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Normandin Beaudry

The changes to the Employment Insurance Act


There, in black and white

NB Bulletin Vol. 4 N. 7, June 2001

Last February 2nd¸ the Minister of Human Resources Development Canada¸ Jane Stewart¸ tabled Bill C-2 in the House of Commons modifying the Employment Insurance Act. The bill¸ which was given assent on May 10¸ 2001¸ is a reincarnation of Bill C-44¸ tabled in the previous legislature.

The main changes to the Employment Insurance Act are as follows:

Change to the calculation of maximum insurable earnings

Maximum yearly insurable earnings are set at the highest of the following two amounts: $39¸000 or the average industrial wage.

The average industrial wage having been at $31¸700 for 2000 would indicate that the maximum yearly insurable earnings will be set at $39¸000 for many years.

Elimination of the intensity rule retroactive to October 1¸ 2000

The intensity rule aimed at discouraging repeated recourse to employment insurance benefits was set up so that the percentage of the salary applied to the calculation of the benefit diminished according to the frequency of use. Thus¸ an habitual claimant could receive between 50 and 54% of his or her maximum insurable earnings rather than 55%. The rule having proven itself more of a punishment than a deterrent¸ the government decided to abolish it.

Henceforth¸ all claimants will receive 55% of their maximum insurable earnings.

Change to the refund (recovery) clause retroactive to tax year 2000

In the case of high paid salary workers a refund of the employment insurance benefits was required at income tax time and that¸ without distinction between the various types of benefits received.

Since the passing of Bill C-2¸ the recipients of maternity benefits¸ parental or sickness related benefits or those applying for benefits for the first time no longer have to provide the reimbursement and that retroactively to tax year 2000. For all other cases¸ workers having received a net revenue of over $48¸750 will be compelled to reimburse the claims. The maximum amount of the refund is 30% of net income in excess of $48¸750.

Changes to the provisions which apply to parents re-entering the labour market retroactive to October 1¸ 2000

Newcomers in the labour market and those who have reintegrated the labour market had to accumulate more hours of work than other workers in order to be considered eligible for employment insurance benefits. That rule penalized those parents who had been absent for a lengthy period to raise their young children.

With a retroactive effect on all claim periods beginning on or after October 1¸ 2000¸ those persons who received maternity or parental benefits and who return to the labour market¸ would be eligible for regular benefits after having worked the same number of hours as other workers.


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