Many people think that because they are self-employed, that they cannot access any EI benefits. However, recent changes made by the government has allowed these types of individuals some access to EI benefits.

In order to qualify, you must first assess whether you are self-employed or not and whether any of the benefits listed to you is of interest.

For some people, this may be a good option. For example, if you operate a company by yourself and you become sick, you have a pretty tough choice to make. You may have to temporarily step away from the business, fully knowing that no more money is coming in to support your financial security. I don’t have to explain how much business you would lose with this decision, but the what if scenario does exist.

A key note from all of this though is that you have to show some remuneration from your company as discussed below. So if you are that person who likes taking dividends every year instead of a wage, you will not qualify. Therefore, if you are interested in access to these EI special benefits, it is suggested that we take a look at what you need to pull in a wage to qualify.

Also, you can terminate your registration at any time—as long as you have never claimed any benefits. This termination will be effective at the end of the calendar year, so you will have to pay EI premiums for the entire calendar year. Once you have claimed EI benefits, your participation in the program lasts indefinitely. You will have to pay premiums for the entire duration of your self-employed career, regardless of any change in the nature of your self-employment.

 

There are five types of EI special benefits:

  • Maternity benefits are for mothers who give birth. These benefits cover the period surrounding the child’s birth (up to 15 weeks).
  • Parental benefits are for any parent (mother or father) to care for their newborn or newly adopted child or children. Either parent can receive benefits, or they can share benefits between them (up to 35 weeks).
  • Sickness benefits are for people who cannot work due to injury, illness, or the need to be isolated in quarantine because they may be carrying a disease (up to 15 weeks).
  • Compassionate care benefits are for people who must be away from work temporarily to provide care or support to a family member who is seriously ill with a significant risk of death (up to 6 weeks). The 6 weeks of benefits can be shared between different family members who applied and are eligible to receive them.
  • Parents of critically ill children benefits are for parents who must be away from work to care for or support their critically ill or injured child. Either parent can receive benefits or they can share benefits between them (up to 35 weeks).

 

Who can register?

You can register if you operate your own business, or if you work for a corporation but cannot access EI benefits because you control more than 40% of the corporation’s voting shares. You must also be either a Canadian citizen or a permanent resident of Canada.

However, some individuals who work independently and are not hired as employees cannot register for these EI special benefits for self-employed people because they are already eligible to receive benefits through the regular EI program. These individuals include:

  • barbers, hairdressers, taxi drivers, and drivers of other passenger vehicles who are not hired as employees but whose employment is insurable under the EI Regulations; and
  • fishers who are included as insured persons under the EI Fishing Regulations.

 

Qualifying for EI

Once you have registered and waited 12 months from the date of your confirmed registration, you will qualify for EI special benefits if:

  • you have reduced the amount of time devoted to your business by more than 40% because:
    • your child was born;
    • you are caring for your newborn or adopted child or children;
    • you are ill, injured, or in quarantine;
    • you need to provide care or support to a gravely ill family member; or
    • you need to provide care or support to your critically ill or injured child
  • you have earned a minimum amount of self-employed earnings during the calendar year preceding the year you submit a claim. This amount may change from year to year. If you want to apply for benefits in 2013, for example, you would need to earn at least $6,342 in 2012; and
  • for EI sickness claims – you have provided a medical certificate as proof that you are unable to work because of illness, injury, or quarantine; or
    • for compassionate care benefit claims – you have provided medical proof showing that a gravely ill family member who is at risk of dying within 26 weeks needs your care or support;
    • for EI maternity or parental benefit claims – you have provided the expected date of birth of the child and the actual birth date once it has occurred, or the official placement date in the case of adoption; or
    • for parents of critically ill children claims – you have provided a medical certificate completed by a specialist medical doctor stating that your care or support is required by your critically ill or injured child.

If you are self-employed and are also receiving insurable earnings as an employee, you can choose to apply for EI special benefits either as a self-employed person or as an employee, as long as you qualify for both.

 

How much money can you get out of the program?

If you are eligible for EI special benefits, you can expect to receive 55% of your average weekly earnings up to a defined annual limit. In 2013, you can receive up to $501 per week, based on the maximum insurable earnings of $47,400 for that year.

The amount of your benefits may decrease if you continue to work or if your business generates earnings while you are collecting EI special benefits.

 

How to register

If you choose to register, you must do the following:

  • Visit www.servicecanada.gc.ca/msca and sign up for My Service Canada Account. This service is accessible online from home, at any Service Canada Centre using one of the many Internet kiosks available, or at a public Internet access site in your community, such as a public library. After you register, we will mail you a personal access code within 10 days.

Once you have your personal access code, use it to log back into My Service Canada Account and register for EI special benefits for self-employed people.

  • If you have already signed up for My Service Canada Account, simply log in and register for EI special benefits for self-employed people.

 

How do you pay the EI contributions?

That depends. If you are a sole proprietorship, then there is a special form on your personal tax return that you will have to fill out in order to pay the contributions (much in the same way CPP contributions are calculated). If you are incorporated, then you simply just start taking EI off of your pay cheques for the year and remit as you normally would with your other tax and CPP withholdings.

 

Still need more information or want to have a chat with someone?

Call us and we will gladly get you in the right direction.