Vol. 145, No. 7 — March 30, 2011
SOR/2011-75 March 18, 2011
EMPLOYMENT INSURANCE ACT
ARCHIVED — Regulations Amending the Employment Insurance Regulations
P.C. 2011-420 March 18, 2011
The Canada Employment Insurance Commission, pursuant to paragraph 54(k) of the Employment Insurance Act (see footnote a), hereby makes the annexed Regulations Amending the Employment Insurance Regulations.
March 7, 2011
Canada Employment Insurance Commission
Canada Employment Insurance Commission
Canada Employment Insurance Commission
His Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources and Skills Development, pursuant to section 54 (see footnote b) of the Employment Insurance Act (see footnote c), hereby approves the annexed Regulations Amending the Employment Insurance Regulations, made by the Canada Employment Insurance Commission.
REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS
1. The Employment Insurance Regulations (see footnote 1) are amended by adding the following after section 55.1:
RATIFICATION OF AMOUNTS PAID TO PERSONS WHILE NOT ENTITLED
55.2 The Commission may ratify the amounts paid
(a) to claimants whose benefit period was established in the period beginning on January 4, 2009 and ending on September 11, 2010 following a claim for special benefits; and
(b) for a week that is after the expiry of the benefit period that should have been established with respect to them under subsection 10(2) of the Act, as it read on October 25, 2009.
COMING INTO FORCE
2. These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issue: A regulatory amendment is necessary to provide the Canada Employment Insurance Commission (the Commission) with the authority to ratify the amounts paid to certain claimants of employment insurance (EI) special benefits who were paid special benefits after the end of the benefit period that they should have received as a result of the misapplication of the amendments to section 10 of the Employment Insurance Act (EI Act) contained in Bill C-50 (An Act to amend the Employment Insurance Act and to increase benefits, S.C. 2009, c. 30).
Description: The Regulations, made pursuant to paragraph 54(k) of the EI Act, will provide the Commission with the authority to ratify the amount of benefits paid to claimants while they are not entitled to them. In particular, it will allow the Commission to ratify the amount of benefits paid to claimants of special benefits whose benefit periods were established in the period beginning on January 4, 2009, and ending on September 11, 2010, and who were erroneously provided with benefit periods that were longer than they should have been. Claimants who were provided with a benefit period longer than they were entitled to but whose longer benefit periods have not yet ended will continue to be paid benefits until the end of the longer benefit period, provided that they are otherwise eligible to be paid benefits.
Cost-benefit statement: The total amount of EI benefits to be ratified under this authority will reach up to $5.81 million as of October 8, 2011, when all claims affected will have ended. These Regulations will ensure that claimants are not required to pay back these benefits, reduce risk of claimant appeals, and ensure that there is no disruption or hardship for affected claimants.
Business and consumer impacts: As these amounts will be charged to the EI Operating Account, it will have a negligible, positive impact on future premium rates paid by employees and their employers (less than five one-hundredths of a cent).
Performance measurement and evaluation plan: The monitoring and assessment of the amendments made by Bill C-50 are currently underway. Early results from this assessment will be published in the 2010 Employment Insurance Monitoring and Assessment Report (MAR), which will be available in the spring of 2011. Further results will be published in the 2011 MAR and a full evaluation is planned for completion in 2013.
A regulation is needed to address an issue that has arisen as a result of the misapplication of the amendments to section 10 of the EI Act that were contained in Bill C-50.
Bill C-50 was introduced as a temporary measure to provide support to certain claimants of regular benefits — called long-tenured workers (LTWs) — during the economic downturn. It was recognized that many of these claimants had worked for extended periods of time in the same job or industry, and would take longer to find re-employment.
Claimants to whom these provisions applied had to establish their claims the period beginning on January 4, 2009, and ending on September 11, 2010, and also had to meet certain requirements with respect to the payment of premiums and receipt of benefits in the period preceding their claim. As of December 30, 2010, a total of 163 960 LTWs had received extended EI benefits, at a cost of $766 million.
Bill C-50 provided these claimants of EI regular benefits with up to 20 additional weeks of benefits to a maximum of 70 weeks. For the purposes of this time-limited measure, LTWs were individuals who had worked and paid EI premiums for a significant period of time and who had previously made limited use of EI regular benefits. To allow Bill C-50 eligible claimants enough time to receive the additional benefits, the benefit period — which is ordinarily 52 weeks — of these claimants also needed to be extended. Due to a misapplication in the implementation of Bill C-50, the longer benefit period was provided to all claimants who, except for the fact that they were not claiming regular benefits, met the criteria to qualify as a LTW, including claimants collecting special benefits (i.e. maternity, parental, sickness, and compassionate care benefits). In some cases, these claimants were paid benefits after the end of the benefit period that they should have received, and therefore they were not entitled to them.
