GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 1)
 LEARNING OBJECTIVES

Calculate the EI premiums payable for regular benefits, sickness

benefits, maternity and parental benefits and compassionate care
benefits and parents of critically ill children

‒ For an employed individual

‒ For a self-employed individual

 PREMIUMS

The government calculates Employment Insurance premiums

based on participation in the entire Employment Insurance
program, which encompasses benefits for unemployment (regular
benefits), sickness, maternity leave, parental leave and
compassionate care leave.
The government does not break these components out
individually, so there is no separate or distinguishable premium
charged for any single portion of the program.
The employer’s portion of the premium is 1.4 times the
employee’s premium.
Premiums change on annual basis, based on breakeven actuarial
forecasts for the EI program.
 PREMIUMS

Employee pays: 1.62%

Employee
Maximum insurable
earnings: $53,100
(2019)
Employer pays: 2.268%
Premiums

Self-Employed Self-employed
individuals do not pay
Maximum insurable the employer portion of
earnings: $53,100 EI premiums
(2019) 1.62%
 EXAMPLE

Josh earned $45,000 in 2019, working full-time at AGGD

enterprises.

1. Calculate Josh’s EI premiums.

2. Calculate AGGD EI premiums.

 EXAMPLE

1. Josh will pay $729

Calculated as: 1.62% x $45,000

2. AGGD will pay: $1020.60

Calculated as: 1.4 x 1.62% x $45,000

 TEST YOUR UNDERSTANDING

Q U Z
I

Angel is self-employed, earning $60,000. She’s a part of the EI

program, calculate her contributions in 2019?
 TEST YOUR UNDERSTANDING – ANSWER

Q U Z
I

Angel’s income exceeds $53,100 so she will pay EI on her income

up to the maximum amount of $53,100.

Her EI premiums will be: $860.22

Calculated as: $53,100 x 1.62%
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 2)
 LEARNING OBJECTIVES

Explain the tax impact of EI premium for regular benefits, sickness

benefits, maternity and parental benefits, and compassionate care
benefits for critically ill person or providing end-of-life care

For an employed individual

For a self-employed individual

 TAX TREATMENT

The employee does not pay tax on EI premiums contributed by

employers.

The employee portion gives rise to a federal non-refundable tax

credit.

The employer portion is tax-deductible for the employer.

 EXAMPLE

Josh earned $45,000 in 2019, working full-time at AGGD

enterprises. The employer will deduct $729 EI premiums from Josh’s
pay cheque. Also, AGGD will pay: $1020.60 EI Premiums (employer
portions), on Josh’s earnings.

Explain the tax impact of these payments.

 EXAMPLE

$729 EI payment will give rise to a federal non-deductible tax

credit available for Josh. The employer cannot deduct this
payment as a business expense.

$1020.60 employers portion, will be a tax deductible expense for

AGGD enterprises.
 TEST YOUR UNDERSTANDING

Q U Z
I

Angel is self-employed, earning $60,000. She’s a part of the EI

program, and contributed $860.22 in EI premiums. Calculate the
effect of this payment on Angel’s taxes
 TEST YOUR UNDERSTANDING – ANSWER

Q U Z
I

The $860.22 EI premium will lead to federal tax credit, which could
be used to reduce her taxes.
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 3)
 LEARNING OBJECTIVES

Estimate the benefit payable from EI

Regular benefits

Sickness benefits

Maternity and parental benefits

Compassionate care benefits and parents of critically ill children

 EI BENEFITS (2019)

% of weekly Maximum Weekly

Benefit name
Ins. earnings weeks maximum
Regular Benefit 55% 14 - 45 $562
Maternity 55% 15 $562
$562 or
Parental* 55% or 33% 40 or 69
$337
Sickness 55% 15 $562
Family caregiver benefit for children 55% 35 $562
Family caregiver benefit for adults 55% 15 $562
Compassionate care 55% 26 $562
Note:
1- The combined maternity and parental leaves for one parent cannot exceed 76 weeks. Only the parental leave can be
shared.
2- 35 weeks maximum per parent (standard benefits)
3- 61 weeks maximum per parent (extended benefits)
Source: https://www.canada.ca/en/services/benefits/ei/ei-maternity-parental.html
 EXAMPLE

Yue Xiao, worked for more than two years with his employer, IER
consulting, unfortunately this year he got sick with bronchitis. His
doctors expect him to recover from this disease in 10 weeks.

Explain what EI benefits are available for Yue.

 EXAMPLE

Yue could take advantage of the Sickness Benefit, which is up to 15

weeks, and with a maximum benefits of $562 (2019).
 TEST YOUR UNDERSTANDING

Q U Z
I

Jasmine has been working with the same employer for the past 5
years, without any interruptions. Her Income is $89,000 per year.
Jasmine is expecting to give birth in two months.

