ARCHIVED — Vol. 146, No. 26 — December 19, 2012

Registration

SOR/2012-260 November 30, 2012

EMPLOYMENT INSURANCE ACT

Regulations Amending the Employment Insurance Regulations

P.C. 2012-1610 November 29, 2012

RESOLUTION

The Canada Employment Insurance Commission, pursuant to sections 54 (see footnote a) and 152.33 (see footnote b) of the Employment Insurance Act (see footnote c), hereby makes the annexed Regulations Amending the Employment Insurance Regulations.

October 15, 2012

IAN SHUGART
Chairperson
Canada Employment Insurance Commission

MARY-LOU DONNELLY
Commissioner (Workers)
Canada Employment Insurance Commission

JUDITH ANDREW
Commissioner (Employers)
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 sections 54 (see footnote d) and 152.33 (see footnote e) of the Employment Insurance Act (see footnote f), approves the annexed Regulations Amending the Employment Insurance Regulations, made by the Canada Employment Insurance Commission.

REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS

AMENDMENTS

1. Subsection 55(4) of the Employment Insurance Regulations (see footnote 1) is replaced by the following:

(4) A claimant who is not a self-employed person is not disentitled from receiving benefits in respect of pregnancy, the care of a child or children referred to in subsection 23(1) of the Act, the care or support of a family member referred to in subsection 23.1(2) of the Act or while attending a course or program of instruction or training referred to in paragraph 25(1)(a) of the Act, for the sole reason that the claimant is outside Canada, unless their Social Insurance Number Card has expired.

2. Subsection 55.01(3) of the Regulations is replaced by the following:

(3) A self-employed person is not disentitled from receiving benefits in respect of pregnancy, the care of a child or children referred to in subsection 152.05(1) of the Act or the care or support of a family member referred to in subsection 152.06(1) of the Act for the sole reason that the self-employed person is outside Canada, unless their Social Insurance Number Card has expired.

3. (1) Paragraph 56(1)( a ) of the Regulations is replaced by the following:

  • (a) the total of the penalties and amounts, including the interest accrued on those penalties and amounts, owing by the debtor to Her Majesty under any program administered by the Department of Human Resources and Skills Development does not exceed $100, a benefit period is not currently running in respect of the debtor and the debtor is not currently making regular payments on a repayment plan;

(2) Paragraph 56(1)( f ) of the Regulations is amended by striking out “or” at the end of subparagraph (i), by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

  • (iii) the administrative costs of collecting the penalty or amount, or the interest accrued on it, would likely equal or exceed the penalty, amount or interest to be collected.

TRANSITIONAL PROVISIONS

4. (1) Subsection 55(4) of the Employment Insurance Reg u lations , as enacted by section 1, does not apply in respect of a claimant referred to in that subsection whose benefit period was established before December 9, 2012.

(2) Subsection 55(4) of the Employment Insurance Regul a tions , as it read immediately before December 9, 2012, continues to apply in respect of a claimant referred to in that subsection whose benefit period was established before that day.

5. (1) Subsection 55.01(3) of the Employment Insurance Regulations , as enacted by section 2, does not apply in respect of a self-employed person referred to in that subsection whose benefit period was established before December 9, 2012.

(2) Subsection 55.01(3) of the Employment Insurance Reg u lations , as it read immediately before December 9, 2012, continues to apply in respect of a self-employed person referred to in that subsection whose benefit period was established before that day.

COMING INTO FORCE

6. These Regulations come into force on December 9, 2012.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Two issues have been identified as part of the Government’s efforts to improve the fairness of service to Canadians and the efficiency of the Employment Insurance (EI) program:

(1) Current EI regulations allow claimants who are not authorized to remain in Canada to apply for and receive maternity, parental and compassionate care benefits while outside Canada. Providing these benefits to claimants outside Canada and who are not authorized to remain in Canada is inconsistent with the core principle of EI which is to provide temporary income support to facilitate transitions back into the Canadian labour market; and

(2) The cost of collecting overpayments resulting from periodic adjustments of EI claims is often greater than the amount to be collected.

Description: Amendments to sections 55 and 55.01 of the Employment Insurance Regulations (EI Regulations) specify that individuals who are not authorized to remain in Canada with an expired Social Insurance Number (SIN) card will no longer be able to collect maternity, parental or compassionate care benefits while outside Canada, if their benefit period is established on or after December 9, 2012.

Amendments to section 56 of the EI Regulations will improve efficiencies in the collection of overpayments through: (a) an increase to the write-off threshold amount, from $20 to $100; and (b) the provision of the authority to the Canada Employment Insurance Commission (the Commission) to write off overpayments if the administrative costs of collecting the amount would be equal to or exceed the amount to be collected.

Cost-benefit statement: The amendments to restrict access to EI special benefits to those authorized to stay in Canada is expected to yield program savings of $16 to $18 million annually, and ongoing administrative savings of $540,000. A one-time investment of approximately $125,000 is required to implement this proposal.

While the savings associated with the overpayment amendments are expected to be minimal, they are complementary to the associated legislative changes passed in the Jobs, Growth and Long-term Prosperity Act. The amendments will improve efficiency in the treatment of overpayment collection and will streamline administration.

“One-for-One” Rule and small business lens: Neither the “One-for-One” Rule nor the small business lens applies to this regulatory amendment.

