Friday, August 21, 2020

Government of Canada: Transitional Plan from CERB to EI and New Recovery Benefits

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On August 20, 2020, the newly-minted Minister of Finance Chrystia Freeland, together with Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough, announced the extension of the Canada Emergency Response Benefit (CERB) for four more weeks into late September. From that point onwards, starting September 27, Canadians out of work will transition to a simplified Employment Insurance (EI) program or one of the three new benefits announced.

Canada Recovery Benefit – for self-employed workers and workers not eligible for EI in the amount of $400 per week. Available for up to 26 weeks over 1 year.
Canada Recovery Caregiving Benefit – for Canadians who cannot work because they need to provide care or support for a child, family member or dependent in the amount of $500 per week. Available for up to 26 weeks per household over 1 year.
Canada Recovery Sickness Benefit – for those unable to work because they are sick or have to self-isolate for reasons related to COVID-19 in the amount of $500 per week for up to two weeks, for one year. 

Minister Qualtrough said that the government plans to introduce legislation to enable the creation of these new programs as soon as Parliament returns (September 23).
 
Changes to the EI Benefit
Recognizing that the pandemic has prevented many Canadians from accumulating the number of insurable hours that are normally required to access EI, it is being modified to help individuals qualify with a minimum of 120 hours of work. EI claimants will receive a one-time insurable hours credit of:

300 insurable hours for claims for regular benefits (job loss)
480 insurable hours for claims for special benefits (sickness, maternity/parental, compassionate care or family caregiver)

The hours credit will be available for new EI claims for one year and will be made retroactive to March 15, 2020 for claimants who were looking to transition early from the CERB to EI maternity, parental, compassionate care, family caregiver or work-sharing benefits but could not establish their EI claim due to insufficient hours.
 
Other changes include:

Minimum EI Unemployment Rate Across Canada: A minimum unemployment rate of 13.1% is being used for all EI economic regions to lower the hours required to qualify for EI regular benefits.
Minimum Benefit Rate: new EI claimants as of September 27, 2020, will receive a minimum benefit rate of $400 per week (or $240 for extended parental benefits) if this is higher than what their benefits would otherwise be.
EI Premium Rate Freeze: The Government is freezing the EI premium rate for employees at the 2020 level of $1.58 per $100 of insurable earnings for two years. The rate for employers, who pay 1.4 times the employee rate, will also remain unchanged at $2.21 per $100 of insurable earnings.

Minister Freeland noted that this measure constitutes an economic boost, as it translates into approximately $2 million in savings for workers and employers.

In total, the extension of CERB, the one-year flexibility for EI coupled with the three new benefits, and additional costs to the EI system are budgeted to cost at least $37 billion over the next year.

Key Link

Backgrounder: Next Phase of the Economy Re-opening: Increased Access to EI and Recovery Benefits