Question Period Note: Unemployed Canadians not receiving debt notifications and left with no income because of cut off EI benefits

What is Service Canada doing to help unemployed Canadians receiving severance packages get the income support they need?

Under the Government of Canada’s effort to support Canadians and the economy from the impacts of the global COVID-19 pandemic, beginning in March 2020, Employment and Social Development Canada (ESDC) put a pause on collection activities for all ESDC debts. This included no issuance of the notice of debt (NOD) for new debts.
• This decision was made to focus on supporting Canadians and ensuring they had the financial support necessary during these challenging and unprecedented times. The establishment of new debts would have been contradictory to this objective.
• While largely positive, it may have created delays for employers, bankruptcy trustees or other third parties to finalize certain payments to EI recipients.
• This is because if these payments were for the same period for which the individual was in receipt of EI, it could put them in an overpayment situation. The EI Act requires the employer or trustee or any third party to work with Service Canada to reconcile the amounts and only pay the net amount to the individual (total payable minus calculated overpayment).
• As of September 27, 2020, we have transitioned people back to the Employment Insurance (EI) program. As part of this transition, the issuance of these NODs, will recommence on November 1, 2020.
• As the pandemic persists, we recognize it may not be realistic for individuals in receipt of EI benefits to find employment. Therefore, while we will begin issuing the NODs, this is only a soft launch.
• We would like to reassure Canadians that this is not a restart of the full collection activities and these debts will continue to be removed from collection activities for the coming months.
• As part of our regular business processes individuals will have an opportunity to discuss repayment plans with the CRA prior to any collection activities getting underway.

• The Employment Insurance (EI) program provides temporary income support to workers who, through no fault of their own, become unemployed and suffer a financial loss.
• Pursuant to the EI Act, all money, either paid or payable to a claimant that arises from their employment is considered earnings to be deducted from benefits and is allocated according to the EI legislation. These earnings, paid by reason for separation from employment, must be allocated from the date of separation from employment at a rate equal to the claimant’s normal weekly earnings from that employment, until exhausted.
• For situations in which monies become payable to an EI claimant subsequent to the receipt of EI benefits, the EI Act requires that, prior to issuing those payments, an employer or trustee (or any third party) is required to contact the Commission to determine whether the payment of these monies will cause an overpayment of EI benefits. If the monies cause an overpayment, the employer or trustee (or any third party) is required to deduct the overpayment from the earnings payable to the claimant and remit it to the Receiver General.
• Once the details of the settlement payments are reviewed by the Commission, each claim is assessed based on its individual circumstances. It also may be necessary to adjust subsequent claims. Overpayments may be established which would mean informing the trustee so they can subtract the overpayment before issuing the payment. This becomes very complex, particularly if the separation from employment occurred many years ago.
• Under the Government of Canada’s effort to support Canadians and the economy from the impacts of the global COVID-19 pandemic, beginning in March 2020, Employment and Social Development Canada (ESDC) put a pause on collection activities for all of ESDC debts up to September 30, 2020. This included no issuance of the notice of debts (NOD) for new debts.
• This decision was made to focus on supporting Canadians and ensuring they have the financial support necessary during these challenging and unprecedented times. The establishment of new overpayments would have been contradictory to this objective.
• As a result of the government’s decision to not establish new overpayments, this reconciliation of the EI payments and these other monies paid by an employer, trustee or other third party, was not undertaken. This meant that there were delays in the finalization of these payments from the employer, trustee or other third party.
• As of September 27, 2020, ESDC is transitioning people back to the Employment Insurance (EI) program. With this transition, these reconciliations will be completed once again, which means the issuance of these NODs will recommence on November 1, 2020.
• Beginning December 1 – The Department, through CRA will begin a “soft collection” contacting those individuals who owe debts that are not related to the EI-ERB to discuss repayment plans.
• Beginning February 1 – The Department, through CRA will begin collections for those owing debts related to the EI-ERB

• Under the Government of Canada’s effort to support Canadians and the economy from the impacts of the global COVID-19 pandemic, beginning in March 2020, Employment and Social Development Canada (ESDC) put a pause on collection activities for all of ESDC debts up to September 30, 2020. This included no issuance of the notice of debts (NOD) for new debts.
• This decision was made to focus on supporting Canadians and ensuring they have the financial support necessary during these challenging and unprecedented times. The establishment of new debts would have been contradictory to this objective.
• This decision created situations where the program did not proceed with the reconciliation of EI payments and other monies paid by an employer, trustee or other third party. This may occur in situations where those other monies become payable to an EI claimant subsequent to them receiving their EI benefits. This meant that there were delays in the finalization of these payments from the employer, trustee or other third party to individuals.
• As of September 27, 2020, ESDC is transitioning people back to the Employment Insurance (EI) program. With this transition, these reconciliations will be completed once again, which means the issuance of these NODs will recommence on November 1, 2020.