Employment Insurance Special Benefits for the Self-Employed. March 2010

Transcription

1 Employment Insurance Special Benefits for the Self-Employed March 2010

2 New Measure Self employed people will be able to voluntarily opt into the EI program effective January 31, 2010, and those who register on or before April 1, 2010, will be able to claim EI special benefits as early as January 1,

3 Four types of EI special benefits Maternity Benefits* Available to birth mothers only and cover the period surrounding the child s birth (maximum of 15 weeks) Parental Benefits* Available to biological or adoptive parents while they are caring for newborn or newly adopted children these benefits may be taken by either parent or shared between them (maximum of 35 weeks) Sickness Benefits May be paid to a person who is unable to work because of illness, injury, or quarantine (maximum of 15 weeks) Compassionate Care Benefits May be paid to a person who has to be away from work temporarily to provide care or support to a family member who is gravely ill with a significant risk of death (maximum of 6 weeks). * Self-employed residents of Quebec will continue to receive maternity/paternal benefits through the Quebec Parental Insurance Plan 3

4 How it works Opting in To be eligible to access EI special benefits as a self-employed person, you must enter into an agreement with the Canada Employment Insurance Commission through Service Canada. You can enter into such an agreement beginning January 31, If you enter into an agreement between January 31, 2010 and April 1, 2010, you will be able to make a claim for EI special benefits as early as January 1, If you enter into an agreement with the Commission after April 1, 2010, you will have to wait 12 months from the date of your agreement before you will be able to make a claim for EI special benefits. 4

5 How it works Opting out As a self-employed person, you can opt out of the program within 60 days of opting in without having to pay EI premiums. Once the 60 day grace period has elapsed, your participation lasts indefinitely unless you terminate it. You can also opt out of the EI program, as long as you have never claimed benefits. If you terminate your agreement, your participation in the program will end on December 31 of the year in which you file the notice of termination. If you have claimed benefits, you will have to pay EI premiums on self-employed earnings for as long as you are self-employed, even if the nature of your self-employment changes. 5

6 How it works Qualifying for benefits You must meet the following conditions to qualify for EI special benefits: your agreement to participate in the EI Measure for Self-Employed People must still be valid (that is, not terminated); and you must have experienced an interruption of earnings because of: the birth of a child; the need to provide care to your newborn or adopted child or children; illness, injury, or quarantine; or the need to provide care to a gravely ill relative; and you must have earned a minimum specified amount of self-employment earnings during the calendar year before the year you submit an EI claim (for claims filed in 2011, the minimum amount of 2010 income is $6,000); and you must have been registered (opted-in) with the EI program for at least 12 months prior to making an initial claim for benefits.* * as a transitional measure, those who register on or before April 1, 2010 will be able to make a claim for EI special benefits as early as January 1,

7 The premiums As a self-employed person, you will pay the same EI premiums as salaried employees currently pay. The EI premium rate for 2010 is $1.73 per $100 of earnings. The 2010 EI premium rate in Quebec is $1.36 per $100 of earnings. This lower rate reflects the existence of a provincial maternity and parental benefit plan (Quebec Parental Insurance Plan). EI premiums are payable on your earnings from self-employment, up to an annual maximum insurable amount ($43,200 for 2010). Payments of premiums for individuals opting in during the 2010 calendar year would be paid through their 2010 tax return. 7

8 The benefits If you qualify for EI special benefits, your weekly benefit amount is 55 percent of the average weekly earnings from the calendar year before the year you submit an EI claim, up to a yearly maximum amount. For 2010, this maximum amount is $43,200, and the maximum weekly EI benefit amount is $457. Your average weekly earnings are your total self-employment earnings for the previous calendar year, divided by 52. Total selfemployment earnings are your self-employment income minus any losses, as calculated according to the Income Tax Act. 8

9 Example Sickness Benefits Paul: Personal fitness trainer in Montréal, Quebec Earns $39,500 per year, or about $760 per week, before taxes. Paul worries about the possibility that an injury off the job might mean that he would be unable to work for a period of time. Paul decides to opt into the EI Measure for Self-employed people. If Paul were to injure himself and qualify for benefits, he would be eligible to receive about $418 per week in sickness benefits for up to 15 weeks, assuming he has no self-employed or other earnings while receiving benefits. 9

10 Example Maternity & Parental Benefits Lise and Mike: Farmers in Saskatchewan Earn $40,000 per year in family net income. Lise and Mike are planning to start a family in the next couple of years. As a result, Lise decides to opt into the EI Measure for Self-employed people. Lisa's self-employed earnings from the farm are $20,000 or approximately $385 per week. If Lise becomes pregnant and qualifies for EI benefits, she would be eligible to receive about $212 per week in maternity benefits* for up to 15 weeks and in parental benefits* for up to 35 weeks (*assuming she has no self-employed or other earnings while receiving benefits). Mike would not be eligible for EI parental benefits, as he has not opted into the EI program. 10

11 Example Compassionate Care Benefits Joan: Massage therapist in Victoria, British Columbia Earns $35,000 per year, or about $670 per week. Joan has elderly parents and is concerned that she may have to miss out on work and her income to care for them if they become gravely ill, so she decides to opt into the EI Measure for Self-employed people to gain access to compassionate care benefits. If Joan were to apply and qualify for EI compassionate care benefits to provide care and support to one of her parents, she would be eligible to receive approximately $370 per week for up to 6 weeks, assuming she has no self-employed or other earnings while receiving benefits. Joan is also happy to have the peace of mind that she could also apply for sickness benefits, should she need them, as well as maternity and parental benefits. 11

12 For more information Visit the following Web site: 12