Explain what benefits are available for her under the EI program,
and the maximum eligible amounts.
 TEST YOUR UNDERSTANDING – ANSWER

Q U Z
I

Since Jasmine’s income exceeds the maximum income subject to

EI, she is likely to be eligible for the following benefits (2019
amounts).

1. Maternity Benefit for 15 weeks, maximum $562.

2. Parental Benefit, if she decides to take care of her child for up to

35 (standard) or 61 (extended) weeks with a maximum benefit
of $562, or $337 respectively.
Maximum benefit period should not exceed 76 weeks.
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 4)
 LEARNING OBJECTIVES

Explain the tax treatment of receiving income under EI:

Regular benefits

Sickness benefits

Maternity and parental benefits

Compassionate care benefits and parents of critically ill children

 EI BENEFITS (2019)

Benefit name Taxable Claw back

Yes Max 30%
Regular Benefit As ordinary income
(of benefits)

Maternity As ordinary income No

Parental As ordinary income No
Sickness As ordinary income No
Family caregiver benefit for children As ordinary income No
Family caregiver benefit for adults As ordinary income No
Compassionate care As ordinary income No
 EXAMPLE

Hanson applied for EI regular benefits last year and received

$10,000 in total benefits. He also had rental income of around
$4,000 during the year.

Calculate his taxable income.

 EXAMPLE

Hanson’s taxable income will be $14,000 since EI regular benefits

are taxed as ordinary income.
 TEST YOUR UNDERSTANDING

Q U Z
I

After giving birth to her first child in 2019, Jasmine took advantage
of maternity benefits. She received a total of $3,000 in maternity
benefits, prior to resuming work. In 2019 Jasmine’s income was
$100,000, including her benefits.

Calculate:

1. Taxable income

2. EI claw back
 TEST YOUR UNDERSTANDING - ANSWER

Q U Z
I

1. Jasmine’s taxable income will be $103,000. Since maternity

benefits are taxable.

2. Even though her income is high she will not experience a

reduction in benefits (claw back).
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 5)
 LEARNING OBJECTIVES

Explain the purpose and the eligibility criteria for EI regular

benefits.

The maximum length of time that EI benefits are payable for:

- Regular benefits
- Sickness benefits
- Maternity and parental benefits
- Compassionate care benefits and parents of critically ill children
 PURPOSE AND THE ELIGIBILITY CRITERIA
FOR EI REGULAR BENEFITS

The purpose of EI regular benefits is to provide income for employees who lost their
jobs, through no fault of their own. The benefits cover an individual’s expenses
while he/she is looking for other jobs.

An employee may be entitled to regular benefits if he or she:

Was employed in insurable employment

Lost this job through no fault of his or her own
Was unemployed and without pay for at least seven consecutive days in the last
year (52 weeks)
Worked the required number of hours of insurable employment in the previous
52 weeks or since the start of his or her previous Employment Insurance claim,
whichever is shorter
Is “ready, willing and capable” to work every day
Is actively searching for employment
 EI BENEFITS (2019)

Maximum
Benefit name
weeks
Regular Benefit 14 - 45
Maternity 15

Parental 52 or 78
Sickness 15
Family caregiver benefit for children 35
Family caregiver benefit for adults 15
Compassionate care 26
 EXAMPLE

Regina has been working for her employer for the past three years,
her income was $58,000 per year. Last year, she was fired by her
employer due to unethical behaviour.

Calculate the maximum amount of her EI benefits.

 EXAMPLE

Regina is not entitled to any benefits from her previous employer,

since she was fired due to unethical behaviour.
 TEST YOUR UNDERSTANDING

Q U Z
I

Hilary is a full-time employee with Contractors limited. She has

been working with the same firm for the past year. Her income has
been around $89,000. Hilary is expecting a baby in two months.
She is planning to take care of her baby for as long as she could.

Explain which EI benefits will help Hilary achieve her objective.

Calculate the maximum amount of time she could be receiving

these benefits.
 TEST YOUR UNDERSTANDING – ANSWER

Q U Z
I

Hilary will be eligible for maternity leave, and if she decides to take
care of her baby, she could also be eligible for parental leave.

The maximum periods are:

• 15 weeks for maternity leave
• 61 weeks for extended parental leave

She could be eligible for a maximum 76 weeks (combined maternity

and extended parental leave)
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 6)
 LEARNING OBJECTIVES

Explain the activities that may exclude eligibility for EI regular

benefits.
 EI EXCLUSIONS

An employee may not be entitled to regular benefits if he or she:

Voluntarily left his or her job without just cause

Was dismissed for misconduct

Is unemployed because of direct participation in a labour dispute

(for example, a lockout, strike or other type of dispute)
 EI EXCLUSIONS

A regular benefits recipient can travel outside Canada for a period of seven
consecutive days with no interruption of benefits, if travel is:

To attend the funeral of an immediate family member or close relative

To accompany an immediate family member to medical care facilities,

provided the treatment sought is not readily available in the family
member’s region of residence

To visit an immediate family member who is injured or seriously ill

To travel to attend a bona fide job interview

 EXAMPLE

Ghadir was recently laid off. She applied for EI regular benefits and
started receiving the benefits. After several weeks, she decided to
take a three-week vacation in the Caribbean.

