Changes to EI for self-employed people urged

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This article was published 22/01/2024 (670 days ago), so information in it may no longer be current.

A Manitoba entrepreneur is calling for change to Canada’s employment insurance program for self-employed people, saying it’s confusing and has left her in a tough situation during her maternity leave.

Veronica Ruiz Badia receives $188 weekly for parental leave through employment insurance, half of what she expected to earn as she stays home with her daughter.

“If I’d have known I wasn’t going to have this money, I would have made other decisions,” she stated.

She could have asked her husband to take paternal leave from his job while she continued to run her mental health clinic, Stone Flake. If she had stayed on a bit longer, she would be receiving more money through EI, she added.

Ruiz Badia, 36, thought Ottawa would use her 52 weeks of income closest to her EI application date; it’s what’s used when calculating regular EI maternity benefits.

Instead, the government processed how much money she would make on maternity leave by her earnings the year prior to her claiming EI (which was in 2022).

A Government of Canada web page about self-employed EI special benefits states that EI premiums are calculated based on a user’s income tax return.

Ruiz Badia claims the web page’s information wasn’t available when she first applied.

She had her baby in August of 2023 and began receiving EI payments. The year prior, she lost six months of wages while dissolving a former clinic and business partnership, she maintains.

She learned she would receive half of what she expected from the government after she had already stopped working, she said.

In 2024, the maximum weekly limit for maternity leave as a self-employed person using EI is $668. Users receive up to 55 per cent of their earnings, to the maximum amount.

The maximum weekly payment for extended parental benefits — which Ruiz Badia is on now — is $401 a week.

Ruiz Badia sent a letter to the government in September asking officials to reconsider her benefit rate and use her last 52 weeks of income, which includes earnings from 2023.

Service Canada responded in November. Their notice of decision reads: “We are maintaining our decision on this issue.”

The feds used the Employment Insurance Act in their reasoning and noted Ruiz Badia could appeal to the Social Security Tribunal of Canada.

“The client’s benefit rate was properly calculated,” a spokesperson from Employment and Social Development Canada wrote in an email to the Free Press.

Ruiz Badia said she hasn’t appealed the decision.

Now, however, she doesn’t contribute to the family food budget or mortgage, she said.

She would like to see changes to Canada’s self-employed maternity and parental benefits system, including more clarity online as to how benefits are calculated, and a shift to calculating benefits by using highest recent earnings.

She wishes she had known sooner how much money she would be receiving.

“There aren’t that many women who have their own businesses to begin with, then you add all of these barriers and complain, ‘Oh, people are not having babies.’ Well, I wonder why,” she said.

Service Canada’s objective is to render a decision within 28 days from the date on which an EI application is received, Samuelle Carbonneau, a spokesperson for Employment and Social Development Canada, wrote in a statement.

“The department makes every effort to meet established targets,” Carbonneau said, noting sometimes the 28-day target isn’t met.

Ottawa could improve its public-facing communications about EI, said Joelle Foster, president of North Forge Technology Exchange.

“There’s a lot of government speak and many, many of our entrepreneurs are women who are newcomers. There’s not only a language barrier, there is also confusion as to our government processes,” she said.

Self-employed EI helps with “forced savings,” but also, entrepreneurs can create a specific savings account and feed money in monthly when preparing for a child, Foster said, adding some business owners begin side hustles while taking maternity leave to avoid fully relying on their spouse.

Part of the solution is providing flexibility to businesspeople with children, Foster said.

“As employers, as organizations, as clients, we need to be more cognizant of women entrepreneurs,” she stated.

gabrielle.piche@winnipegfreepress.com