As of February 5, 2011, an estimated 3 165 claimants have erroneously received a longer benefit than that to which they were entitled since January 3, 2010. Affected claimants may be facing extraordinary personal situations, which could include dealing with illness, in addition to maternity and/or parental challenges.
The objective of these Regulations is to provide the Commission with the authority to ratify the amounts paid to the affected special benefits claimants after the end of the benefit period that they should have received. By ratifying the amounts paid to these claimants, they will not be required to repay the benefits, and benefits will continue to be paid to claimants until the end of the longer benefit period that was erroneously provided to them.
To ensure there is no disruption in their EI benefits, the Commission is making a regulation providing it with the authority to ratify amounts paid to claimants while they were not entitled to them. More specifically, the Regulations will provide the Commission with the authority to ratify payments made to claimants whose benefit period was established in the period beginning on January 4, 2009, and ending on September 11, 2010, in respect of a claim for special benefits, where the amounts of EI benefits were paid as a result of the erroneous application of subsection 10(2) of the EI Act, as it read on October 25, 2009. The Regulations are being made pursuant to paragraph 54(k) of the EI Act.
Ratification of these amounts would be accomplished through resolutions approved by the Commission.
Regulatory and non-regulatory options considered
The Regulations are required to provide the authority to ratify the payments made to these claimants both now and in the future, although not until after the payment is made.
Other options, including a Remission Order, were considered. However, while these options met the objectives of equity and fairness among those affected, they were administratively inferior and more complex with a higher implementation risk than a regulatory approach that would allow for the ratification of amounts paid.
Not introducing these Regulations would therefore require notifying affected claimants of the stoppage of their EI benefits and would increase the administrative complexity associated with minimizing disruption to claimants. This would involve identifying the claimants who received a longer benefit period than that to which they were entitled, determining the amounts that were paid after the benefit period that they should have received ended, establishing overpayments, and collecting the overpayments. Collecting such amounts would result in significant new administrative requirements. Additionally, benefit payments would be stopped and claimants, most of whom are women on parental leave and who have also claimed sickness benefits, would be required to repay amounts already received, leaving many with no income as they would not be able to immediately arrange for childcare or return to work.
Benefits and costs
While the amounts of individual overpayments vary, the average overpayment is $930 with some individual overpayments being as high as $15,000. The total amounts of the overpayments will reach up to $5.81 million as of October 8, 2011.
No new administrative costs would result from these Regulations. The amounts ratified would be charged to the EI Operating Account and will have a negligible impact on EI premium rates (less than five one-hundredths of a cent).
The alternative could result in significant hardship and disruption for these claimants. A regulation is needed to ensure that claimants do not have to repay these benefits and to minimize potential disruption.
As affected claimants were not at fault, collection of the debt would be unreasonable. Further, affected claimants may be facing extraordinary personal situations, which could include dealing with illness, in addition to maternity and/or parental challenges. In light of these challenges, claimants would have had a significant reliance on benefits they received but to which they were not entitled.
These claimants are on leave without pay and are currently caring for their newborn children or dealing with illness or injury. To maintain their employment income, claimants would likely need to contact their employer and attempt to return to work earlier than previously planned. Prior to returning to work, claimants may also face the challenge of having to make new child care arrangements.
No formal consultations were conducted with respect to these Regulations. The Commission, which includes a representative for workers and a representative for employers, has approved the Regulations.
Implementation, enforcement and service standards
The current payment of benefits for affected claimants is operating through the normal system for the payment of EI benefits, which are paid out of the Consolidated Revenue Fund and charged to the EI Operating Account.
Existing implementation, enforcement and compliance mechanisms contained in the adjudication and controls procedures will ensure program integrity and enforcement of these amendments to the EI Regulations, and will ensure that they are properly implemented.
Regular auditing and integrity functions under the EI program will apply, and additional verification measures, such as post-claim audits or reconciliations, will be completed as necessary.
Performance measurement and evaluation
The Commission monitors various aspects of the EI program through the preparation and tabling of its annual Monitoring and Assessment Report (MAR). The MAR provides a broad review of the impacts and effectiveness of the benefits provided under the EI Act. The evidence provided through the MAR has led to modifications to the EI Act and the EI Regulations in the past and the expectation is that it will continue to do so.
The monitoring and assessment of the amendments made by Bill C-50 are currently underway. Early results from this assessment will be published in the 2010 MAR, which will be available in the spring of 2011. Further results will be published in the 2011 MAR and a full evaluation is planned for completion in 2013.
The Office of the Auditor General (OAG) conducts an annual audit of the financial statements of the EI Account. The OAG findings and any resulting management action plan are shared with the Departmental Audit Committee.
Legislative and Regulatory Policy Design
Employment Insurance Policy
Skills and Employment Branch
Human Resources and Skills Development Canada
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S.C. 2009, c. 33, s. 9
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