The Conservative Party released new legislation today, that would allow self employed individuals to begin receiving special Employment Insurance benefits. ¬†The Minister of Human Resources and Skills Development Canada, Diane Finley, says that “”The self-employed have had little or no income protection to cope with major life events, such as giving birth, caring for a newborn or newly adopted child, being sick or injured, or caring for a gravely ill family member. ¬†Extending access to these benefits is the fair and right thing to do.”
Note that the only types of EI benefits that will be available to the self employed are maternity benefits for mothers, parental/adoptive benefits, sickness benefits, and compassionate care benefits.
Maternity benefits are available to birth mothers for a maximum of 15 weeks. ¬†Parental/adoptive benefits are available to either biological or adoptive parents, while they are caring for a newborn/newly adopted child, for a maximum of 35 weeks. ¬†Sickness benefits are benefits that can be paid to a person who is unable to work either because of sickness or injury, for up to 15 weeks. ¬†Compassionate care benefits are available to persons who need to take time off work temporarily to support a family member who is gravely ill, with a significant risk of death. ¬†Compassionate care benefits are available for a maximum of 6 weeks.
Self employed individuals who want to opt into the program must do so at least one year before claiming benefits.
The self employed individual would be able to opt out of the program at the end of any tax year, as long as they have never claimed any benefits. ¬†If they have claimed benefits, they would be required to contribute to the program on their self employed earnings as long as the remain self employed. ¬†In other words, if you plan to join the program, be prepared to remain in the program!
Self employed individuals would pay EI premiums at the same rate as regular employees. ¬†It is interesting to note that, unlike the Canada Pension Plan, the self employed individual would NOT need to pay the employer’s portion, but just the employee portion. ¬†This is apparently because self employed individuals don’t qualify for EI regular benefits, just the special benefits as described above.
All in all, it’s a rather interesting concept. ¬†Introduced as the¬†Fairness for the Self-Employed Act, the legislation will need to pass parliamentary approval before it is law.
Filed under: Business tax
, Other tips
, Personal Tax
by David Boese
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