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Communications

CASE STUDIES FOR THE NEW PILOT PROJECT “WORKING WHILE ON CLAIM”

Posted on September 20, 2012

The following case study was completed by the Library of Parliament

Introduction

The new employment insurance (EI) pilot project “Working While on Claim” will allow individuals receiving regular, parental, fishing or compassionate care benefits to have earnings from employment at the same time.

Under the old pilot project, claimants could only earn up to $75 or 40 percent of their weekly benefit, whichever was greater. Any earnings above that threshold were deducted from the benefit payment dollar-for-dollar.

Under the new pilot project, which started on 5 August 2012, deductions from EI benefits become equal to: 50% of gross earnings while on claim, if these earnings are below 90% of weekly insurable earnings; or 45% of weekly insurable earnings plus 100% of gross earnings while on claim above the threshold of 90% of weekly insurable earnings.[1]

This document presents some case studies and shows the difference between the amounts received under the old and the new pilot project. In all cases, we assume that the person was earning the same hourly wage before starting to receive EI benefits, but was working 40 hours per week (except case 6).

Case studies

1A) Nurse on maternity leave working 12 hours per week at 20$ per hour

In both cases, no earnings are allowed while receiving maternity benefits. Earnings are reduced dollar-for-dollar. There is no difference between the two versions of the pilot project.

1B) Nurse on parental leave working 12 hours per week at $20 per hour

Previous method

New method

Weekly   insurable earnings $800 Weekly   insurable earnings $800
Gross   earnings while on claim $240 Gross   earnings while on claim $240
Gross   EI weekly benefit (55% of weekly insurable earnings) $440 Gross   EI weekly benefit (55% of weekly insurable earnings) $440
Earnings   threshold (greatest of $75 or 40% of weekly benefit) $176 Earnings   threshold (90% of weekly insurable earnings) $720
Deduction from EI benefit: gross earnings while on   claim minus threshold $64 Deduction from EI benefit: 50% of gross earnings   while on claim $120
Net   EI benefit $376 Net   EI benefit $320
Combined   earnings and EI benefits $616 Combined   earnings and EI benefits $560

Source:     Authors’ calculations based on information provided by Service Canada, New Working While on Claim Pilot Project.

In this case, the person is worse-off with the new method by $56 weekly.

2A) Nurse on maternity leave working 8 hours at $20 per hour

In both cases, no earnings are allowed while receiving maternity benefits. Earnings are reduced dollar-for-dollar. There is no difference between the two versions of the pilot project.

2B) Nurse on parental leave working 8 hours per week at $20 per hour

Previous method

New method

Weekly   insurable earnings $800 Weekly   insurable earnings $800
Gross   earnings while on claim $160 Gross   earnings while on claim $160
Gross   EI weekly benefit (55% of weekly insurable earnings) $440 Gross   EI weekly benefit (55% of weekly insurable earnings) $440
Earnings   threshold (greatest of $75 or 40% of weekly benefit) $176 Earnings   threshold (90% of weekly insurable earnings) $720
Deduction from EI benefit: gross earnings while on   claim minus threshold $0 Deduction from EI benefit: 50% of gross earnings   while on claim $80
Net   EI benefit $440 Net   EI benefit $360
Combined   earnings and EI benefits $600 Combined   earnings and EI benefits $520

Source:     Authors’ calculations based on information provided by Service Canada, New Working While on Claim Pilot Project.

In this case, the person is worse-off with the new method by $80 weekly.

3)  Waitress receiving regular EI benefits working 10 hours per week at $12 per hour

Previous method

New method

Weekly   insurable earnings $480 Weekly   insurable earnings $480
Gross   earnings while on claim $120 Gross   earnings while on claim $120
Gross   EI weekly benefit (55% of weekly insurable earnings) $264 Gross   EI weekly benefit (55% of weekly insurable earnings) $264
Earnings   threshold (greatest of $75 or 40% of weekly benefit) $105.60 Earnings   threshold (90% of weekly insurable earnings) $432
Deduction from EI benefit: gross earnings while on   claim minus threshold $14.40 Deduction from EI benefit: 50% of gross earnings   while on claim $60
Net   EI benefit $249.60 Net   EI benefit $204
Combined   earnings and EI benefits $369.60 Combined   earnings and EI benefits $324

Source:     Authors’ calculations based on information provided by Service Canada, New Working While on Claim Pilot Project.

In this case, the person is worse-off with the new method by $45.60 weekly.

4) Farm labourer receiving regular EI benefits working 8 hours per week at $14 per hour

 Previous   method

New method

Weekly   insurable earnings $560 Weekly   insurable earnings $560
Gross   earnings while on claim $112 Gross   earnings while on claim $112
Gross   EI weekly benefit (55% of weekly insurable earnings) $308 Gross   EI weekly benefit (55% of weekly insurable earnings) $308
Earnings   threshold (greatest of $75 or 40% of weekly benefit) $123.20 Earnings   threshold (90% of weekly insurable earnings) $504
Deduction from EI benefit: gross earnings while on   claim minus threshold $0 Deduction from EI benefit: 50% of gross earnings   while on claim $56
Net   EI benefit $308 Net   EI benefit $252
Combined   earnings and EI benefits $420 Combined   earnings and EI benefits $364

Source:     Authors’ calculations based on information provided by Service Canada, New Working While on Claim Pilot Project.

In this case, the person is worse-off with the new method by $56 weekly.

5) Daughter receiving compassionate care benefits working 8 hours per week at $16 per hour

 Previous   method

New method

Weekly   insurable earnings $640 Weekly   insurable earnings $640
Gross   earnings while on claim $128 Gross   earnings while on claim $128
Gross   EI weekly benefit (55% of weekly insurable earnings) $352 Gross   EI weekly benefit (55% of weekly insurable earnings) $352
Earnings   threshold (greatest of $75 or 40% of weekly benefit) $140.80 Earnings   threshold (90% of weekly insurable earnings) $576
Deduction from EI benefit: gross earnings while on   claim minus threshold $0 Deduction from EI benefit: 50% of gross earnings   while on claim $64
Net   EI benefit $352 Net   EI benefit $288
Combined   earnings and EI benefits $480 Combined   earnings and EI benefits $416

Source:     Authors’ calculations based on information provided by Service Canada, New Working While on Claim Pilot Project.

In this case, the person is worse-off with the new method by $64 weekly.

 

6) Fisherman helper receiving fishing benefits, working 10 hours per week at $20 per hour, but who has weekly insurable earnings of $883 and drawing maximum EI benefits of $485 per week

 Previous   method

New method

Weekly   insurable earnings $883 Weekly   insurable earnings $883
Gross   earnings while on claim $200 Gross   earnings while on claim $200
Gross   EI weekly benefit (55% of weekly insurable earnings) $485 Gross   EI weekly benefit (55% of weekly insurable earnings) $485
Earnings   threshold (greatest of $75 or 40% of weekly benefit) $194 Earnings   threshold (90% of weekly insurable earnings) $794.70
Deduction from EI benefit: gross earnings while on   claim minus threshold $6 Deduction from EI benefit: 50% of gross earnings   while on claim $100
Net   EI benefit $479 Net   EI benefit $385
Combined   earnings and EI benefits $679 Combined   earnings and EI benefits $585

In this case, the person is worse-off with the new method by $94 weekly.



 

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