COVID-19 has resulted in dramatic changes not just to Canada’s economy but also to government programs intended to support Canadians. One program designed specifically to address COVID-19 is the Canada Emergency Response Benefit (CERB).
The CERB program is expected to end on September 26. In anticipation, the Government of Canada is finalizing plans to create three (3) new benefit streams. These are aimed at supporting workers negatively impacted by COVID-19, whether related to health or economic downturn.
The following summarizes the latest information relating to proposed changes to these government programs. These programs are important because they are critical to supporting employees managing issues relating to termination of employment, severance, and wrongful dismissal.
Adjustment to Current EI Programs
The following summarizes expected EI program changes as we head towards 2021. These changes are aimed at expanding access to EI as the instability in the labour market continues and a substantial percentage of employees are at risk of dismissal, whether it result in wrongful dismissal or fair severance packages.
1. Qualifying Periods and Insurable Hours Credit
The qualifying period for those applying for EI is extended to 16 weeks for applicants who are transitioning from CERB to EI for a period that began before July 5, and 24 weeks for applicants transitioning having started CERB after July 5, 2020.
There will be no waiting period for regular, sickness or maternity/parental EI claimants.
EI applicants are also expected to be granted a one-time credit of insurable hours in the following amounts:
- 300 insurable hours for those applying for regular EI benefits
- 480 insurable hours for claims for special EI benefits (sickness, maternity/parental, family caregiver, or compassionate care)
The insurable hour credit is expected to be retroactive to March 15, 2020 and available for one year. Applicants will therefore qualify for EI with a minimum of 120 hours of work in the year prior to their application, or since their last claim.
2. Minimum Unemployment Rate for Determining Benefits
The minimum rate for all EI economic regions will be the higher of 13.1%, or the unemployment rate of the region where the applicant worked for the period from August 9, 2020 until September 5, 2020. This minimum rate will have the following impact:
- lower the number of insurable hours required to qualify for EI regular benefits to 420 hours for most claimants (from which the hours credit described above can be applied)
- provide a minimum entitlement of 26 weeks of regular EI benefits for claimants
- ensure that earnings calculating the benefit rate is based on 14 weeks of earnings
3. Minimum Benefit and EI Premium Rate Freeze
Starting September 27, claimants receiving EI will be eligible for a minimum benefit rate of $400 per week (or $240 per week for extended parental benefits). Applicants who qualify for a higher EI benefit rate based on their average weekly earnings will still receive the higher rate.
The Government of Canada is also expected to freeze the EI insurance premium rates at the 2020 level for 2 years, keeping the employee rate of $1.58 per $100 of insurable earnings and the employer rate of $2.21 per $100 of insurable earnings.
New Benefit Programs
The following are three new programs that the Government of Canada is considering implementing following the ending of CERB.
1. Canada Recovery Sickness Benefit (CRSB)
The CRSB will provide employees with $500 per week for up to 2 weeks.
CRSB will be available to workers who (i) are sick or must self-isolate for reasons related to COVID-19, (ii) are at least 15 years old, (iii) are employed or self-employed, and (iv) had employment and/or self-employment income of at least $5,000 in 2019 or in 2020.
CRSB must only be provided if they are not receiving other paid sick leave for the same benefit period.
2. Canada Recovery Benefit (CRB)
The CRB will provide a benefit of $400 per week for up to 26 weeks.
CRB will be limited to workers who (i) are at least 15 years old, (ii) have stopped working as a result of the COVID-19 pandemic (other than by voluntary resignation) and are available and looking for work or are working and have had a reduction in employment/self-employment income for reasons related to COVID-19, (iii) are not eligible for EI, and (iv) had employment and/or self-employment income of at least $5,000 in 2019 or in 2020.
Although claimants can work and receive the CRB, if a claimant’s annual net income in the calendar year, excluding the CRB payment, exceeds $38,000, the claimant would need to repay $0.50 of the CRB payment for each $1.00 of income over this threshold.
CRB claimants would need to apply after every 2-week period and attest that they continue to meet the requirements.
3. Canada Recovery Caregiving Benefit (CRCB)
CRCB will provide $500 per week for up to 26 weeks.
Eligibility for the CRCB will be limited to Canadian residents who (i) are at least 15 years old, (ii) have a valid Social Insurance Number, (iii) are employed or self-employed, (iv) had employment and/or self-employment income of at least $5,000 in 2019 or in 2020, and (v) are unable to work because they must care for:
- a child under age 12 and impacted by COVID-19 related closures of schools or daycares or unavailability of childcare
- a family member with a disability or a dependent who has had their day program or facility closed as a result of COVID-19
- a child, a family member with a disability, or a dependent who cannot attend school, daycare, or other care facility under the advice of a medical professional because of being at high-risk if they contract COVID-19
CRCB will not be available to employees who are benefiting from a paid leave or other benefits such as short-term disability benefits or workers’ compensation benefit.
If you have concerns regarding the status of your employment and/or if you have been impacted by COVID-19 and would like to ensure your rights are protected, contact Toronto employment and severance lawyers Sultan Lawyers at 416-214-5111 or via email at email@example.com.
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