Issue

Restricting EI special benefits to those authorized to remain in Canada

Under the EI Regulations, individuals could leave Canada upon expiry of their authorization to remain in Canada, but still receive EI maternity, parental or compassionate care benefits. This is inconsistent with core principles of the EI program to provide temporary income support to individuals to facilitate their transition back into the Canadian labour market.

Further, EI claims from claimants outside Canada also result in program inefficiency as they are often not submitted electronically and are often incomplete resulting in significantly higher processing costs than for other EI claims. Also, it is difficult to verify eligibility of clients who are outside Canada and, frequently, in locations where telephone and Internet connections are limited.

Overpayment amendments

Adjustments to EI claims are often made due to new information from the Canada Revenue Agency, payment of amounts from a bankrupt employer or amounts received due to wrongful dismissal. These EI adjustments typically occur years after the claim has ended and, in many cases, the overpayments established are small and the administrative cost of collecting them exceeds the amounts to be collected, resulting in administrative inefficiency.

Objectives

The objectives of these amendments are as follows:

  • To limit access to maternity, parental and compassionate care benefits to qualifying individuals who are authorized to remain in Canada; and
  • To simplify claims processing and increase the administrative flexibility of the EI program by foregoing the collection of overpayments when the administrative costs are greater than the potential amounts to be collected.

These amendments will enhance the fairness and efficiency of the EI program by streamlining administration and reducing costly manually driven administrative processes.

Description

Restricting EI special benefits to those authorized to remain in Canada

Under this amendment, EI maternity, parental and compassionate care benefits will be no longer be paid to individuals outside Canada whose Social Insurance Number (SIN) card has expired. Individuals authorized to remain in Canada, who meet eligibility and qualifying conditions, will continue to be paid maternity, parental or compassionate care benefits while outside the country. This amendment will affect claimants whose benefit period is established on or after December 9, 2012.

Overpayment amendments

These amendments are complementary to the associated legislative changes passed in the Jobs, Growth and Long-term Prosperity Act, and allow the Commission to write off debts, where administrative costs exceed the amounts to be collected. The amendments are comprised of two changes:

  • An increase of the write-off threshold amount from $20 to $100; and
  • Clarification that the Commission may write off an overpayment (including interest and penalty) if they consider that, due to circumstances specific to the case, administrative costs of collecting the amount would be equal to or exceed the amount to be collected.

Regulatory and non-regulatory options considered

There are no alternative regulatory or non-regulatory options. Since the provisions governing access to maternity, parental and compassionate care benefits by individuals outside Canada exist in the EI Regulations, an amendment to the EI Regulations is required to limit these benefits to individuals who are authorized to remain in Canada. Similarly, since the provisions governing the write-off threshold amount exist in the EI Regulations, an amendment to the EI Regulations is required to amend these specific provisions.

Benefits and costs

Restricting EI special benefits to those authorized to remain in Canada

It is expected that this amendment will yield program savings of $16 to $18 million annually in EI benefits by 2014, as well as annual administrative savings of $540,000, based on an expected 13 000 fewer applications and eliminating the payment of benefits to approximately 1 900 claimants outside Canada per year. A one-time investment of approximately $125,000 is required to implement this proposal. This investment is related to systems changes as well as changes to operational policies and procedures.

Overpayment amendments

While the savings associated with the overpayment regulatory amendments are expected to be minimal, these changes will improve efficiency in the treatment of overpayment collection and will streamline administration. Adjustment of the write-off provisions will improve program efficiency by ensuring that collection of overpayments does not result in a net cost to the EI program, and will improve client service by reducing the burden on claimants to repay small amounts after their claim has ended.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this amendment, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this amendment, as there are no costs to small business.

Consultation

The Minister of Human Resources and Skills Development and her colleagues consult with Canadians and stakeholders on an ongoing basis across the country about labour market issues including the EI program, and this issue has been raised in the context of those consultations.

Rationale

Restricting EI special benefits to those authorized to remain in Canada

A core principle of the EI program is to provide temporary income support to individuals to facilitate transitions back into the Canadian labour market for claimants who have worked in insurable employment. In this context, paying these benefits to workers outside Canada and who are not legally authorized to remain in Canada is inconsistent with the core principles of the program.

Overpayment amendments

The overpayment amendments are complementary to the associated legislative changes passed in the Jobs, Growth and Long-term Prosperity Act, which provided flexibility not to establish overpayments if more than 36 months have elapsed since the claimant’s lay-off or separation and if the cost of establishing the overpayment would equal or exceed the value of the overpayment. Consistent with this approach, these amendments allow the Commission to write off small overpayments and ensure that the administration of such overpayments is not more costly than the amounts to be collected.

Implementation, enforcement and service standards

Existing implementation and enforcement mechanisms contained in Human Resources and Skills Development Canada’s adjudication and controls procedures will ensure that these regulatory amendments are implemented effectively and efficiently.

Performance measurement and evaluation

The Commission monitors various aspects of the EI program through the preparation and tabling in Parliament of its annual Monitoring and Assessment Report (the Report). Assessment and reporting on the results of these amendments will be integrated into the process of preparing the Report.

Contact

Michael Duffy
Director
Employment Insurance Policy Directorate
Skills and Employment Branch
Human Resources and Skills Development Canada
140 Promenade du Portage
Gatineau, Quebec
K1A 0J9
Telephone: 819-997-5034
Fax: 819-934-6631