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Exploring Special EI Benefits

As massage therapists we tend to gravitate towards career positions that classify us as self-employed.


April 13, 2012
By Andrea Collins RMT

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As massage therapists we tend to gravitate towards career positions that classify us as self-employed. A distinct disadvantage to this classification has been the lack of accessibility to the Employment Insurance (EI) benefits system… until now.

The Canadian government decided it was unfair that self-employed individuals did not have access to these benefits.  As a result of this, changes took place in January 2010 to allow the self-employed access to maternity leave, parental leave, sickness benefits and compassionate care benefits. In order to qualify for this program you must be a Canadian citizen, or have permanent resident status, as well as make at least $6,000 in a year.

The details of each benefit include:

  • 15 weeks of maternity leave for the birth of a child;
  • 35 weeks of parental leave for either partner for care of a newborn, newly adopted child or children;
  • 15 weeks of sickness benefits that would cover leave due to illness, injury or the need to be in quarantine;
  • six weeks of compassionate care benefits would apply if you need to take time away from your work in order to care for family members who are seriously ill with a significant risk of death.

These benefits could be combined, if appropriate. For example, if you are pregnant, and develop complications that restrict you from working, you could apply for the sickness benefits and then the maternity benefits for a total of 30 weeks – and, then, if you choose to add in the parental leave, you could add those on for a total of 65 weeks.

What are the premiums?
The premium calculations will vary by year. In 2011, for every $100 you earned, you would have needed to contribute $1.78 in EI premiums up to a defined maximum. In 2011, the maximum premium was $786.76. (This calculation applies to all of Canada, except Quebec, as it has its own maternity, paternity and parental benefits).

Once you have registered, you have 60 days to cancel if you change your mind and you will not have to pay any premiums. If after 60 days you decide that you do not wish to participate, you can terminate your registration at any time – as long as you have not claimed any benefits. Your termination will be effective at the end of the year and you will have to pay the premiums for the remainder of the year. If you do claim benefits, you are now required to be enrolled in the program indefinitely. You will be required to pay the premiums for the entire duration of your self-employment career, “regardless of any change in the nature of your self-employment.” In other words, whether you later become a landscaper or private chef, if you are self-employed, you will pay premiums.

Massage therapists have opportunities to work in multiple locations. The arrangement could involve being employed at one location and being self-employed at another. If this is your case, you can still opt in to the special EI benefits for the self-employment portion of your income.

How do claims work?
If you place a claim, you would receive 55 per cent of your average weekly earnings up to the defined annual limit. The defined limit for 2011 was $44,200, which means that you could receive up to $468 per week. If you continue to work, or if your business continues to generate earnings, and you apply for these benefits, your benefit would be decreased based on those earnings. The actual calculation is decided by Service Canada. As with the regular EI benefits program, you have a two-week waiting period with no income before you can start to receive your claim.

Why do I need this?
An RMT who builds  a 25-year career and earns, on average, $20,000 per-year would contribute $356/year. This works out to $8900 in EI premiums over the course of this RMT’s career. If this RMT were to access all the benefits (that is, 71 weeks-worth) at $212 (55 per cent of $20,000) he/she would be able to claim $15,052!

The point is: if you have the patience to deal with Service Canada, and can plan ahead for the two-week waiting periods, this program might be something to look into! If you are still at the early stages in your career, and are planning for a family and a long career, these new options are very appealing.

For those who are self-employed in Quebec
If you are self-employed in Quebec, you are already entitled to apply for maternity, paternity and parental benefits through the Quebec Parental Insurance Plan. If you choose to also participate in the EI program, you will be eligible for EI sickness and compassionate care benefits.

In Quebec, you can access the sickness and compassionate care insurance for $1.41 for every $100 to a maximum of $623.22 for the 2011 year.

Please note that this is a summary of the special EI program. Please investigate with Service Canada, with respect to your exact situation and how the program would apply to you.

It is nice to see that the government has recognized the inequality of the EI benefit system and made these changes. In our current climate of economic uncertainty, to have benefits extended to us is a welcome improvement. Hopefully, the government will have other programs that are normally reserved for the employed extended to the self-employed. For instance, there have been rumours that the government is looking into a pension plan for the self-employed sometime in the future… we can only wait and see.

SAMPLE CASES:
(all numbers have been rounded)

  • Jane is an RMT who works for a spa as an employee, and also works at a clinic where she pays a monthly rent and is self-employed. Her annual net earnings are $10,000 at the spa and $14,000 from the clinic. Because she has made more than $6,000 (at the clinic) she is eligible to apply for special EI benefits, which she does in January 2011. Her total combined income is $24,000 (approximately $462/week), she will have paid approximately $178 on her earnings from the spa and $249 ($14,000 / 100 x $1.78) for the clinic. Her total EI premiums for the year would be $427. Jane is now pregnant and the baby is due in March 2012. She will be taking maternity leave for 15 weeks. Her self-employed claim would be for $148 per week ($14,000 / 52 weeks x 55 per cent) in addition to the regular EI benefits from the spa; providing there is no additional income during that time. During her maternity leave Jane would be able to claim $3,810 after the mandatory two-week waiting period.
  • Philippe is a massage therapist in Quebec working at a clinic as a self-employed individual. He earns $30,000 a year after deductions ($577 per week). Philippe understands the physical nature of massage and wants peace of mind in case he gets injured. His income level allows him to register for special EI benefits. Since Philippe is in Quebec, his premium would be $1.41 per $100 of earnings for his premium, and his annual premium would be $423. If Philippe had to access the benefits due to injury he would be entitled to $317 ($30,000 / 52 weeks x 55 per cent) per week for up to 15 weeks for a total of $4,760, after the mandatory two-week waiting period).

Jane and Philippe would be committed to paying for EI for the rest of their self-employed careers.
 

References
www.servicecanada.gc.ca/eng/ei/publications/sew_publication.pdf and www.servicecanada.gc.ca/eng/sc/ei/sew/index.shtml


p27_Andrea-Collins.jpg

Andrea Collins, RMT, has been a massage therapist for over 12 years. Andrea has worked in a variety of settings, owned her own clinic and now practises from her home. Andrea has created techniques and business workshops to help therapists expand their practice and will be teaching the business course at a private massage college starting in January. She is currently working on a business book for RMTs that is due out this year. For more information about Andrea please visit www.haltonholistichands.ca.


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