Explain the effect of this action on her EI benefits.

 EXAMPLE

Ghadir will lose her EI benefits, since she is not actively looking for a
job. Also, travelling abroad for vacation will deem the EI recipient
ineligible to receive EI regular benefits.
 TEST YOUR UNDERSTANDING

Q U Z
I

Brad was recently laid off by his employer. He started receiving his
EI regular benefits. He spends his time travelling around the
province and enjoying his time fishing.

Is Brad eligible for continued EI benefits?

 TEST YOUR UNDERSTANDING – ANSWER

Q U Z
I

Brad’s EI regular benefits will likely discontinue, since he is not

actively looking for a job.
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

EMPLOYMENT
INSURANCE
(PART 7)
 LEARNING OBJECTIVES

Explain how each of the factors may impact the amount of EI

sickness benefits payable.

Insurable earnings

Regional rate of unemployment

Number of highest earning weeks

 SICKNESS BENEFITS

Insurable earnings

Higher insurable earnings, mean higher

EI benefit.

Regional rate of unemployment

Higher unemployment decreases the

required work weeks for the calculation

Number of highest earning weeks

The higher the number of earning weeks,

the higher is the benefit amount.
 EXAMPLE

Yue Tran has been employed full-time with the same employer for
the past 15 months. She got sick, and is expected to recover in 6
weeks. Explain what effect will the regional rate of unemployment
have on the amount of her benefits.
 EXAMPLE

Higher unemployment rate will make it easier to qualify for the

benefit, and receive a higher benefit.
 TEST YOUR UNDERSTANDING

Q U Z
I

Sangam was employed full-time for the past 5 years. Now Sangam
is sick, and is expected to recover in 10 weeks. Which of the
following factors will increase Sangam’s EI sickness benefit?

A. Low number of highest earning weeks

B. Low regional unemployment
C. Low salary and bonuses
D. High number of highest earning weeks
 TEST YOUR UNDERSTANDING

Q U Z
I

Sangam was employed full-time for the past 5 years. Now Sangam
is sick, and is expected to recover in 10 weeks. Which of the
following factors will increase Sangam’s EI sickness benefit?

A. Low number of highest earning weeks

B. Low regional unemployment
C. Low salary and bonuses
D. High number of highest earning weeks
ANY QUESTIONS

?
GOVERNMENT BENEFIT PLANS

WORKERS’
COMPENSATION
PROGRAMS
 LEARNING OBJECTIVES

Explain the purpose of Workers’ Compensation Programs.

Image source: https://joedunnlaw.com/new-site/wp-content/uploads/2016/04/joedunn-categories-workers-comp.jpg

 PURPOSE OF WORKERS’ COMPENSATION PROGRAMS

The program is a collection of separate disability insurance

programs sponsored by the various provincial and territorial
governments.

Each program is responsible for compensating workers within its

jurisdiction for income lost due to disability arising from job-
related accidents or illnesses.
 PURPOSE OF WORKERS’ COMPENSATION PROGRAMS

Employees do not contribute to the plan; rather, all financial

contributions are the responsibility of the participating employers.

Generally, workers’ compensation programs are established as

no-fault insurance, where the legislation removes a covered
individual’s right to undertake legal action against an employer as
it relates to the disability.
 EXAMPLE

Sandy was working on a construction site when a pallet of wood fell

on her and broke her arm. She won’t be able to go back to work for
the next 7 weeks. Sandy will be able to receive compensation from
the worker’s compensation board for the period of her absence,
since this accident happened at work.
 TEST YOUR UNDERSTANDING

Q U Z
I

While arranging concrete pallets at a local hardware store, Utrad’s

forklift tipped, resulting in a permanent disability. His employer does
not offer accidental insurance for employees but participates in a
local workers’ compensation board program. Utrad is planning to
sue his employer, asking for $5,000,000 compensation.

What compensation options are available for Utrad?

 TEST YOUR UNDERSTANDING – ANSWER

Q U Z
I

Utrad is likely to receive a monthly compensation from workers’

compensation board. Permanent disabilities can lead to
compensation payments until age 65.

Workers’ compensation programs are established as no-fault

insurance, where the legislation removes a covered individual’s
right to undertake legal action against an employer as it relates to
the disability
ANY QUESTIONS