Digest of Benefit Entitlement Principles - Chapter 1

CHAPTER 1

BASIC CONCEPTS

1.2.0 ESTABLISHING A BENEFIT PERIOD

1.2.1     Qualifying Period
1.2.2     Insurable Employment
1.2.3     New Entrant or Re-Entrant
1.2.4     Special Benefits for New Entrant or Re-Entrant
1.2.5     Regular Qualifier—Claimant other than a New Entrant or Re-Entrant
1.2.6     Increased Entrance Requirement Sanction
1.2.7     Attachment to the Labour Force—Prescribed Hours
1.2.8     Regional Rate of Unemployment
1.2.9     Ordinary Residence
1.2.10   Categories of Claimants

1.2.0 ESTABLISHING A BENEFIT PERIOD

In order to have a benefit period established, an insured person must have accumulated the required number of hours of insurable employment in the qualifying period and must have had an interruption of earnings¹. Any interruption of earnings occurring during the qualifying period would meet this requirement².

There are two categories of claimants: the new entrant or re-entrant and those who are not. The required number of hours of insurable employment for each category of claimants may be found under their specific headings³. The term new entrant or re-entrant is dealt with separately in another section⁴.

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EIA 7; EIR 1; EIR 14;
see 2.1.1, "Definition";
see 1.2.3, "New Entrant or Re-Entrant"; see 1.2.5, "Regular Qualifier-Claimant other than a New Entrant or Re-Entrant";
see 1.2.3, "New Entrant or Re-Entrant."

1.2.1 Qualifying Period

The qualifying period is the 52 weeks immediately preceding the commencement of the benefit period¹; it may be extended under certain circumstances².

Where a previous benefit period had started during those 52 weeks, the qualifying period is limited to the period elapsed between the commencement of that benefit period and the date from which the new benefit period will be effective³.

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EIA 8(1)(a);
see 1.3.0, "Extension of Qualifying Period"; EIA 8(2);
EIA 8(1)(b).

1.2.2 Insurable Employment

As of 1 January 1997, the insurability rules changed from the concept of insured weeks to insured hours. The principle of the hours system is simple: regardless of whether an employee is full time, part time, seasonal, casual or on and off during the year, the hours that are worked or on stand-by¹ and paid for are accumulated towards eligibility for EI benefits. By using hours instead of weeks to calculate eligibility, the claimant is credited with all their paid work.

This approach applies to overtime, which is calculated hour for hour no matter what the rate of pay as well as stand-by hours at the workplace only ² or are paid at a rate equal or higher than the employee's regular rate of pay³. As well, paid leave of any type is insured for the number of hours that would normally be worked in that period, regardless of rate of pay.

In some situations where it is difficult to determine the number of hours worked, the Commission may deem the number of hours worked⁴. When the insurability of employment is in question, the matter is referred to Canada Customs and Revenue Agency for a ruling⁵. This employment is not included in the calculation of the claim pending the ruling⁶.

[May 2004]

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1.2.3 New Entrant or Re-Entrant

A new entrant or re-entrant is a person who during the 52 weeks preceding the qualifying period has accumulated less than 490 hours¹ of labour force attachment².

If the claimant does not have the 490 hours of labour force attachment in the 52 weeks proceeding the qualifying period, then at least 910 hours of insurable employment in the qualifying period are required in order to establish a benefit period³.

Furthermore, re-entrants who have received one full week or more of maternity or parental benefits in 208 weeks preceding the 52 weeks prior to the qualifying period are not considered to be re-entrants⁴ and as a result can qualify for benefits as regular qualifiers for benefit periods established October 1, 2000 and later.

In the context of the implementation of the Quebec Parental Insurance Plan onJanuary 1, 2006, a new principle has been established to guarantee equity in the processing of claims for Employment Insurance benefits that are filed throughout Canada.

This principle of equivalence⁵ extends to benefits paid under a provincial plan a recognition that is similar to maternity or parental benefits paid under the EI program.

A regulation⁶ made in this context specifies that an insured person is considered not to be a new entrant or a re-entrant to the labour force if they:

have been paid one or more weeks of provincial benefits in the referred period of 208 weeks; and
would have been entitled to receive EI maternity or parental benefits for the same period, had they not been paid those provincial benefits.

