Changes To EI Benefits Quietly Disappear September 11, 2010

Changes introduced in Canada's Economic Plan under An Act to amend the Employment Insurance Act and to increase benefits which started on October 25, 2009, officially ended on September 11, 2010. The federal government will no longer be extending the additional five weeks of EI benefits and the extra 20 weeks of employment insurance available toemployees who had long service, this despite continued high unemployment in certain areas of the country. Now is a good time for tax and financial advisors to be of service.

The January 27, 2009 Federal budget, extended regular EI benefit entitlements by the five extra weeks. In addition, that budget increased the maximum benefit entitlement period to 50 weeks from 45 weeks. These extended benefits were available for long-tenured workers who had accessed EI benefits on a limited basis in the past, and were designed to help them transition back into employment.

In difficult times, employees and executives are often given opportunities to "package outî of their workplaces. Advisors and their clients should familiarize themselves with changes to the availability of income benefits from Employment Insurance (and when these changes are removed) and the possibility of a related clawback of those benefits at tax time. RRSP contributions as part of a severance reinvestment plan can help avoid the clawback.