What is Self Employed EI? How it Works

Self Employed EI is employment insurance designed for Canadians who run their own businesses or control more than 40% of their corporation’s voting shares.

If you work for yourself and are a self-employed Canadian or permanent resident, and you are unable to devote the time to the work that you normally do which has led to reduced earnings, you maybe be eligible to apply for employment insurance (EI) special benefits.  

These benefits can help you recover some of the income you have lost.

What Types of Benefits Can I Claim?

There are six types of EI special benefits you may be able to apply for: maternity, parental, sickness, compassionate care, and family caregiver for children or adults.

Maternity benefits cover mothers from the time they give birth until 15 weeks. Parental benefits are for any parent to care for their newborn or newly adopted child. 

Sickness benefits are for those who cannot work due to illness, injury, or the need to quarantine due to potential exposure. Compassionate care benefits are an option when caring for a family member who is seriously ill or at risk of death.

Family caregiver benefits for children or adults are for family members who must care for or support an injured or critically ill adult or child.

When Can I Start Collecting Benefits?

The first thing you must know when looking to access EI benefits is that you must be registered with a waiting period of 12 months. So, if you register on July 13, 2021, you will be able to apply for benefits as early as July 13, 2022.  

Am I Eligible for Self Employed EI?

Some eligibility considerations to consider are you must have a valid and non-terminated registration to the EI Program. 

You must have reduced the amount of time you can devote to your business by more than 40% due to the birth of a child, caring for a newborn, illness, injury, quarantine, providing care or support for an injured, gravely, or critically ill family member.

In addition, you must have earned a minimum amount of self-employed net earnings for the prior calendar year. To make a claim in 2021 that equates to a minimum 2020 net income of $7,555.

Will I Have to Provide Proof of Eligibility?

Yes, depending on the type of benefits you are collecting, you will need to provide evidence. You will need to give the expected birth date and the actual one for maternity or parental benefits once it occurs for adoption, the official placement date.

If you are applying for sickness benefits, you will be required to provide a medical certificate showing that you are injured, ill, or in quarantine. For compassionate care benefits, you must show medical proof that the person in question needs your care or support.

If it is for family caregiver benefits, it requires a medical certificate completed by a medical doctor or nurse practitioner saying that your care is necessary for the person and, in addition, a medical release authorization.

How to Register for Self Employed EI

To register, you must go to the My Service Canada Account. Once there, you will need to sign up, which will trigger a personal access code that will be mailed to you within ten days. Once you have this code, you can log back in and register for the EI special benefits for self-employed people.

How Much Does Having Employment Insurance Cost Me?

To have access to these benefits, you will need to pay an insurance premium. In 2021 this amounts to $1.58 for every $100 you earn based on the previous year’s tax return. For example, if you earned $8,000 in 2020, you would pay $126.40 (($8000/100)*$1.58). 

If you make a lot more money than that, have no fear as there are defined maximums for the insurance, and for 2021 the maximum amount you would have to pay is $889.54. If you sign up for the EI benefits and decide that it is no longer needed, you can cancel, but you must provide a 60-day notice period. 

How Much Money Can I Collect?

The amount you can receive depends on the type of benefits you are looking to collect for with most being in the 55% of your earnings range. 

There is a maximum amount for maternity, standard parental, sickness, compassionate care, or family caregiver benefits of $595 per week. You can collect up to $357 for extended parental benefits.

Canadian EI special benefits can come in handy when unexpected issues happen, reducing the amount you are earning as a self-employed person. When the unexpected happens, you can have a safety net to help get you over the tough times. For more information on what this program offers, you can visit the EI special benefits for self-employed people web page.