Employment Insurance provides financial assistance to Canadians who suddenly find themselves out of work. If you’re an EI recipient who’s recently found employment, you may be wondering how many hours you can work before your benefits are cut.
As an EI recipient, you’re allowed to work part-time while still receiving partial EI benefits. Once you start working full-time, though, your EI benefits will stop.
Below, I’ll explain how working on EI works in further detail, plus exactly how many hours can you work while on EI in Canada.
Employment Insurance (EI) was first introduced in Canada in 1940, over eighty years ago. This government program provides aid to employees who are laid off, fired, or need to take time off of work due to sickness, injury, or other eligible events.
As such, this benefit is primarily designed for individuals who are not working.
To be eligible for EI, in the first place, you have to provide verification that you’re not currently working. This has led many Canadians to assume that their EI benefits will instantly stop as soon as they start working again.
While I see the logic, thankfully, this isn’t true.
If you’re currently receiving EI benefits, then the government allows you to work part-time while still receiving your benefits.
Of course, your benefit payments will be reduced to reflect the additional income you’re earning. According to the CRA, workers can keep 50 cents of their previous benefits for every dollar that they earn (up to 90% of their previous weekly earnings).
The 50 cents per dollar will then be subtracted from the previous amount of their benefit.
- If you’ve been collecting $400 per week in EI and start working a part-time job that pays you $250 per week. If you do the math (0.50 x 250), you get 125. This means that $125 will be subtracted from your previous EI payment ($400 – $125 = $275).
If you want to continue receiving your weekly EI benefits, then you’ll only be allowed to work a part-time job. In Canada, full-time work is considered to be more than 40 hours per week.
In other words, if you want to continue receiving your benefits, then you’ll need to work less than 40 hours per week.
The moment that you surpass working 40 hours in a week, your benefits will be halted.
- Related Reading: Can I Collect EI While I’m Retired?
At this point, you may be wondering, “How does the government know how much I make on a weekly basis?”
As an EI recipient, you’re required to complete a monthly form detailing how much money that you earned during the previous month. Keep in mind that the employers will provide the same information to the CRA when they file their own business taxes at the end of the year.
Trying to cheat and receive more EI benefits than you’re entitled to by lying on this report is a criminal offense.
If the records you provide don’t match up with the records provided by your employer, then you could face serious trouble. If you get away with a slap on the wrist, you may just be required to pay the overage amount back to the government in taxes. In extreme cases, you may face charges for fraud.
Here’s a piece of advice I always give people about reporting taxes and claiming benefits, “If you think that it might be cheating, don’t even try it.” You might get away with misreporting information in the short term, but it will eventually catch up with you, and the consequences aren’t worth it.
You can work any type of job that you want while you’re receiving EI benefits. Just make sure that you’re not working more than 40 hours a week. As long as you’re just a part-time employee, you’ll continue to receive a portion of your EI benefits.
If you’re looking for a great part-time employment opportunity to bring in extra income while you’re still receiving EI benefits, take a look at my post on the best online side jobs you can work from home.
Unfortunately, you’re not eligible for EI just because your hours were unexpectedly cut. To apply for EI benefits, you must not be working or receiving income at all.
How to Apply for EI Benefits
Applying for Employment Insurance benefits requires a clear understanding of eligibility criteria and required documentation. After facing job loss or experiencing circumstances like sickness or injury that prevent you from working, the next logical step is to apply for EI.
The process involves submitting an online application through Service Canada’s website. Be prepared to provide accurate information about your employment history, reasons for not working, and any severance or additional payouts you may have received.
If you’re receiving regular EI benefits, you may continue receiving payments for at least 14 weeks but no more than 45 weeks. While receiving regular benefits, you’ll be required to provide updates and changes to your income, which means that your benefits may constantly change during this period.
Types of EI Benefits
EI isn’t just for those who are laid off. There are several types of EI benefits available to Canadians:
- Regular benefits for those who lose their jobs through no fault of their own.
- Maternity and parental benefits for those who are pregnant, have recently given birth, are adopting a child, or are caring for a newborn.
- Sickness benefits for those unable to work due to illness or injury.
- Compassionate care benefits for those taking care of a family member who is gravely ill with a significant risk of death.
- Family caregiver benefits for those caring for a critically ill or injured person.
Understanding Deductions and Taxes
Receiving EI benefits doesn’t mean you’re exempt from the claws of the taxman. Come tax season, remember that EI benefits are taxable. Depending on your annual income, you might owe additional taxes.
Additionally, if you work while receiving EI, your benefits could be reduced. The government allows recipients to earn a certain amount before making deductions, but after that threshold, there’s a 50-cent deduction for every dollar earned.
How does EI determine if I am working while receiving benefits?
EI requires recipients to submit bi-weekly reports detailing any work and earnings. Additionally, employers report earnings to the CRA, which can be cross-referenced with your claims.
What happens if I work more hours than allowed while on EI?
If you work more hours than allowed, your EI benefits may be reduced or halted, depending on the number of hours worked.
EI benefits are a great short-term solution for those who are between jobs, sick, or who are injured on the job. However, if you’re relying solely on EI benefits to pay your bills, then you’re eventually going to fall behind.
As soon as you’re able, I recommend that you at least look for part-time work. Looking for an easy (but profitable) way to make some extra money on the side?
Keep on reading to see my list of the best driving apps that allow you to earn money on your own time!