A claimant must prove that the qualifying conditions, whether they relate to a new entrant or other than a new entrant, have been met⁷. It is up to the claimant to show that he or she is not a new entrant. He or she will be required to provide documentary evidence of labour force attachment such as a Record of Employment, a letter from a relevant person or pay stubs. Of course, the claimant does not need to substantiate information already in the hands of the Commission, such as the number of weeks for which benefits have been paid or earnings that have precluded the payment of benefits.

[September 2006]

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EIA 7(4);
see 1.2.7, "Attachment to the Labour Force-Prescribed Hours";
EIA 7(3); Jurisprudence Index/basic concepts/new entrant or re-entrant/;
EIA 7(4.1);
Refer to 3.4 of the Appendix to Chapter 12;
EIR 76.1(1);
EIA 48(1).

1.2.4 Special Benefits for New Entrant or Re-Entrant

Major attached claimants¹ are eligible for special benefits, provided the claimant meets the conditions and limitations of the Act related to the special benefits claimed². Although the entrance requirements for the new entrant or re-entrant are 910 hours, there are provisions which permit the payment of special benefits to these claimants who have at least 600 insured hours in their qualifying period³. These provisions ensure that all major attached claimants have access to special benefits.

In situations where a violation had been assessed on a previous claim, the claimant will require more than 600 hours of insurable employment during the qualifying period to be eligible for special benefits. Violations range from minor to subsequent⁴ with a related increase in the number of hours required to qualify for benefits⁵.

Furthermore, a new entrant or re-entrant claimant who has received special benefits may subsequently qualify for regular benefits on that claim provided the claimant returns to work and accumulates additional insurable hours which when added to the hours used to initially establish the claim, equal or exceed the number of hours required to establish a regular claim, in accordance with Section 7(2) of the Act ⁶. Regular benefits could then be paid based on the entitlement weeks determined by Schedule 1 of the Act ⁷ and the duration of the benefit period.

An exception to this would be situations where, because of the rate of unemployment, there is no entitlement per Schedule 1 at the time the claim was initially established. This exception is specific to claims which had been established for special benefits with between 600 to 699 insurable hours and the regional rate of unemployment was less than 8%.

[September 2006]

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see 1.2.10, "Categories of Claimants";
see Chapter 11, "Sickness Benefits"; see Chapter 12, "Maternity Benefits"; see Chapter 13, "Parental Benefit"; see Chapter 23, "Compassionate Care Benefit";
EIA 153.1;
EIA 7.1(5);
EIA 7.1(1); EIA 7.1(2); see Section 18.5.3, "The Increased Entrance Requirement";
EIA 7(2) An insured person, other than a new entrant or a re-entrant to the labour force, qualifies if the person.

(a) has had an interruption of earnings from employment; and

(b) has had during their qualifying period at least the number of hours of insurable employment set out in the following table in relation to the regional rate of unemployment that applies to the person;
Schedule 1 of EIA.

1.2.5 Regular Qualifier–Claimant other than a New Entrant or Re-Entrant

A regular qualifier is one who is not a new entrant or re-entrant. In order to establish a benefit period a regular qualifier must accumulate from 420 to 700 hours of insurable employment in the qualifying period. The exact number is found in the Table of Required Hours of Insurable Employment¹ and is dependent on the applicable regional rate of unemployment². The higher the regional rate of unemployment, the lower the number of hours of insurable employment required. Thus, for example, a minimum of 420 hours of insurable employment is required in a region whose rate of unemployment is more than 13%, whereas a minimum of 700 hours would be required where the regional rate of unemployment would be 6% or less³.

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EIA 7;
EIA 7(2); see 1.2.8, "Regional Rate of Unemployment";
EIA 7(2).

1.2.6 Increased Entrance Requirement Sanction

The Act has introduced the Increased Entrance Requirement Sanction for those persons who commit fraud against the EI system. Violations range from minor to subsequent¹ with a related increase in the number of hours required to qualify for benefits².

The objective of this measure is to eliminate any advantage gained by the person as a result of the false statements and to deter repetition of such conduct. Under the Act, the Commission can impose penalties or prosecute persons who receive or try to receive benefits by knowingly making false or misleading statements ³. Any finding for a false or misleading statement will have a notice of violation issued ⁴.

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EIA 7.1(5);
EIA 7.1(1); EIA 7.1(2); see Section 18.5.3 “The Increased Entrance Requirement Sanction”
EIA 7.1;
See chapter 18, "False or Misleading Statements";
EIA 7.1(4).

