$800M overpaid to EI claimants: Ottawa

OTTAWA -- As the Conservative government proposes major reforms to the employment insurance system, new figures show Canadians made hundreds of thousands of fraudulent EI claims over the past four years and received nearly $800 million in total overpayments.

While the federal government apparently recovered huge chunks of that cash, it also wrote off almost $125 million in overpayments it decided it had no chance of collecting.

The numbers were released as the Tories prepare sweeping changes to the employment insurance system that will target repeat EI claimants and dictate what jobs Canadians receiving benefits should be expected to take.

Figures tabled this week in the House of Commons reveal the large number of EI cheats in the country. The numbers also lay bare some of the challenges the Harper government faces in reforming the current EI system.

Between the 2008-09 and 2011-12 fiscal years, $787 million in employment insurance overpayments was paid out for nearly 956,000 cases.

An EI overpayment is a sum incorrectly issued on top of payments for specific weeks, and can result from errors made by the worker, the employer or the government. Claimants are required to pay back overpayments. Fraudulent claims can lead to financial penalties or prosecution.

Of those 956,000 overpayments over the past four years, nearly one-third (312,000 cases) are considered "misrepresented" cases -- where EI beneficiaries knowingly withheld "information or misrepresented facts for the purposes of a false claim," the federal government said.

The remaining cases are considered non-misrepresented -- the result of people making honest mistakes while filling out forms or reports.

Between 2008-09 and 2011-12, the government collected back from Canadians around $1.1 billion in overpayments, including payouts made in earlier years.

However, Ottawa also wrote off almost $125 million in overpayments during that time from an unidentified number of claims. The government decided it wouldn't be able to collect that money.

Over the four years, there were, on average, approximately 4.9 million annual employment insurance claims across the country, including initial, renewal and revised claims.

A disproportionate number of the overpayments and fraudulent cases come from the Atlantic provinces and Quebec.

Atlantic Canada, which has a large number of seasonal workers and higher unemployment rates, is home to around 2.3 million people, or less than seven per cent of the total Canadian population of approximately 34.8 million.

However, the four Atlantic provinces account for around 14 per cent of the fraudulent EI claims over the four years.

Quebec, which is home to 23 per cent of the Canadian population, accounted for one-third of the reported false EI claims. Ontario, which has 39 per cent of the Canadian population, was home to about 32 per cent of the false claims.

The western provinces -- with their booming natural resource economies and lower unemployment rates -- have 31 per cent of the country's population but only accounted for around 20 per cent of the false EI claims.

Federal NDP agriculture critic Malcolm Allen said the government should be hiring more workers and opening additional Service Canada offices -- rather than laying off public servants and closing locations -- in an effort to catch EI cheats and ensure claims are properly processed.

"They (EI cheats) are taking money out of the pockets of those who need it, who are unemployed," Allen said Friday. "We need the resources to catch these people."

The federal budget identified some of the looming changes to "strengthen and clarify" the rules on what is required of EI claimants. The reforms will take into account local labour market conditions "and an individual's past history with the EI program," says the budget.

The changes are expected to target repeat claimants, possibly by forcing them to take lower-paying jobs.

Opposition parties, however, argue the EI overhaul is an "attack on Canadian workers" and will unfairly hurt certain regions of the country that rely more on seasonal and contract employees.

"The government keeps pretending that employment insurance belongs to it, but we all know it does not. EI belongs to workers," Allen said.

"Conservatives seem to think that being unemployed is an all-inclusive vacation."

The Harper government is poised to define what is considered "suitable employment" that Canadians should accept if they want to receive EI benefits. The government is promising workers won't be required to take jobs outside their skill sets or areas they call home.

-- Postmedia News

Republished from the Winnipeg Free Press print edition May 19, 2012 A24