Benefit Rates and Income Replacement Rates

Weekly benefits are equal to 55% of the claimants’ insurable earnings (or 33% if claiming extended parental benefits) during their variable best weeks over the qualifying period (generally 52 weeks), up to a maximum amount. This 55% is often referred to the income replacement rate. The number of best weeks used in the calculation is determined by the regional unemployment rate and varies between 14 and 22 insurable earning weeks (see Table under section 14(2) of the EIA). The maximum amount payable is, on the other hand, determined by the maximum yearly insurable earnings. For 2021, this amount is $56,300, which means a claimant can receive up to $595 per week (or $357 if claiming extended parental benefits).[1]

It should be noted that temporary measures introduced in response to COVID-19 have set the minimum benefit rate at $500 per week (or $300 per week if claiming extended parental benefits), if this amount is higher than what the claimant’s benefits would otherwise be.[2] Claimants may also have access to the EI family supplement and to an employer-provided supplemental benefit (“top-up”) plan that partially or wholly covers the difference between the EI benefit rate and the employee’s salary.[3]

Insurable Employment and Insurable Hours

Employment is insurable when it is performed for one or more employers, including the government and the Canadian Forces. Since 2010, special benefits have also been available to self-employed persons who voluntarily register in the program. Accumulating a prescribed number of hours in insurable employment is one of the eligibility criteria for qualifying for EI regular and special benefits.[4]

Some employment is not insurable, such as: casual employment in agriculture, entertainment or rescue operations; employment as a member of a religious order where the person has taken a vow of poverty; employment of a person by a corporation if the person controls more than 40% of the voting shares; and, under certain conditions, employment outside Canada.[5]

Maximum Insurable Earnings

The maximum yearly insurable earnings represent the income level up to which EI premiums are paid and up to which EI benefits are calculated. They increase annually based on increases in the average weekly earnings, as reported by Statistics Canada. The 2021 maximum yearly insurable earnings are $56,300.[6]

Premium Rate

In accordance with subsection 66(1) of the EIA, the CEIC shall set the premium rate for each year in order to generate just enough premium revenue to ensure that, at the end of the seven-year period that commences at the beginning of that year, the total of the amounts credited to the EI Operating Account after 31 December 2008 is equal to the total of the amounts charged to that Account after that date. This calculated premium rate is referred to as the seven-year forecast break-even rate.[7]

As part of the Government economic response to COVID-19, the Government announced that it is freezing the EI premium rate for 2021 at the 2020 premium rate level of $1.58 per $100 of insurable earnings.[8]

Qualifying Period

The qualifying period is, in most cases, the 52-week period preceding the start of the benefit period. During the qualifying period, the claimant must have worked a prescribed number of hours in insurable employment to qualify for benefits. If another benefit period started during the 52 previous weeks, the qualifying period is shorter and begins at the start of the last benefit period.

The qualifying period may be extended by the number of weeks (up to a maximum of 104 weeks) where the claimant was not employed in insurable employment due to a number of specified reasons, such as an illness, injury, quarantine or pregnancy; receiving assistance under employment benefits; or receiving payments under a provincial law for preventive withdrawal (in the case of expectant and new mothers).During the COVID-19 pandemic, the qualifying period is also being extended for those who received emergency response benefits.[9]