Employment Insurance special benefits—available soon to the self-employed!

If you’re self-employed, you may be eligible for special EI benefits (maternity benefits, parental benefits, sickness benefits, and compassionate care benefits) starting in January 2011. Currently, self-employed persons do not have access to any EI benefits under the EI program.

Generally, you’ll be required to opt into the EI program at least one year prior to claiming benefits. If you opt into the program during the 2010 calendar year, you will pay the same EI premium rate as salaried employees ($747 maximum for 2010). You’re not required to pay the employer’s portion of the premium rate, as you will not have access to EI regular benefits.

In order to qualify for the special benefits, you must meet all of the following conditions:

• be a Canadian citizen or a permanent resident of Canada,
• enter into an agreement with the Canada Employment Insurance Commission (the Commission) through Service Canada, and
• have earned a minimum of $6,000 in income from self-employment during the previous calendar year.

You’ll receive benefits at the same rate as employed persons: 55% of your average insured earnings, up to the yearly maximum insurable amount (which is $43,200 for 2010).

You can opt out of the EI program at the end of any tax year as long as you have never claimed any benefits. However, once you claim benefits, you will have to contribute on self-employed earnings for as long as you’re self-employed.

More infomation about EI special benefits for the self-employed is available in a February 2010 tax client release.