EI rules may force people to deplete retirement savings

A lawyer dealing with disadvantaged clients says stricter Employment Insurance rules could hurt people who are out of work in Thunder Bay.

New rules that came into effect Sunday could make fewer people eligible for Employment Insurance

A lawyer dealing with disadvantaged clients says stricter Employment Insurance rules could hurt people out of work in Thunder Bay.

New regulations came into effect this week requiring Employment Insurance recipients to look for and accept a broader range of jobs with lower wages after a certain amount of time collecting benefits. The timelines are largely based on how frequently someone has received EI. 

The co-ordinator of legal services at the Kinna-aweya Legal Clinic said changes to Employment Insurance rules could have long-term financial consequences for people who lose their jobs.

Sally Colquhoun, co-ordinator of the Kinna-aweya Legal Clinic, says if people become ineligible for EI, they may be forced to go on social assistance. But before going on social assistance, they have to first deplete any savings they may have — including retirement savings. (Beth Ponka/Kinna-aweya Legal Clinic)

"What we've seen in the past when changes have been made to Employment Insurance, making it harder for people to get Employment Insurance benefits, if they have no income ... then social assistance is somewhere that they would turn to try to get money to pay for basic needs," Sally Colquhoun said.

To qualify for social assistance, people have to first spend their assets, including retirement savings, she added. But if people are allowed to stay on EI, they can keep those assets — and better recover financially — once they find a job.

"If you have to ... spend all of your retirement savings before you can get eligibility for social assistance, then even if you do find another job, it's going to be much harder for you to get back to the same place that you were at," she said.

Colquhoun said changes to Employment Insurance over the last decade have made fewer and fewer people eligible for the benefit. About 15 years ago, about 80 per cent of people who lost their jobs were eligible for Employment Insurance benefits, she estimated. Now less than half of people who lose their jobs can qualify for EI.

Colquhoun said she's also concerned about expected changes to the way EI services are delivered. As government positions are cut, people in Thunder Bay will not be able to deal face-to-face with local staff who are familiar with northwestern Ontario's economic climate. Instead, their EI applications and concerns will have to be dealt with over the phone or online.

Government spokesperson says "common sense will apply"

But a spokesperson for Diane Finley, Minister of Human Resources and Skills Development, said the new rules are intended to help people collecting EI expand their job search and will not punish anyone financially.

"Common sense will apply here," Alyson Queen told CBC on Wednesday. "If an individual is in a situation where they're playing by the rules, they are doing whatever is reasonable ... in order to find work, but the opportunities just aren't there, then Employment Insurance will continue to exist for them as it always has." 

Queen added that EI officials "will never ask an individual to take a job that makes them worse off financially than by being on EI alone." She said individual circumstances, including child-care expenses and access to transportation, would be taken into account when deciding if someone is required to accept a job offer.

"When all of that is considered, if the person is not financially better off by taking that job than by being on EI alone, then no, they won't be expected to take it."

Queen pointed out that the EI changes also add an e-mail service notifying recipients about job opportunities in their area.