This blog was prepared with the assistance of summer student Caileigh Rendek.
The Federal Government recently announced its proposed plan to transition individuals receiving the Canada Emergency Response Benefit to modified Employment Insurance benefits and other new programs, effective September 27, 2020, pending approval by Parliament.
At a news conference held on August 20, 2020, Deputy Prime Minister and Finance Minister Chrystia Freeland announced plans to extend the Canada Emergency Response Benefit (“CERB”) by four weeks, modify existing Employment Insurance (“EI”) benefit rules, and introduce three new one-year benefit programs to take effect on September 27, 2020. The new programs require Parliamentary approval, and are expected to be put to a vote once a new session of Parliament begins on September 23.
Extending the CERB and Modifying the EI Eligibility Rules
The first part of the federal transition plan extends the CERB by four weeks, to a maximum of 28 weeks. This means that individuals who would have exhausted their CERB benefits at the end of August will now be able to access an additional four weeks of support. For more information on previous changes to the CERB, please see our previous blog here.
Second, on September 27, 2020, individuals who remain unable to work will transition to receiving a modified EI benefit if they meet the revised eligibility criteria. Access to EI is based on the number of insurable hours an individual has worked in the year prior to their application or since their last claim (normally 420 insurable hours for EI regular benefits or 600 insurable hours for EI special benefits such as sickness, maternity/parental, compassionate care, or family caregiver benefits). To increase access to EI, individuals will receive a one-time “credit” of insurable hours, effectively reducing the requirement to qualify for EI to 120 insurable hours worked in the prior year. Additionally, new EI claimants are eligible for a minimum benefit of $400 per week for regular benefits or $240 per week for special benefits, which is available for a minimum duration of 26 weeks.
With the proposed changes in the EI program, EI rates will be frozen for two years at their 2020 levels ($1.58 per $100 of insurable earnings for employees and $2.21 per $100 of insurable earnings for employers).
Proposed New Benefit Programs
The Federal Government is also proposing three new taxable benefit programs that will be in effect for one year following the end of CERB payments on September 27, 2020.
Canada Recovery Benefit
The Canada Recovery Benefit (“CRB”) would provide $400 per week up to 26 weeks to workers who are self-employed or are not eligible for EI, who still require income support due to reduced employment/self-employment income for reasons relating to COVID-19, and who are available and looking for work. This benefit would allow individuals to earn employment income while receiving the benefit but will require repayment of some or all of the benefit through their income tax return if their annual net income, excluding the benefit payment, is over $38,000.
Canada Recovery Sickness Benefit
The Canada Recovery Sickness Benefit (“CRSB”) would provide $500 per week for up to two weeks to workers who are sick or have to self-isolate, and who do not otherwise receive paid sick leave.
Canada Recovery Caregiving Benefit
The Canada Recovery Caregiving Benefit (“CRCB“) would provide eligible households $500 per week for up to 26 weeks to individuals unable to work because they must care for:
- a child under 12 years of age due to the closure of schools or daycares, or because the child cannot attend school or daycare as they are an individual who is high-risk; or
- a family member with a disability or a dependent due to the closure of their day program or care facility, or because the individual cannot attend a care facility as they are an individual who is high risk.
Households will not be eligible for the CRCB if anyone within the household earns paid leave or currently receives CERB, EI, CRB, CRSB, short-term disability benefits, or workers’ compensation benefits.
The COVID-19 pandemic is creating novel challenges for organizations. MLT Aikins LLP is closely monitoring this evolving situation and can assist organizations in determining which benefits would be available to their employees during any particular layoff or leave of absence from employment.