Employment Insurance Should Not Be Subject to Clawback

Of the 216 votes in our June 2014, 65% of KBR voters strongly voiced their opinion in our against employment insurance being subject to a clawback on the tax return.

Max writes: “Absolutely not, because employees and employers are required to pay premiums for the insurance. The only way clawback would be a viable option is if premiums were not required, like OAS.”

B. opines: “Clawback programs should be limited only to those benefits paid out of general tax revenue. EI, as its name implies, is an “insurance program” paid for by the employee and employer with no contributions being received from general tax revenue.  The Government has no more right to clawback EI proceeds than they would if you or I received benefits through a private insurance fund.  In addition, the EI premiums should be segregated into a separate fund that can only be used for unemployed benefits – the surplus should not be allowed to be bled off and used for re-training programs or to reduce deficits as has been done in the past.  If the fund’s surplus becomes unduly high, then a temporary reduction in premiums for both contributing parties could be triggered until the surplus was drawn down to a predetermined balance based on the national unemployment average…”

Russ expresses another idea: “EI should be reserved for those who need it…If you pay into it then you should be able to use it at some point. I also think that if you have paid in and never had a claim, then you should get a refund of some kind or an enhancement in your retirement benefits.”

There were some comments that offered consideration to possible EI clawback in certain situations. Roger questions: “You have individuals who are seasonal and make a great amount of money because of this fact. Is it fair that they also receive EI past a certain amount?  And do not forget that the amount of EI paid out is calculated on amount earned; therefore they are getting the best of both worlds as well as a long holiday at our expense.”

Marc adds: “Every individual is paying with the employer. Clawback should be only on the employer portion because it is a business deduction. For employees it is a tax deduction only.”

JW comments: “EI is currently clawed back now if your income is over a certain threshold – or at least it was in 2012 when my spouse got clawed back about 1/2 of the EI she was paid, because her income was too high during the rest of the year…I do agree it should be clawed back over a threshold.”

June provides the final comment, and it seems to sum up the majority opinion succinctly: “…The bottom line is NO, there should not be a clawback.”

Thank you to all who participated in our June poll.  Our July poll tackles a newly enforced legislation: “Will the Canadian anti-spam legislation (CASL) affect your business and that of your clients?” Tell us what you think.