If you are in any form of self-employment (mortgage broker, insurance broker, real estate agent, etc.) and you are in the age of childbearing, as long as are willing to see:
- In the first year, you handed over to the government $850
- In the second year, the government gives you $27,350
Then please keep reading this blog to the special EI benefits in Canada.
EI is the unemployment insurance and is one of the benefits provided by the Canadian government. The full-time employees (FTEs) are all familiar with EI, even if you haven’t got a chance to apply for EI, you must be paying it on a monthly basis anyway. The unemployment caused by the layoffs, the mothers who give birth to a newborn, the dads who go on their maternal leaves, all apply to the EI. The premise of receiving EI is that the EI premium has been withheld from the salary, and the number of hours of work has been stipulated; then, once you can’t continue working, you are eligible for unemployment insurance.
But let’s have a different story here.
- Evelyn Lin, a beautiful single girl from Changsha, China is in her early 30s. Her self-employment income in 2017 was $100,000 (satisfying the minimum annual income of $7,000).
- Miss Lin applied for a special EI and obtained approval in November 2017.
- At the Easter party at the end of March 2018, Miss Lin, who usually drinks lots of wine without face turning red, got drunk somehow.
- She had to be sent back home by her boss, a smart, good-looking, and successful middle-aged man
- Something happened at a later time of the same day
- At the end of April 2018, Miss Lin tried the pregnancy test, two bars, she’s pregnant.
- Miss Lin happily reported her 2017 tax, paid her personal income tax to CRA, and paid the special EI welfare premium of $858.
And this is what happened in 2019:
- On January 1st, 2019, Miss Lin gave birth to a healthy and cute baby.
- Let’s say with a monthly income of 100,000, you earn $2,000 a week; so 55% of $2,000 is $1,100, but the limit for special EI benefits per week is $547.
- Therefore, from January 2019, Miss Lin took 15 weeks of EI for maternal leaves and took 35 weeks of EI for childcare. The total EI pay is for 50 weeks which equals to $547 x 50 = $27,350.
Okay the followings are some important bullet points.
- Who are qualified for this special EI?
- You are a self-employed person, or
- You are an employee of your own company, but because you hold more than 40% of the shares, you can’t take ordinary EI.
- You are a Canadian citizen or PR
- You are not a resident of Quebec
- You can apply online
- You must enter the EI program at least one year in advance and pay EI premiums
- There is free cancellation within 60 days of registration
- The standard for EI premiums in 2018 is: (1) $1.66 for every $100 earned; (2) there is a cap of $858 for the entire year.
- The calculation for taking the EI money back is: (1) you take 55% of last year’s income; (2) there is a limit of $547 per week.
- If you also have ordinary EI, you can take this special EI as long as you meet the requirements.
- Male can apply as well.
- In fact, not only childbirth triggers this special EI welfare, but many other situations such as being sick so unable work, adopting a child, needing to take care of a family member who is seriously ill, etc., can also make people eligible to take this special EI program. However, because it’s really hard to plan this kind of situations, it is difficult to achieve the criteria of special EI.
- EI’s income is also taxable. So going back to the example, in the next year, Miss Lin will receive T4E slip from the government for tax return purpose.
Last words: look at the math, $800 premium payment vs more than $20,000 special EI income per year, so even if the good looking boss missed the shot in Easter 2018, Miss Lin could keep trying it in 2019, 2020… LOL.
Danny Chen, Director & COO, JKtax Inc.
Office #: 905-940-1999；Email: firstname.lastname@example.org；Office wechat: jktax-vivian