Part I - Plan Requirements (Cont'd)
3. Receipt of Employment Insurance (EI) benefits
The plan must indicate that the employee must apply for and be in receipt of EI benefits.
4. SUB payments when employee is not in receipt of EI benefits
Notwithstanding item 3, the plan may provide SUB payments up to a maximum of 95% of the normal weekly earnings when the employee is not in receipt of EI Benefits, and:
- is serving the two-week EI waiting period; or
- has insufficient hours of insurable employment to qualify for EI benefits; or
- has exhausted the EI benefit entitlement.
The employer decides which, if any, of the above situations are covered by the plan. If an employer introduces a SUB plan to offset the EI two-week waiting period only, a complete description of the plan must be submitted for approval.
5. SUB payments
The SUB plan must indicate the value of the payments, either as a percentage of the employee’s normal weekly earnings, or a fixed amount.
The weekly SUB payment plus the weekly EI benefit rate applicable to this employmentmust not exceed 95% of your employee’s normal weekly earnings. It should be noted that a lump sum payment does not meet this requirement.
There are two acceptable methods of calculating the amount of SUB payments in order to meet the 95% requirement:
- the gross weekly EI benefit (benefit rate) is deducted from the 95% calculation.
- the EI benefit (after the 25% allowable) and the amount of any other earnings are deducted from the 95% calculation. This allows the employer to take advantage of the 25% that EI allows the employee to earn before deductions are made from regular or training EI benefits.
At the present time, the basic EI benefit rate is equal to 55% of the employee’s weekly insurable earnings up to a maximum payment of $413 per week. Changes to the basic rate of EI benefits could influence the amount of the SUB payments. The plan may provide for an automatic adjustment of the SUB payments when the EI rate is increased or decreased. It should be noted that the basic benefit rate can be altered based on the following:
- a legislative change could increase or decrease the EI rate;
- a family income supplement can increase the EI rate to more than 55% because the employee is in a low-income family and in receipt of the Canada Child Tax Benefit (CCTB). If the employee is entitled to receive the family income supplement, the EI rate will be adjusted automatically.
SUB calculation – no other earnings
| The employee is receiving regular, training or sickness benefits and has no other earnings. | ||
| Example 1 : SUB payable when no other earnings | ||
| A. | Employee's normal weekly earnings | $800 |
| B. | Employee's other earnings | $0 |
| C. | 95% of normal weekly earnings | $760 |
| D. | Maximum EI payment | $413* |
| E. | Calculation of maximum SUB payment (C – D = E) | $347 |
SUB calculation – regular or training benefits plus other earnings
In any week of unemployment caused by temporary stoppage of work or training, a claimant is allowed to earn up to 25% of the EI benefit rate if the benefit amount is $200 or more, and $50 if the benefit amount is less than $200 without reducing the amount of EI benefits received. The claimant must report all earnings. The employer may wish to consider these other earnings and the EI benefit (amount after the 25% allowable) when calculating the SUB payment. Refer to the examples 2 and 3 below for the difference in the SUB payments.
| The employee is receiving regular or training benefits and also has other earnings. | ||
| A. | Employee’s normal weekly earnings | $800 |
| B. | Employee’s other earnings | $160 |
| C. | Maximum EI payment | $413* |
| D. | 25% of the benefit amount allowable ($413x25%) | $103 |
| E. | EI benefit [C - (B-D)] [$413 - ($160-103)] | $356 |
| Example 2: SUB payable without consideration of other earnings (Sample Plan – Part II - item 5 option A or B) |
||
| A. | 95% of normal weekly earnings | $760 |
| B. | Maximum EI payment | $413* |
| C. | SUB (A - B = C) | $347 |
| Example 3: SUB payable if the employer includes other earnings and EI benefit (Sample Plan – Part II - item 5 option C) |
||
| A. | 95% of normal weekly earnings | $760 |
| B. | EI Benefit (as per E above) | $356* |
| C. | Other earnings | $160 |
| D. | SUB (A - B - C = D) | $244 |
SUB calculation – sickness benefits plus other earnings
If a claimant receives earnings during a period of absence from work because of illness, 100 % of the earnings (excluding registered SUB) are deducted from the EI benefits paid for that week. The claimant must declare all earnings. The SUB payment will be the same in both situations, as shown in examples 4 and 5 below.
| The employee is receiving sickness benefits and has other earnings | ||
| A. | Employee’s normal weekly earnings | $800 |
| B. | Employee's other earnings | $160 |
| C. | Maximum EI payment | $413* |
| D. | EI benefit (C - B = D) ($413 - $160) | $253 |
| Example 4: SUB payable without consideration of other earnings | ||
| A. | 95% of normal weekly earnings | $760 |
| B. | Maximum EI payment | $413* |
| C. | SUB (A - B = C) | $347 |
| Example 5: SUB payable if the employer includes other earnings and EI benefit | ||
| A. | 95% of normal weekly earnings | $760 |
| B. | EI Benefit (as per D above) | $253* |
| C. | Other earnings | $160 |
| D. | SUB (A - B - C = D) | $347 |
* Supplemental unemployment benefits may be paid to a claimant who worked for more than one employer. To calculate the payment, each employer offering a SUB must identify the portion of the weekly EI benefit rate based on his employee’s insurable earnings. To obtain confirmation of this amount, please contact your local Service Canada Centre.
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