Turnover rates are on the rise in recent years. In fact, the Financial Post found that one in four talent acquisition specialists state that employee turnover has increased since last year. This may be due to unacceptable work conditions or employees looking for better benefits elsewhere. If you find yourself in that kind of situation and are working a small side gig wondering if you can still work while on employment insurance while looking for your next gig, keep reading to find out.
Do you qualify for employment insurance?
Whether or not you qualify for Employment Insurance (EI) can be a little ambiguous. The best way to find out whether you qualify is to simply apply. However, the Government of Canada does outline a few general points. You have to demonstrate that you:
- Were employed and that your employment was insurable
- You lost your job through no fault of your own (you did not quit)
- Were affected by natural disasters and could not work
- Have not worked or been paid for 7 consecutive days in the last 52 weeks
- Have worked for the required number of insurable employment hours
- Are looking for employment and are ready and willing to work
If these points apply to you, then you may be eligible for employment insurance. If the government finds that you are eligible, you’ll be required to complete bi-weekly reports by internet or telephone to prove that you are actively looking for employment and still qualify. Failure to comply may put an end to your employment insurance payments.
How much can you get paid on employment insurance and for how long?
Most employees will receive EI benefits of up to 55% of their average insurable weekly earnings. However, Employment Insurance pays a maximum amount of $638 per week. Therefore, if 55% of your income amounts to more than $638 per week, you would still only receive that amount. The amount of time on which you can receive EI benefits depends on the what the employment rate is in your region. Usually, however, unemployment benefits can last approximately 14 to 45 weeks. 45 weeks is the maximum amount of time someone can by on EI — so you can potentially be covered for almost an entire year.
Can you work while on EI?
Many believe that in order to be on employment insurance, you have to be unemployed. Luckily, that’s not the case. In 2018, the government of Canada made the Working While on Claim program permanent, which allows people to keep receiving EI even after having acquired new employment. They did so in an attempt to incentivize employees to return to work since it will make it possible to receive more money than if they were just receiving their EI benefits.
Although the Government of Canada made it possible to keep receiving EI benefits even after acquiring new employment, EI benefits will be affected if you do choose to go that route. In fact, you will receive 50 cents of your benefits every dollar you earn up to 90% of your previous weekly earnings. Anything above this limit, and your benefits will be deducted dollar for dollar. However, keep in mind that if you work an entire week, you’ll no longer be eligible to receive employment insurance benefits. Moreover, if you start working again and your earring are greater than your average insurable earnings, you will not receive EI benefits for that week.
Are EI benefits taxable?
Employment insurance benefits, like any other regular income, is considered to be taxable income in the year in which it was received. Just like any other income, earnings received from Employment Insurance benefits is going to be reported on your T4 slips during the next tax season.
If you’ve recently lost your job, did not qualify for employment insurance benefits, and are struggling to make ends meet, use Allevia’s online budgeting tool. Oftentimes, you can remedy your financial situation through a simple budget reorganization. However, once you input all of your income and expenses into Allevia, they will recommend different solutions based on your personal situation so that you can rid yourself of your financial burdens.
