Changes to EI and What They Mean for Additional Earnings While On Parental Leave

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Posted: April, 2012

In the recent federal budget, some changes were announced to the rules around additional earnings while collecting Employment Insurance (EI), so we went to the fine folks at Human Resources and Skills Development Canada to get some clarification.

At the moment, the rules stipulate that you can earn up to 40 percent of your EI weekly amount or $75 per week (depending on how much EI you collect) without any penalty to the amount of EI you receive. Anything you earn above that amount is deducted from your weekly EI payments, dollar for dollar.

On August 5th, 2012, however, all of this is going to change. In a bid to encourage those who are off work to continue to seek and accept paid employment, they’ve reduced the clawback amount to 50 percent instead of 100 percent, but there is no penalty-free threshold. So, for any additional dollar you earn while on EI, they will deduct 50 cents from your EI payment.

An example: let’s say you collect $300 per week from EI while you’re on parental leave. If you do some additional work for which you’re paid $100, they will deduct $50 from your EI payment, so your total for that week will be $350.

Get it?

These new rules apply to anyone collecting EI, regardless of the reason. And as of this post being written, the new rules aren’t yet on the Service Canada website, but it’s likely just a matter of time, so keep checking back.

 

 

 

10 responses to “Changes to EI and What They Mean for Additional Earnings While On Parental Leave”

  1. Firesparx says:

    Hmm….I can’t decide if this is a good change or not….Basically you’d be getting paid half your hourly wage for your additional work…to me it makes it seem not worthwhile. I was hoping to stop into work for a couple hours each week to keep on top of things, get out of the house and to earn a wee bit of extra cash. Now I’m not so sure if it’s worth it!

  2. Megan, exec editor of cf.ca says:

    I felt the exact same way when I was researching this, @Firesparx. The change seems to make sense for those who are collecting EI due to unemployment, but less so for those of us who collect it temporarily while on parental leave and would like to make a little extra money.
    —Megan, executive editor of cf.ca

  3. MercuryBlue says:

    This is absolutely infuriating, honestly. I work in the employment field, have for the past six or seven years. A couple of weeks ago, I was laid off as a result of the provincial government doing an overhaul of the employment program, and the company I work for didn’t get the contract for our region. I had an above-average income (nothing to write home about, but decent) so I’ll be getting the maximum amount of EI. I haven’t been unemployed in well over a decade, so this will be my first time collecting EI.

    Because the field for which I’ve been trained is fairly specialized, there are not a huge amount of jobs available. I’m willing to take just about any sort of job; however, with the cost of childcare and commuting being so high (and our family not being eligible for any sort of subsidies), I either have to find another decent-paying job or something during the evenings and weekends closer to home at a lower wage in order to make ends meet. And I’m not talking about having a lot of unnecessary expenses- we are a single vehicle family, and that car is fifteen years old. We have a tiny house with a low mortgage, some student loans, basic utilities, that’s it. Have I mentioned I live in an area that had an unemployment rate of over 15% last month?

    In order to make ends meet, I took a part-time, minimum wage job working weekends. This leaves my week free for job searching, networking, skills development, etc. The total weekly before tax income from that job will be around $159- just slightly over a quarter of what I’ll be earning per week while on EI.

    With these changes to EI, it means that I’ll be working 15.5 hours per week for just over $5.10 per hour. That’s close to $300 per month LESS than what I would be contributing to my household than expected before this change(with EI allowing an individual to earn 25% of their weekly EI income through work), until I’m able to find a full-time position again.

    These changes really only benefit individuals who are able to find part-time employment at a higher wage. Those struggling the most- the ones taking minimum wage jobs just to make ends meet- are only being harmed in the long run.

  4. Kim D. says:

    This doesn’t encourage you to to do extra work it discourages it. Thanks Harper and the conservatives for continuing to attack the canadian families!!

