Self-employed slow to take up employment insurance
Less than 0.5% have opted for coverage that offers benefits for parental and sick leave
It took two weeks, but eventually, after much frustration, Shannon Jardine was put on hold.
It was progress, sort of, a modest win but not everything the veteran Canadian actress had hoped for when she first tried to sign up for the government's employment insurance program for the self-employed.
It was a long process, she recalls with a sigh, much of which was spent just trying to get something other than a busy signal when she called the information line at Service Canada.
"I encountered a lot of difficulty," Jardine told CBC News. "I absolutely could not get through."
Things got more frustrating after that, as red tape and conflicting answers to her questions started to pile up.
Jardine is one of only several thousand self-employed individuals who have enrolled in the voluntary EI program, which entitles the self-employed to some of the same benefits enjoyed by other Canadian workers. Specifically, it makes them eligible for what are known as "special benefits," which cover time off work for maternity and paternity leave, illness and compassionate-care obligations.
Similar benefits have been available to the self-employed of Quebec since 2006.
Jardine wanted to sign up because she had a big pay day coming — she'd just been cast in a movie, the upcoming family comedy Step Dogs — and was pregnant. She planned to pay into the EI program with her movie money and take a maternity leave once her baby was born. It took a while to find out that that wasn't entirely possible.
Catches and shortfalls
The program has met with limited interest since its debut. Of the roughly 2.7 million Canadians who are self-employed — small business owners, real estate agents, lawyers, farmers and the like — less than one half of one per cent have taken Ottawa up on its offer. According to Human Resources and Skills Development Canada (HRSDC), which oversees EI, 7,114 self-employed people had signed up for the program as of March 2011, the most recent date for which the department has figures. Of those, 259 had made claims of some sort, collecting a total of $740,000.
Do I qualify?
To be eligible for special EI benefits as a self-employed individual, you must have reduced the amount of time devoted to your business by more than 40 per cent because:
- Your child was born.
- You are caring for your newborn or adopted child or children.
- You are ill, injured or in quarantine.
- You need to provide care or support to a gravely ill family member.
To qualify for benefits in 2013, you must have earned at least $6,342 in 2012 and have paid EI premiums for at least 12 months.
Source: Service Canada
Some accountants and financial advisors warn their self-employed clients away from the program, in part because of its catches and shortfalls when compared to the benefits available to other workers.
Unlike regular employees, the self-employed must pay into the program for at least 12 months before making a claim. They pay premiums at the same rate as employees. For 2013, that rate is $1.88 for every $100 in insurable earnings, up to an annual maximum of $891.12 (In Quebec, where the self-employed are partly covered by the provincial parental insurance program, it is $1.52 for every $100 of earnings, up to a total of $720.48 for the year.)
Since the self-employed are not entitled to unemployment benefits, they don't pay the employer portion of premiums — and won't receive benefits if their business folds, for example.
To qualify for special benefits, the self-employed must have made a minimum amount of money in the previous year. That minimum changes from year to year. To qualify for benefits in 2013, one must have made at least $6,342 in 2012.
Passive income could reduce benefits
One potential pitfall that the self-employed face is that if their business generates income while they are receiving benefits, it will reduce the amount of benefits they get (often dollar-for-dollar) and could outweigh any advantage of opting into the program.
Many of those who own their own businesses also have difficulty getting away from their work and meeting the requirement that stipulates that in order to claim special benefits, they must have reduced the amount of time devoted to their business by more than 40 per cent because of illness or family obligations.
And once a self-employed person makes an EI claim, they cannot opt out of the program, and must continue to pay premiums for as long as they are self-employed.
Jardine said she realizes now that she made her claim too late to be eligible for maternity leave — she was already pregnant when she started making inquiries in December, so could not have made the required 12 months of premium payments before needing the benefits.
How much do I get?
The kind of benefits that the self-employed are entitled to are:
- Maternity benefits — up to 15 weeks for birth mothers.
- Parental — up to 35 weeks for biological or adoptive parents.
- Sickness — up to 15 weeks for people who can't work because of sickness or injury.
- Compassionate care — up to six weeks for people who can't work because they need to care for a severely ill family member.
The benefit payment is equal to 55 per cent of one's average weekly earnings from self-employment in the calendar year before the claim is submitted up to a weekly maximum of $501 (for the year 2013).
But she says further delays, which she blames on poor training of Service Canada personnel, prevented her from being eligible for the shorter paternal leave.
These delays included getting conflicting answers to her questions about how the program would deal with her combination of self-employment income and her earnings from employment as a part-time bookkeeper and co-producer of the reality series Dust Up. (Those who have income from both self-employment and insurable earnings as an employee can choose to apply for special benefits as a self-employed person or as an employee, according to Service Canada.)
At one point, she was also told not to bother going into her local EI office, in Regina, because the staff would not have the training to help her.
Jardine was also frustrated to learn that an access code she needed in order to enroll in the program had to be sent to her in the mail — she offered to pay for a courier but was told that wasn't possible — and that she couldn't pay into the program until she received that code.
She laughs at the memory of trying to give money to the government and being turned away.
"If I hadn't gone through all this rigmarole, I'd qualify for parental leave today," she said. "But because it took me those weeks to get through, and because of the conflicting stories, and waiting for the access code, all the money I earned [on the movie] I wasn't allowed to pay into EI.
Flawed but useful
As a member of the national council of the actors' union ACTRA and vice-chairperson of its women's committee, Jardine comes into contact with many self-employed people who could potentially benefit from the EI program. But she says the government agencies administering the program need to iron out the kinks if they want to see more people taking advantage of it.
"They need more people on the phone lines, and they need to have more people trained on the technicalities, not just on the phone but on the ground," she said.
A spokesperson for Human Resources and Skills Development Canada said the department cannot comment on individual cases but that front-line staff who man the 1-800-O-Canada hotline have been provided with an overview of the EI program for the self-employed and the specialized agents at the employment insurance call centre have received additional in-depth training
Jardine has since relocated to Toronto and, now 29 weeks pregnant, plans to coast on her savings and do more bookkeeping until she's ready to return to acting. She eventually completed the EI enrolment process with Service Canada and, despite all the hurdles, says she would recommend the program to friends and colleagues, including those thinking of starting a family.
"It may be a flawed program, but it is at least something that can be of help to self-employed women if they decide to opt in," she says. "At least now they have that opportunity to do so."