EMPLOYMENT INSURANCE FINANCIALLY DISCRIMINATES AGAINST THOSE WITHOUT CHILDREN

EMPLOYMENT INSURANCE FINANCIALLY DISCRIMINATES AGAINST THOSE WITHOUT CHILDREN (‘EVER’ SINGLES)

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

There has been much discussion lately about Employment Insurance (EI) in Canada particularly in those provinces who have been hit hard by the crash in oil prices.

There is also much that is unequal in how EI is paid out and the ruling Liberal party has stated that they will be looking at reforming the EI system.  One example is most Albertans need 700 hours of work to qualify for EI in sharp contrast to the 420 hours of work required for most Atlantic Canadians.

With inequities in how EI is paid out, one also needs to look at how much EI is paid out for maternity/paternity leaves.  It is very difficult to find statistics on how much EI is paid out for maternal/paternal leave versus that paid for the rest of the population (those who have lost their jobs).

Current Rules

EI maternity benefits are offered to mothers who cannot work because they are pregnant or have recently given birth. A maximum of 15 weeks of EI maternity benefits is available. The 15 weeks can start as early as eight weeks before the expected date of birth, and can end as late as 17 weeks after the actual date of birth.

EI parental benefits are offered to parents who are caring for a newborn or newly adopted child. A maximum of 35 weeks of parental benefits is available to parents. The two parents can share these 35 weeks of benefits.

Many companies top up their EI benefits for maternal/paternal benefits to one year.

Who pays for EI?

Every employed person pays EI premiums up to maximum of $930.60 per year (in 2015) plus employer contributions.

How are EI dollars used in maternal/paternal leaves?

For maternal/paternal EI leave, all things being equal, it is understood that each working parent will pay EI premiums.

One could say that with the birth of two children, the EI premiums paid by each parent have been used up.  With the birth of each additional child after two children, the parents have not only used up their EI premiums and are now drawing from the EI system that has been paid for by their employers and other Canadians.  In addition, if they are unemployed and have used EI premiums for two children, they again are drawing monies from the EI system that have been paid for by their employers and other Canadians.

Now consider those persons who have paid EI premiums, have never had any children and have been gainfully employed throughout their entire lives without drawing any EI benefits.  These persons are supporting/subsidizing those parents who have taken maternal/paternal leaves for their children.

Singles are forced to help pay for maternity/paternity benefits for not only one generation, but possibly two generations (if single works from age 25 to 65 years, span of 40 years could mean paying for more than one generation).  In addition to being forced to help pay for maternity/paternity benefits, there is the expectation to contribute to wedding/baby shower gifts for fellow generations (again could possibly be for more than one generation), but singles never get anything in return.  (This paragraph was added to post on April 20, 2016).

ANALYSIS

The Liberal party, with the present crash in oil prices, has actually used some outside the box thinking and given extra EI benefits to those older employees who have never used EI benefits in the past.  Long-tenured workers in the 12 regions identified in the budget as suffering the sharpest jumps in joblessness will be eligible for an extra 20 weeks of benefits to a maximum of 70 weeks.

Another outside the box thinking idea should be rebating at least some EI premiums back to senior employees without children who have never used EI benefits throughout their working lives.  They deserve as much for having supported families for many, many years.

LOST DOLLAR VALUE

For a person (‘ever’ single and married/coupled persons without children) who has been gainfully employed for forty years and paid an average of $900.00 per year (which is now at a maximum of $930.60 per year), the Lost Dollar Value would be $36,000 per person.(Updated April 10, 2016 as review of data over a couple of decades reveals EI amounts have been as low of approximately $800.00 to high of over $1000.00.)

ADDENDUM  (April 7, 2016)

For some who have applied for EI benefits this can be a demoralizing process, particularly if the person processing the application on the other side of the table is not very helpful. Families using EI for maternal/paternal  benefits do not have to face these obstacles.

‘Ever’ singles (never married, no kids) are never recognized or thanked for the contributions they have made to support families, one big contribution being EI benefits.  Adding insult to injury, all political parties over the years have used extra EI monies collected from employees and employers to pad budgets not related to EI.

“Ever’ singles in their senior years face huge obstacles in attaining the same financial standard of living as families and married/coupled persons because they are always forced to pay more and get less.  They also are not given the same level of benefits such as pension splitting which can provide thousands of dollars in tax savings for married/coupled seniors.

Financial fairness for ‘ever’ singles requires outside the box thinking.  One idea would be to give ‘ever’ senior singles a $2,000 or $3,000 annual totally refundable tax credit that would provide an extra $200-$300 per month to compensate for the EI monies they have given to families over the years.  (It would be very easy to identify ‘ever’ singles as marital status  is a required piece of information on tax returns.)

This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.