  5. syed says:

    new rule is not good for low income families , most of the canadian who laid off mostly earning 12 to 18$/hr if they want to earn only 100 $/week they need to work almost 18hr/week and they will not have time to search the job, parental benefits should be exempted from this new rule , if they want to work extra money they need to work 3 days for 100$ so how person can take care of new born ,for parental benefit person 40% earn rule is aceptable , they can earn some extra money and take care of new born , this rule more disturb the family life of low income families,

  6. Roche Runo says:

    What bothers me most is how governemts make regulations with the thought process that people are carbon copys of each other. People have real life situations and issues. Health Issues, High rates of depression, Familys not contributing to the support of their parents. These harsh new rules will make it impossible for them. Many people will give up looking rather than put up with the indignity of being treated like children. Not everyone will move away from family and friends to go where they know noone. Secondly, basic skills needed employers love hiring forigners. So they dont lose their job they work for no overtime, and they work without complaint. Not even to the labour board. Because of the exchange rate they can send money home to they family. How many low paid people can say that . I worked for one company that even gave them houseing. I forget what the actual rent payments were person but the employer was making over 3000 on the house. Ironically, I lost my own job because Sears sent their call centers over to the phillipines. So like most of you have predicted welfore rates will soar, I believe. The stress caused will have doctors filling out forms so people can go on the SAID progam. And the rest sadly will be living on the street, panhandling. Or worse, tuning to crime. And then the money the federal goverment saved on EI progrman will be used up in the Penal System. I read once that when things are too slanted one way. the citizens will rise and up and take it away. History has demonstrated that many times. Prime Minister Harper. You are heartless. I know tough decisions have to be made. But this one may have you cost your party its next election. You should have done it over time at least.

  7. cookie bird says:

    So i work for an staffing agency because i find it hard to find work – especially clerical, there seems to be a real shortage of that industry. Anyhow i`m on EI right now and found out that if i make 200 per week on EI but i work for 1 day as they may call me in to work and i end up making $80 for that day then they take out dollar for dollar during my waiting period! So i will only take $120 from EI and make the $80. I felt like crap! and that i shouldn`t have worked because if i stayed home i would make $200. but if i worked i still make $200.00 nothing more – actually less because that 80 which i earned is also taxed so i take home less! thanks alot!

    This is actually discouraging me from working I liked it before when you could work a number of hours so it would give incentive to work so you could earn more on it! Also If i worked in the coming weeks i will loose 50% of my benefits even if its for a day and i`m making minimum wage! I can`t find long term work and the agencies aren`t helping they are going to make me end up earning less – so better wait on EI and avoid job phone calls until sept. then start looking for work on the last 2 months left on claim or i`m going to end up earning less! This change is for the worst!

  8. cookie bird says:

    Maybe if the government didn`t hand out everyone one that was non canadian free health care we wouldn`t have so much problems! just saying we`d have less tax to pay and more income! I thought Canadian healthcare was for Canadians not anyone and everyone – i see alot of fraud on that! people bring their parents for relatives for the health care get treated than go home. but they make changes to the EI? I don`t like this new changes – its for the worse and i will not be working or looking for work because i will earn less! I will wait until my claim is about to end because i can`t work 1 or 2 days i will lose more! I

  9. cookie bird says:

    Its not – i`m on EI right now and i made the mistake of working! A temp agancy called me for work! I was so happy because i thought i could earn some extra money because i thought i could earn up to 7.5 or 8 hours without penalty but i was wrong the EI lady told me that because its during my waiting period that i would be deducted dollar for dollar! I was going to get $200.00 per week (not much but still $800 a month) I only made $80 that day and it was a 1 day assignment well now EI is only going to pay me $120.00 so I ended up working for $0.00 really because i`m still making $200.00 but i worked for $80 and i could have stayed home and still made $200.

    Also I was told that after that 50% of my EI benefits will be deducted if i work…so i`m a low income earner and i can`t seem to make more than 12 dollars! I try but can`t! If i work I will made $6 per hour because EI will remove 50% of those hours worked! I will not be answering any work related phone calls for the summer i will stay on EI the only way i will accept a job is if its full time and pays me above $13.00 per hour because that is the only way i can gurantee i will make more! I can`t do minimum wage until my EI is done! Or i will be the one that is suffering!

  10. Rob says:

    I was on EI and worked for 36 hours @ $10 and made about $360 with the calculations that I will get $180. However, I got nothing with a reason I worked for more than 32 hours. I did not see this anywhere on Service Canada Website. The examples given shows only dollar amount but nothing about how many hours can I work to get 50% of what I earn.

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