Benefit Period of Employment Insurance (8:V)

A. Introduction

When a claim is established, the claimant’s “benefit period” will begin. Under s 10(1) of the EI Act, the benefit period begins on the Sunday at the beginning of the week in which the interruption of earnings occurs, or on the Sunday of the week in which the initial claim for benefit is made, whichever is later, though this is subject to antedating. Benefits will only be paid during the benefit period.

B. Antedating

If an application for EI benefits was not filed within the first four weeks after the claimant’s last day of work, under s 10(4) he or she can ask that the claim be antedated back to the first date when it could have been filed. The claimant must establish that good cause existed for the delay in filing. "Good cause" must be demonstrated for each day until the date of application was actually made. If the claim is filed within the first four weeks, it is automatically antedated to the first date of eligibility.

What is “Good Cause”? Good cause has typically been interpreted narrowly. In one case, the applicant was in the hospital and the Commission denied his application for antedating on the grounds that his wife should have made the claim on his behalf. Simple ignorance of the requirements of the EI Act has not been considered good cause either, though reasonable reliance on bad advice from the employer, union, a legal advisor or the Commission itself usually meets the requirements.

Recently some Boards of Referees have started to use a looser definition of good cause. In Attorney General v. Burke, 2012 FCA 139, a man asked for his application to be back dated because he had expected to be rehired and hence did not apply for EI until after the regular deadline.The Board of Referees decided that the standard for good cause was whether any reasonable person would have done the same, and found the man's case met this standard. This ruling survived appeals to both an umpire and the Federal Court of Appeal, as the umpire refused to interfere with the board’s decision on the basis that it was reasonable and the Federal Court of Appeal found the umpire’s refusal to interfere was itself reasonable. This case may open the door to similar rulings by other Boards.

C. Income That is Treated as Earnings

Section 35(2) of the EI Regulations defines earnings for the purpose of determining whether an interruption of earnings has occurred and all other purposes related to payment of benefits. Income that counts as “earnings” and may delay the start of a claim includes, but is not limited to:

• a) severance pay;
• b) retirement payments and retirement leave credits or payments in lieu;
• c) most bonuses and gratuities;
• d) wages in lieu of notice; and
• e) vacation pay.

Except for (c) – bonuses and gratuities – the earnings above do not prevent interruptions. The claimant should apply as soon as possible after they stop working even if they expect to get some additional money from their employer in the future.

Income regarded as earnings is “allocated” pursuant to s 36 of the EI Regulations. This is usually done at the claimant’s regular weekly rate of pay. Such allocation will delay the start of benefits by the number of weeks the earnings can be allocated to. For example, if a person normally earns $500 per week, and receives $1000 severance pay, their claim will be delayed for an additional 2 weeks after they stop work. This is because it will notionally take two weeks to “use up” the $1000, as the claimant usually makes this amount in two weeks.

Though the claimant will need to wait until the money is used up before being eligible to receive benefits, he or she must still apply for EI immediately. The benefit period will be extended to make up for the weeks it takes to use up these earnings.

D. Income That Is Not Treated As Earnings

Section 35(7) exempts certain sources of income from being regarded as earnings. Recent cases suggest that in certain circumstances some earnings may not delay the start of an EI claim. In Attorney General of Canada v Doreen Myers, 2006 FCA57 the court found that the claimant’s vacation pay did not delay the start of a claim because it was not a payment made by reason of a separation, thus allowing benefits to be received earlier, and possibly at a higher rate.

The case of Attorney General of Canada v Alexander Hamilton, 2007 FCA 104 suggests that a money payment that is made in order to compensate an employee for not pursing remedies for wrongful dismissal is not earnings and will therefore not delay the start of benefits.

See also the case of Attorney General of Canada v Bielich, 2005 FCA 363. In this case the court allowed a $24,000 payment to be exempted from the claimant’s allocation of earnings because the purpose of the payment was to compensate the claimant for giving up his right to seek reinstatement, not to compensate for lost pay.

Income that does not count as earnings and will not delay the start of the claim includes:

• a) disability pensions; and
• b) permanent settlement Workers’ Compensation payments.

NOTE: A retirement pension will not delay the start of a claim. However, it does constitute earnings, and will reduce the benefits payable until the pensioner has worked long enough to re-qualify for EI after the pension commences. From that point on, it is not regarded as income.

E. The Waiting Period

Before receiving any EI benefits, a claimant must serve a two-week “waiting period” during which he or she is unemployed and otherwise eligible for benefits. These two weeks constitute the first two weeks of the benefit period.

This waiting period also applies to pregnancy, parental, and sickness claims. If a claimant works during the waiting period, 100 percent of his or her earnings will be deducted from the first three (and no more than three) weekly benefit cheques.

F. Length of Benefit Period

The benefit period for regular EI benefits is 52 weeks. However, this period can sometimes be extended to more than 52 weeks, like with special benefits. The criteria for this is set out in s 10(10) of the EI Act. The benefit period can be extended when a claimant proves that for any week during that benefit period the claimant was not entitled to benefit by reason of:

• a) receiving earnings paid by reason of the complete severance of the relationship between the claimant and the claimant’s former employer (i.e. “using up” severance pay, vacation pay, etc.);
• b) receiving Workers’ Compensation payments for a total disability; or
• c) receiving payments under a provincial law on the basis of having ceased to work because continuing to work would have entailed danger to the claimant, the claimant’s unborn child, or a child the claimant is breast-feeding.

The benefit period can be further extended under s 10(11) where a claimant can prove that for any week during the extension period, he or she was not entitled to benefit, again for any reason stated ins 10(10).

The length of any benefit period extended for these reasons cannot exceed two years or 104 weeks (EI Act, s 10(14)).

G. Termination of Benefit Period

While a benefit period is normally 52 weeks long, the maximum number of weeks for which benefits may be payable will vary in each case depending upon the individual claimant’s entitlement (see Section VI: Types of Benefits). Once a benefit period is established, it continues to run notwithstanding that the claimant may have returned to work (though full benefits will not actually be paid in this case), unless the benefit period is terminated.

Section 10(8) states that a benefit period terminates when:

1. no further benefits are payable to the claimant in his or her benefit period;
2. the benefit period would otherwise end under this section; and
3. the claimant:
   • a) asks that the benefit period end;
   • b) makes a new initial claim for benefit; and
   • c) qualifies to receive benefit under this part of the EI Act.

NOTE: The way benefit rates are calculated under the EI Act can make the timing of the decision to end one claim and start a new one crucial. Therefore, it may be better for a claimant to terminate an existing benefit period prior to its expiration and establish a new one, in order to use working periods during the benefit period that may improve his or her benefit rate orattachment.