1.2.7 Attachment to the Labour Force–Prescribed Hours

In calculating the number of hours during which a person was a member of the labour force, account is taken of any hours of insurable employment, any hours for which benefits have been paid or were payable (calculated on the basis of 35 hours per week for each week of benefits paid), as well as any hours prescribed by regulation that "relates to employment in the labour force"1"¹.

The above quoted expression is not defined². Its meaning may be construed using the ejusdem generis rule. According to that rule an expression is defined by reference to those preceding it and by assuming that they all refer to similar situations.

Thus, an hour "that relates to employment in the labour force" is one that is related to a situation arising out of insurable employment or a situation which has precluded the payment of benefit. In fact, it seems reasonable to conclude that the "labour force" here refers to that contemplated by the legislation in general, i.e. insurable employment that enables claimants to qualify for benefits³.

Therefore, for an hour to be considered, it should relate to employment. There are some exceptions to this, as indicated in the Regulations⁴. The following list can be counted as hours attached to the labour force:

a) any hours of insurable employment⁵, including fishing;
b) any week served as part of the waiting period⁶;
c) week of disqualification⁷;

d) any week for which benefits were paid or are deemed to have been paid⁸; benefits here refer to those paid under the Canadian legislation, so that benefits received from another country are to be ignored for this purpose;

e) any week during a benefit period for which EI benefits could have been paid had the earnings to be allocated not been so high⁹, whether or not these earnings arose from insurable employment;

f) any week during which the claimant did not work but nevertheless had earnings that prevented an interruption of earnings, whether or not the claimant had made a claim at the time. For instance, compensatory time off, deferred salary plans and "lay days"¹⁰;

g) any week during which the claimant was attending a course or program following referral by the Commission or an authority designated by Commission¹¹;

h) any week during which the claimant was employed under the self-employment program or job creation program¹²;

i) any week of unemployment resulting from a stoppage of work within the meaning of the legislative provision on labour disputes¹³;

j) any week for which workers' compensation payments for an illness or injury, other than a permanent settlement, have been or will be made¹⁴ provided that such compensation relates to the loss of insurable employment or at least that it has precluded the payment of EI benefits¹⁵;

k) any week, where by reason of incapacity, pregnancy, or for the care of one or more new-born infant or one or more children placed for the purposes of adoption¹⁶, a wage-loss insurance payment has been made or will be made¹⁷, provided that the indemnity relates to the loss of insurable employment or at least that it has precluded the payment of EI benefits¹⁸;

l) any week, where payments have been or will be made due to the preventative withdrawal of work¹⁹, and provided that the indemnity relates to the loss of insurable employment or at least has precluded the payment of EI benefits²⁰;

m) any weeks of income support under TAGS, other than support for early retirement for self-employed and other fishers and plant workers for two years after the last week for which TAGS benefits will be paid.

Any employments prior to January 1, 1997, as well as any of the conditions listed above, are converted from weeks to hours by multiplying the number of weeks by 35²¹.

The total number of hours counted as labour force attachment can be a combination of the above-mentioned situations²². However, if the claimant has more than one situation in any one week, the claimant is credited with the situation that has highest number of hours in that week (i.e.: no "doubling up" of the situations). For example, the claimant worked 36 hours in insurable employment, received one day of temporary total Workers’ Compensation Benefits (WCB) and received a partial week of EI benefits all in one week. The claimant would only be credited with 36 hours labour force attachment due to the insurable employment, as this is the greater amount of hours (the WCB and EI benefits would only equal 35 hours based upon the conversion factor²³).

In the context of the implementation of the Quebec Parental Insurance Plan on January 1, 2006, a provision added²⁴ to the regulation dealing with prescribed hours and weeks²⁵ provides that any week for which provincial benefits - such as QPIP benefits - are paid during the NERE period will be equivalent to 35 prescribed hours that relate to employment in the labour force²⁶.

