeks in the year prior to being fired
How EI Qualification will work as of September 27, 2020
All of this changes as of the end of September. Regardless of your region, your EI qualifications will be calculated using a minimum of 13.1% unemployment rate (some regions will be higher), which means the majority of Canadians can expect the following:
- Requirement of 420 insurable hours to qualify for EI;
- Benefits for a minimum of 26 weeks and maximum of 45; and
- Averaging your best 14 weeks of pay during the previous 52 weeks.
Insurable Hour Credit
Perhaps the most helpful change was the implementation of an insurable hour credit. Given many employees were unable to earn even the 420 insurable hours (or 600 if you are starting special leave like maternity), the Federal Government is providing the following credits:
- If you are applying for regular EI benefits (i.e. you lost your job), you will receive a credit of 300 insurable hours. This means you only need 120 insurable hours in the previous 52 weeks before applying for EI.
- If you are applying for special benefits (sickness, maternity/parental, compassionate care or family caregiver) you are receiving a 480 insurable hour credit. This means, again, that you only need to have 120 insurable hours in the previous 52 weeks before applying for EI special benefits.
This should help individuals who may have been planning to commence maternity leave in the fall, however, were unable to work their original 600 insurable hours.
Minimum Benefit Rate
Regardless of your best 14-week average, claimants will receive a minimum of $400 per week (or $240 for extended parental benefits) even if this is higher than what their benefits would otherwise be.
EI Premium Rate Freeze
Typically, the Canada Employment Insurance Commission announces the annual EI premium rate for employers and workers. The Federal Government has frozen the current premium rate at the 2020 level for two years.