Luisa Rollenhagen is a journalist and investor who writes about financial planning for Wealthsimple. She is a past winner of the David James Burrell Prize for journalistic achievement and her work has been published in GQ Magazine and BuzzFeed. Luisa earned her M.A. in Journalism at New York University and is now based in Berlin, Germany.
Being prepared and building up an emergency fund and developing good spending and saving habits early on can help lessen the blow when financial hardship hits. You get laid off, personal circumstances force you to lose your job, or you move to a new place and the job hunt is taking longer than you’d like. That’s when employment insurance can become a financial lifeline for people while they get back on their feet.Our cash account doesn’t have an “introductory rate” — because introductory rates disappear. Get started with Wealthsimple Cash to spend, save and earn 0.75% interest annually.
What is employment insurance?
Employment insurance (EI) is a type of financial assistance program run by the Canadian government that allows Canadians who have recently lost their job to receive temporary help. In addition to providing financial assistance, EI also helps you in your job search.
However, it’s important to point out that the amount you receive from your EI is dependent on what your last salary was, how long you were working, and the average unemployment rate in your area. In most cases, benefits tend to amount to 55% of your average insurable weekly earnings, up to a maximum amount. As of January 1st, 2020, the maximum yearly insurable earnings amount is $54,200. This means that you can receive a maximum amount of $573 per week.
Who’s eligible for employment insurance?
In order to be eligible to receive EI, you have to fulfill certain criteria, which are listed here. Among other things, you must have been previously employed in some type of insurable employment, have worked for the required number of insurable employment hours in the last 52 weeks or since the start of your last EI claim, whichever is shorter, and also have lost your job “through no fault of your own.” That means that you lost your job because of layoffs, seasonal shifts, or certain other circumstances. You must also currently be looking for work. Your EI caseworker may want to see evidence of you having reached out to employers during this period.
While the number of hours you needed to work will depend on your region, you can check the unemployment rate in your area and find out the minimum hour requirement here. It’s also important to point out that if you’ve received EI benefits before and violated the terms of your benefits, then the number of insurable hours required to qualify is increased. You can see how many hours you need to have worked based on unemployment rates below:
|Regional rate of unemployment||Without violation||Minor violation||Serious violation||Very serious violation||Subsequent violation|
|6 % and under||700||875||1050||1225||1400|
|6.1 % to 7 %||665||831||998||1164||1330|
|7.1 % to 8 %||630||788||945||1103||1260|
|8.1 % to 9 %||595||744||893||1041||1190|
|9.1 % to 10 %||560||700||840||980||1120|
|10.1 % to 11 %||525||656||788||919||1050|
|11.1 % to 12 %||490||613||735||858||980|
|12.1 % to 13 %||455||569||683||796||910|
|More than 13 %||420||525||630||735||840|
You are not entitled to EI benefits if you’ve voluntarily left your job without just cause or if you were dismissed for misconduct—so unfortunately.
If you’re not currently employed because you’re pregnant, have recently given birth, or adopted a child, then you’re also eligible for EI maternity and/or parental benefits. There are also EI benefits for self-employed folks, as well as for Canadians who currently live abroad. If you’re unable to work due to illness or injury, you can apply for sickness benefits, and if you’re taking care of an injured or sick person, then you may be eligible for caregiver benefits. (There are also specific EI benefits for those employed in the fishing industry.)
How to apply for employment insurance
You can apply for EI benefits as soon as you lose your job (and indeed you should), and you don’t even have to wait to have your Record of Employment letter (ROI) to start your claim. You do, however, have to apply within 4 weeks of your final day of work, at the latest. The longer you wait, the longer it’ll take for benefits to kick in.
Signing up to receive EI benefits is pretty simple, and can mercifully be done online. Before you start, you’ll need the following:
Your Social Insurance Number (SIN). If your SIN begins with a 9, you need to supply proof of your immigration status and work permit.
Your mother’s maiden name
Your mailing and residential addresses, including the postal codes
Your complete banking information to sign up for direct deposit, including the financial institution name, bank branch number, and account number
Names, addresses, dates of employment, and reason for separation for all your employers over the last 52 weeks
Your detailed version of the facts surrounding your unemployment if you quit or have been dismissed from any job in the last 52 weeks
The dates and earnings for each of your highest paid weeks of insurable earnings in the last 52 weeks or since the start of your last EI claim, whichever is the shorter period. This information will be used, along with your Record(s) of Employment, to calculate your benefit rate.
Once you’ve got all the information in place, you can start the application process here. It takes about an hour, and the Canada Services website provides step-by-step instructions on how to fill out the form as you go. If you’re stuck or have questions about any benefit claims, you can reach out for information online or via phone, as detailed here. You can also call Canada Services at 1-800-206-7218.
Overview of employment insurance payments
After you’ve applied for EI benefits, you’ll receive a confirmation number electronically. Be sure to keep this number for future reference. Soon after you’ve applied, you’ll receive a benefit statement in the mail. This statement will include your Access Code (a four-digit number), which is printed in the shaded area at the top of the benefit statement. Your Access Code is needed to submit your required bi-weekly reports and to get information about your claim. You need to complete bi-weekly reports to prove your eligibility and to receive any payment you may be entitled to. Failure to do so can mean a loss of benefits. The most convenient way to submit your reports is through the Internet Reporting Service. You can also use the Telephone Reporting Service at 1-800-531-7555.
If your application is approved and you’re considered eligible for benefits, you can expect the first payment to arrive within 28 days of when your application was received. You’ll also want to create a My Service Canada account so that you can see any decision made about your EI application, sign up for direct deposits, see details on your payments and deductions, and view and update your personal information, including changing your address.
EI benefits are then issued every two weeks for as long as you’re eligible. You can receive EI from 14 weeks up to a maximum of 45 weeks, depending on the unemployment rate in your region at the time of filing your claim and the amount of insurable hours you have accumulated in the last 52 weeks or since your last claim, whichever is shorter. And as mentioned before, while the exact amount varies, you can expect to get 55% of your average insurable weekly earnings, up to a maximum amount, which for this year is $54,200, meaning you could receive a maximum amount of $573 per week.
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