OTTAWA, ONTARIO--(Marketwire - Aug. 2, 2012) - The Government of Canada is launching a new, national Employment Insurance (EI) pilot project starting August 5, 2012. The Honourable Diane Finley, Minister of Human Resources and Skills Development, made the announcement today in Ottawa.

"Our government's top priorities are job creation, economic growth and long-term prosperity for Canadians," said Minister Finley. "This new EI pilot project, which has been applauded across the country by employees and employers alike, will allow claimants to keep more of what they earn, ensuring they always benefit by accepting available work."

In Economic Action Plan 2012, the Government has introduced a new, national EI pilot project, Working While on Claim. The pilot project increases the incentive for claimants to accept available jobs by allowing them to keep more of what they earn while on EI, as benefits are only reduced by 50 percent of total earnings from working while on claim.

"Our government believes it should always pay to work," said Minister Finley. "Canadians want to get back to work, and statistics show that those who stay active in, and remain connected to, the labour market find permanent employment faster. Our government is committed to supporting workers and ensuring that EI enables a strong and competitive workforce."

The Working While on Claim pilot is one of many recent improvements the Government of Canada has made to the EI program. This past spring, the Government announced several targeted, common-sense changes to encourage Canadians to stay active in the job market and to remove disincentives to work. These changes include better connecting Canadians to available opportunities in their local area, clarifying their responsibilities while collecting EI and establishing a new pan-Canadian approach for calculating EI benefits so that those living in regions with comparable labour market conditions receive similar benefits.

More information is available at www.actionplan.gc.ca.

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This news release is available online at: www.actionplan.gc.ca.

Backgrounder

Through Economic Action Plan 2012, the Government of Canada is providing $74 million over two years to introduce a new, national EI Working While on Claim pilot project.

The intent of the pilot project is to help individuals stay connected to the workforce by encouraging individuals who are receiving EI benefits to accept available work and earn some additional income without being penalized.

Under the previous pilot project that ran from December 7, 2008, through to August 4, 2012, claimants could only earn up to $75 or 40 percent of their weekly benefit amount, whichever was greater. Any earnings above that threshold were deducted from the benefit payment dollar-for-dollar.

Starting on August 5, 2012, until August 1, 2015, claimants will be able to keep more of what they earn as benefits are only reduced by 50 percent of total earnings from working while on claim.

Example:

William is a retail salesperson who has recently been laid off. He receives EI benefits of $330 per week. He has found part-time work in a store that pays him a total of $450 per week.

Under the previous Working While on Claim pilot project, William could earn wages equivalent to 40 percent of his weekly EI benefit payment with no reduction in his benefits. This allowed him to keep $132. The amount he earned above that threshold was deducted from his benefit payment dollar-for-dollar. In this situation, William's combined earnings and EI benefit would have been $462.

For every dollar in wages that he earns while claiming benefits, the new pilot project will allow William to keep 50 cents, up to a maximum of 90 percent of the weekly insurable earnings used to calculate his EI benefit amount. Therefore, his combined weekly income will now be $555. This means William will keep $93 more per week than what he would have under the previous pilot project.

Previous pilot project				New pilot project
Weekly insurable earnings used to calculate the EI benefit rate		$600		Weekly insurable earnings used to calculate the EI benefit rate		$600
Weekly EI benefit rate (55% of $600)		$330		Weekly EI benefit rate (55% of $600)		$330
Gross earnings during an EI week		$450		Gross earnings during an EI week		$450
Allowable earnings (40% of the weekly EI benefit rate)		$132		Allowable earnings (50% of gross earnings)		$225
Amount to be deducted from weekly EI benefits ($450 - $132)		$318		Amount to be deducted from weekly EI benefits ($450 - $225)		$225
Resulting EI payment ($330 - $318)		$12		Resulting EI payment ($330 - $225)		$105
Previous TOTAL INCOME		$462		New TOTAL INCOME		$555