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Employment insurance changes create new conditions for claimants

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Employment Insurance (“EI”) benefits have provided temporary financial assistance to unemployed Canadians for decades. For most claimants, benefits are 55% of their weekly average insurable earnings, to a maximum of $485 per week. On January 6, 2013, several amendments affecting the availability of EI benefits came into effect. These amendments allow the government to differentiate between claimants based on their claims history and define the criteria for reasonable job searches and suitable employment.

The amendments have created three categories of claimants: long-tenured workers; frequent claimants; and occasional claimants. Long-tenured workers are those who have paid into EI for 7 out of the last 10 years and have received 35 weeks or less of EI benefits in the last 5 years. Frequent claimants are those who have had 3 or more claims for which they have received at least 60 weeks of benefits in the last 5 years. Occasional claimants are those who do not fall into either one of the first two categories.

The amendments provide that during the first six weeks of their EI claim, frequent claimants may limit their employment search to similar jobs, which offer 80% of their previous wages. After this six-week period, however, these claimants must accept any suitable job, offering 70% of their previous wages. On the other hand, long-tenured workers may restrict their job search to their own field offering 90% of their previous wages for an 18-week-period, after which they must search for similar jobs which pay 80% of their previous wages. Finally, occasional claimants must seek similar jobs at 90% of their previous wages for six weeks, before looking for similar jobs offering 80% of their previous wages.

The government has also outlined criteria for determining what constitutes a “reasonable job search” and “suitable employment” for the purposes of establishing entitlement to benefits under the Employment Insurance Act. A “reasonable job search” now includes preparing resumes, registering for job banks, attending job fairs and applying for jobs and undergoing competency evaluations. The definition of “suitable employment” will now consider the following factors: the type of work; wages; commuting time; working conditions; hours of work; and personal circumstances, such as health, physical capability to perform the work, family obligations and transportation options.

Alongside these reforms, the government has also launched a new service to provide information on available jobs and labour market conditions to subscribers via email. Human Resources Minister Diane Finley, describes the job alerts system as “an important part of [the] government’s plan to better connect Canadians with available jobs in their area.”

While ensuring that claimants are following through with these new rules is expected to cost the government about $7.2 million per year, the savings to the EI program are expected to be worth $12.5 million in benefits this year and $33 million next year.

According to Statistics Canada, 40,000 jobs were created in December of 2012, which drove the unemployment rate to its lowest in four years. It will take some time to assess whether these new EI rules are better able to link Canadians to these and other jobs created in 2013.

Parisa Nikfarjam