On May 8, 2020, the federal government of Canada clarified through questions and answers that Employment Insurance (EI) rules allow employers to make additional (âtop-upâ) payments to workers through Supplementary Unemployment Benefit (SPI) plans do not apply to employees receiving the Canada Emergency Benefit (CEP). The PCU offers temporary income support to workers who have stopped working for reasons related to COVID-19.
An employer can establish a SUB plan to supplement Employment Insurance benefits during a period of unemployment. Unless a SUB plan is registered with Service Canada and meets specific requirements, payments from that plan to an employee will be treated as income and EI benefits received by the employee may be reduced.
In response to comments following the initial release of details on the program, the government has changed the PKU so that even if eligible people receive the PKU ($ 2,000 for a 4-week period), they will be allowed to earn up to $ 1,000 in employment and / or self-employment income during each benefit period from March 15, 2020 to October 3, 2020. The new questions and answers clarify that eligible individuals will be required to repay PKU amounts received during a benefit period if, during that period, they receive an amount from any employer that exceeds the threshold of $ 1,000.
The questions and answers explain that employers who wish to submit SUB plans to Service Canada can continue to do so. Registration of SUB plans will allow employers to make payments to employees who are currently receiving EI regular or sickness benefits because they became eligible for those benefits before March 15, 2020.
Employees who became eligible for EI regular benefits or sickness benefits on or after March 15, 2020 are initially only entitled to ECPs (they do not have the freedom to choose insurance benefits -employment rather than ECP); however, once their 16-week eligibility period has expired, they can then apply for regular EI benefits. Registering a SUB plan allows an employer to be prepared if they wish to supplement EI benefits for these employees in the future.
Net result for employers
This new Q&A leaves no doubt that employers will not be able to help their employees by supplementing CERB with a SUB plan. However, employers are encouraged to register SUB plans so that if an employee switches to regular EI benefits after they can no longer receive ECPs (because their 16 week eligibility period has expired), the employer will be able to use the SUB plan to supplement the employee’s EI benefits.