[September 2006] [June 2003]

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EIA 7(4); EIR 12(1); Jurisprudence Index/basic concepts/new entrant or re-entrant/;
EIA 25(1);
Jurisprudence Index/basic concepts/new entrant or re-entrant/;
see (j), (k), and (l) above as well as EIA 7(4)(c), limiting the legislative text;
EIA 7(4)(a);
EIA 13; EIR 12(1)(b)(iv);
EIR 12(1)(b)(v);
EIA 7(4)(b); see 1.9.6, "Benefit Paid Defined";
EIR 12(1)(a)(iv); EIR 36;
EIR 12(1)(b)(iii); EIA 11(3); EIA 11(4); interruption of earnings; EIR 14(1), EIR 14(3), EIR 14(6);
EIR 12(1)(b)(i);
EIR 12(1)(b)(ii);
EIR 12(1)(c); see 8.4.1, "Stoppage of Work Defined";
EIR 12(1)(a)(i);
limitation contained in EIA 7(4)(c); due to the expression "relate to an employment in the labour force";
EIA 23(1);
EIR 12(1)(a)(ii);
EIA 7(4)(c);
EIR 12(1)(a)(iii);
EIA 7(4)(c);
EIA 7(4); EIR 94.1; EIR 12(1);
EIA 7(4)(d);
EIR 12(1);
EIR 76.12(1);
EIA 7(4)(c); EIR 12(1)(a);
Refer to 3.4.1.1 of the Appendix to Chapter 12.

1.2.8 Regional Rate of Unemployment

In order to calculate the regional rate of unemployment, the country has been divided into a number of regions as listed in the Regulations¹. The regional rate of unemployment applicable to a claimant is the average of the seasonally adjusted monthly rates for the last three month period for which Statistics Canada has produced statistics and which precede the week of the commencement of the benefit period². The seasonally adjusted monthly rate of unemployment is based on the regional rate of unemployment produced by Statistics Canada, which incorporate an estimate of the rates of unemployment of status Indians living on Indian reserves³.

For the purposes of establishing a benefit period, as well as the maximum number of weeks for which benefits, other than special benefits⁴, may be payable, the region which must be taken into account is the one in which the claimant was ordinarily resident during the week in which the benefit period commences⁵. If, in this week, the claimant's ordinary place of residence was outside of Canada, then for the purposes of establishing a benefit period, the region to be taken into account is the one in which the claimant last held insurable employment in Canada⁶.

Where the ordinary place of residence or equally, the location of the last insurable employment held in Canada is so close to the boundary of a region so that it is unclear which of the two regional rates of unemployment would apply, the highest regional rate of unemployment is used⁷.

It is possible that a claimant may eventually have sufficient hours of insurable employment to establish a benefit period when there is an increase in the rate of unemployment in the region where he or she ordinarily resides. If a sufficient increase in the unemployment rate subsequently occurs, the claimant is advised by means of a personal notice.

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1.2.9 Ordinary Residence

The expression "ordinarily resident" is not defined in the legislation¹. Taking the meaning of the word "resident", it must refer to the place in which a claimant has settled². The modifier "ordinarily" clearly excludes from the definition any stay in a place in which a person has no intention of establishing residence.

Thus, in the case of a married person who is frequently employed away from home or is admitted to a hospital for a period of time, the ordinary residence of that person is the place in which the spouse and children reside³. This applies also to persons who maintain a common law relationship or whose family obligations thus attach them more to one place than another.

For an individual who lives alone or has no family obligations, the place in which that individual has settled is the place of ordinary residence; any stay in other locations, even of lengthy duration, does not change this⁴. Therefore, the claimant's stated residence is not always regarded as the ordinary residence.

A change in residence occurs when a person leaves an area with the intention of settling permanently elsewhere and takes along all personal belongings. Sometimes, even the place in which the person temporarily resides before settling permanently may be regarded as the ordinary residence.

It is also possible that the relevant region in which the address falls for postal purposes may be different than the residence. In this case, it is the residence location that is used for regional rate purposes.

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1.2.10 Categories of Claimants

Once a benefit period has been established, a claimant is regarded as a "major attachment claimant" when there are at least 600 hours of insurable employment in the qualifying period¹. The claimant is regarded as a "minor attachment claimant" when there are less than 600 hours but the minimum number required has been met².

Both major and minor attachment claimants may qualify for regular benefits³. However, only major attachment claimants may qualify for maternity⁴, parental benefits⁵ and compassionate care benefits⁶.

A major attachment claimant qualifies for sickness benefit even if the cessation of employment was due to incapacity. A minor attachment claimant who ceases to work due to incapacity is not entitled to sickness benefits⁶.

[September 2006]

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Digest of Benefit Entitlement Principles - Chapter 1

BASIC CONCEPTS

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