Delean: How are employment insurance benefits calculated?

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Delean: How are employment insurance benefits calculated?

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Canada's EI program has undergone several adjustments during the pandemic. Author of the article: Paul Delean  •  Special to the Montreal Gazette Phot

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Canada’s EI program has undergone several adjustments during the pandemic.

Author of the article:

Paul Delean  •  Special to the Montreal Gazette

The employment insurance section of the Government of Canada website is shown on a laptop.
Photo by Jesse Johnston /The Canadian Press files

Variations in employment insurance benefits and indexation of retirement pensions were among the subjects raised in recent reader letters. Here’s what they wanted to know.

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Q: How exactly are employment insurance benefits calculated? I was on EI last year, getting $444 a week, after losing my job in the hospitality industry. I went back to the same job last summer and worked full-time until December, when we were shut down again. I applied for EI again, but this time around I’m getting less than $300 a week. What gives?

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A: The EI program has undergone several adjustments during the pandemic. When the Canada Emergency Response Benefit (CERB) was introduced in 2020 by the federal government, unemployed workers initially collected at least $500 a week (pre-tax) in benefits, regardless of what they would have received under the usual formula. The minimum was reduced to $300 a week for new EI claims last September, but that ended in November.

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“For most people, after Nov. 20, 2021, the basic rate for calculating employment insurance benefits is 55 per cent of their average insurable weekly earnings, up to a maximum amount,” Service Canada said. That maximum, as of Jan. 1, is $638 a week, for people who had insurable yearly earnings of $60,300 or more. If you feel the amount you’re receiving is too low, you can always request a reconsideration from Service Canada.

Q: You wrote that Quebec Pension Plan payments were indexed by 2.7 per cent in January. Isn’t that a bit low, with inflation running near five per cent according to the latest reports?

A: The annual QPP adjustment reflects the average variation in Canada’s Consumer Price Index (CPI) over the 12-month period ending in October. So at a time when inflation is spiking, it figured to lag the latest readings. The 2022 increase, nonetheless, is the highest for the QPP since 2012, when cheques were hiked 2.8 per cent. That number could well be exceeded next year if the cost of CPI’s basket of goods and services continues to rise.

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Old Age Security (OAS) pensions, which reflect CPI changes more quickly because they’re adjusted quarterly, rose a little over three per cent over the course of 2021. And the first adjustment of 2022, for the three-month period ending in March, is 1.1 per cent.

Q: In addition to my Montreal Gazette subscription, I purchased subscriptions for a number of friends and family members to my local community newspaper, which publishes bilingual biweekly editions in both print and digital formats. Would the cost of all these subscriptions be eligible for the federal digital news subscription tax credit?

A: If a newspaper has both a print and digital edition, only the portion of the subscription cost attributable to the digital side is eligible for the credit. It also has to be certified as a qualifying Canadian journalism organization. Canada Revenue Agency says only the individuals who entered into the agreements for the subscriptions can claim the expenses, so if you’re paying, that would be you. There is an annual limit of $500, however, on the amount of expenses eligible for the credit. It’s 15 per cent of the total, so the maximum credit is $75.

The Montreal Gazette invites reader questions on tax, investment and personal finance matters. If you have a query you’d like addressed, please send it by email to Paul Delean at gazpersonalfinance@hotmail.com.

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