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.
