Due to challenging financial circumstances, an increasing number of Canadians continue to work despite reaching the standard retirement age of 65.
Unemployment rates have been increasing in Canada, so it comes as no surprise that I’m often asked: Can I collect EI when I retire?
Plenty of complex variables can make a difference in whether or not you can qualify for pension plans and EI benefits during your retirement. Let’s go over them
Can I Collect EI When I Retire?
An important aspect to note here is that the Canada Employment Insurance Commission (CEIC) administers the EI program. The program provides both regular and special benefit payments. Workers have to contribute to the program through deductions from their salaries.
Scenario 1: Lost job, no-fault
Regular EI benefits are paid to eligible employees who lose their job through no fault of their own. Typically, it can include workers terminated because of restructuring and workers who work in seasonal industries.
Assuming that your retirement was forced due to any of the conditions mentioned in the special benefits eligibility requirements, you may receive EI benefits after retirement.
However, if you choose to retire at your own discretion, you can’t qualify for EI benefits. Optional retirement doesn’t fall into any of the EI program’s special benefits categories. On the other hand, regular benefits are also not for workers who choose to stop working.
Scenario 2: Stopped working for a just cause
Another situation in which you can qualify to receive EI benefits is when your reason to stop working was a just cause. However, you have to substantiate to the CEIC that quitting the job was the only reasonable option for you, even though you would have preferred to continue working.
Forced Retirement Scenarios: Situations where employees are pushed into early retirement due to organizational changes, company mergers, or age-related policies can be grounds for EI benefits. Additionally, health problems leading to an early exit from the workforce can also be a factor in EI considerations.
The CEIC may consider the following as justifiable reasons to quit and may qualify you for regular EI benefits in retirement:
- The need to move with a spouse or dependent child to another place of residence;
- Sexual or other forms of harassment at the workplace;
- Discrimination at the workplace;
- Working conditions that endanger your health and safety;
- Having to care for a child or another immediate member of your family;
- Significant changes in your job that may affect your salary;
- A reasonable assurance that you have another job lined up in the immediate future (technically, you wouldn’t be retiring in this scenario);
- Excessive overtime or your employer refuses to pay for overtime work;
- Substantial changes in your work duties;
- Challenging relations with a supervisor, provided you are not primarily responsible for it;
- Your employer is breaking the law;
- Discrimination due to membership in an organization, association, or union of workers; and
- Pressure from your colleagues or employer to quit your job.
Canada’s Employment Insurance (EI) program is a lifesaving program that the Canadian government introduced to provide temporary income to the unemployed while they look for employment or to upskill.
The EI program also offers special benefits to workers who need to take time off work due to specific life events, including illness, pregnancy, caring for a newborn or newly adopted child, a major injury or illness, or a family member becoming seriously ill.
EI and Pension Plans
If you’re an older Canadian who continues to work past the age of 65, you’re entitled to all the benefits you can receive as a working individual.
So, provided that you worked enough hours to meet the EI program requirements at your workplace, you can still qualify for the EI benefits even if you lose your job. In such cases, though, you should apply for the EI benefits as soon as you lose your position so you can start collecting them.
There are several pension programs that senior citizens in Canada can start receiving once they turn 65 years old, including the Old Age Security (OAS) and Canada Pension Plan (CPP) benefits.
OAS is an age-based pension program, while the CPP and Quebec Pension Plan (QPP) are pension programs through which you contribute a portion of your income during your working years.
Does OAS and CPP affect your EI Payments?
You can receive regular EI benefits while receiving your government pensions.
The OAS pension does not affect your eligibility for EI benefits. However, the CPP and QPP programs are related to your work and earnings.
You can collect OAS pensions while working past the age of 65. As long as you meet the working hour requirements, you can simultaneously receive EI benefits and pension payments. However, your CPP or QPP payments will be deducted from your EI benefits and be reported to the CEIC.
Potential Challenges in Collecting EI
While the EI system is designed to support those in need, the path to obtaining those benefits can be riddled with obstacles.
- Meeting CEIC Criteria: The CEIC, in its bid to ensure the authenticity of claims, requires rigorous documentation and proof. Every claim is subject to intense scrutiny. This means applicants must prepare for a thorough verification process, which can sometimes feel invasive or prolonged.
- Overlap with Other Pensions: The Canadian retirement benefits landscape is vast. Retirees often tap into multiple sources for post-retirement income. While some of these sources, like the OAS, might not intersect with EI, others like the CPP or QPP can affect the amount of EI one receives. Navigating these intersections, understanding deductions, and optimizing income can be a daunting task.
- Timely Applications: The EI system operates within strict time frames. From the moment of job loss, there’s a ticking clock, and retirees must initiate their application within this window. Failing to apply promptly can result in a loss of some benefits.
- Reporting Requirements: The EI system requires beneficiaries to be transparent about their financial status continually. Any changes, whether it’s a part-time job, freelance income, or other financial gains, must be reported. This continuous reporting can be tedious and, if overlooked, can have repercussions.
- Navigating Bureaucracy: Like many government programs, the EI system comes with its share of red tape. From understanding the nuances of the application process, gathering the required documents, to following up on application status, retirees often find themselves navigating a maze of procedures.
- Can you collect EI after age 65 in Ontario? Yes, you can collect Employment Insurance (EI) after the age of 65 in Ontario. Age, in itself, isn’t a barrier to receiving EI benefits. However, the primary condition remains: you must have lost your job through no fault of your own and be actively seeking employment. While many Canadians choose to retire by 65, if you continue working and subsequently lose your job, you can still qualify for EI benefits, provided you meet the other standard criteria set by the EI program.
- Do I have to report my CPP on EI? Yes, you need to report your Canada Pension Plan (CPP) benefits when you’re on Employment Insurance (EI). The CPP benefits, being a work-related pension, might impact the amount you receive from EI. In many instances, the EI benefits could be reduced because of the CPP payments, ensuring that the total benefits one receives don’t exceed a certain threshold.
- Does OAS affect EI payments? No, the Old Age Security (OAS) pension does not typically affect Employment Insurance (EI) payments. While EI might deduct amounts based on certain other pensions or income sources, the OAS is not work-related and thus does not lead to deductions from EI benefits. You can receive both concurrently without any reduction in your EI payments due to OAS.
- How do I report severance pay on EI? When applying for Employment Insurance (EI) benefits, you must report any severance pay received. Typically, severance pay can delay the start of your EI benefits, as the EI system considers it as money that compensates for your job loss.
Depending on the specifics surrounding your employment and retirement, you can collect EI when you retire. However, the program is designed to cater only to those who qualify for regular or special benefits.
Even if you qualify, it doesn’t mean you get EI benefits or that you can keep them if you have other retirement earnings like pension income. This is because they will reduce your EI entitlement.