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Debates about the Employment Insurance Model

Statistics just released showed that applications for unemployment insurance increased by almost 23% this January compared to last year.  To deal with flood of applications, the government is providing an additional $60 million to hire more claim processors.

But critics argue that the real problem is the model itself, which has such strict eligibility requirements that more than one-half of Canada’s unemployed remain ineligible.  Here is a summary of the various eligibility restrictions prepared by the government.   In essence, you must have worked a certain number of hours during the 52 week period since your last claim to be eligible, and how many hours needed depends on where you live.  Here is the chart that tells you how many hours you need to work and how long you can receive benefits for.  In Toronto, for example, you need to have worked 595 hours, and you are eligible for a maximum of 47 weeks’ of benefits.  You also have to wait  a 2 week period at the beginning of your claim before your payments begin.

Critics want the number of hours needed to qualify to be lowered, the waiting period to be eliminated, the length of payments to be extended, and the amount of payments to be increased (currently, the maximum payment is $477 per week, based on 55% of average earnings to a maximum annual salary of $42, 300).

Historically, the EI fund paid into by employers has been a cash boon for governments, since they take in huge amounts of cash and yet pay out only a small fraction of those funds because of all the people the government disqualifies from receiving benefits.  Conservative governments in particular have  often argued that ‘too generous’ a system will encourage people to become dependent on the state.  The same argument is used against welfare payments.

What do you think of all this?  Should the EI model be revamped to be more generous and to make it easier to qualify?  Or do you think that the current model, which excludes more than half of unemployed workers, strikes a fair public policy balance?

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One Response to Debates about the Employment Insurance Model

  1. Pingback: Political Honesty, Rovian Politics, and Evangelicals « Vancouver Moose

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