EI Sickness Benefit
Government confirms EI Sickness Benefit Changes Effective December 18, 2022
Earlier this year the Federal Government tabled Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable. Part of the Federal Government’s budget was to extend Employment Insurance (“EI”) sickness benefits from 15 to 26 weeks (a reaffirmation of the proposal in Budget 2021). Last week, the Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough, announced the permanent extension of EI sickness benefits from 15 weeks to 26 weeks beginning on December 18, 2022.
Individuals who qualify and establish a new claim on or after December 18, 2022, will be able to receive up to 26 weeks of EI sickness benefits if they are sick and require this time to recover. EI sickness benefits are paid at 55% of the applicant’s average weekly insurable earnings, up to a maximum weekly benefit of $638 for 2022 and $650 for 2023.
To align with this change, the maximum length of unpaid medical leave available to federally regulated private-sector employees will also be increased from 17 to 27 weeks under the Canada Labour Code. This change effective on December 18, 2022 will ensure that employees have the right to take unpaid job-protected leave while receiving the extended EI sickness benefits.
Impact On Employers
The extension to EI sickness benefits from 15 weeks to 26 weeks will only apply to EI sickness benefits and will not have any immediate impact on the requirements that wage loss replacement plans must meet to qualify for a premium reduction under the EI Premium Reduction Program (PRP). The Government has not provided any details regarding changing the requirements to qualify under the PRP. However, we anticipate that changes will be proposed next year requiring employers to make any necessary changes to ensure their current plans match the 26 week EI Sickness benefit duration and therefore continue to qualify for the PRP.
Employers who have short-term disability (STD) plans that integrate with the EI sickness benefit will need to align to the new 26-week benefit period. If the plan is fully-insured there may be a premium impact for this change.
Employers should review their long-term disability (LTD) plan to ensure appropriate coordination between the EI/short-term disability benefit duration and the waiting period for LTD. Employers without STD whose plan members claim EI benefits prior to LTD, should consider aligning their LTD elimination period with the new 26 weeks EI benefit duration.
If employers do not adjust the disability plan to reflect these changes, there’s a chance employees could receive EI and disability benefits at the same time. For example if a claimant receives EI payments and the long-term disability benefit has a waiting period of less than 27 weeks they may receive EI and LTD benefits at the same time. Employers should advise employees who receive EI sickness benefits to notify Service Canada of their LTD benefits to ensure there are no duplicate payments.
Please contact Giovanna Lau, Director, Employee Benefits at WCBC to review your current disability programs.
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