# EI, Self-Employment Income & Graphic Design Question



## corkybeans (Oct 10, 2011)

Hi... a bit of background first before my question which I hope someone has the answer.

I'm a 25 year veteran prepress technician, moved from the West Coast to the East Coast six years ago where I was fortunate to work from home for a small shop in another province. I transitioned to graphic design and still did some prepress work on a much smaller scale. It was an ideal job except for the idiot I worked for who dished out threats and abuse on a regular basis. Finally, just this past August, I had enough and quit, filed for EI benefits which took forever as they had to investigate. Fortunately, I had submitted printed email examples of his abuse and a letter from an ex-employee.

So... now my question is this... With the recent changes to EI and self-employed people, is someone like me allowed to freelance and claim the amount earned without losing their claim? It does say this about indicating on your report that you "worked or received earnings, _including self-employment earnings_"

I lost my claim a few years ago when the idiot I worked for promised to put me back on the payroll after finishing full-time school to obtain my diploma which I'm told you MUST have to get a job in these parts... never mind all the years experience I had in a trade. I had first started working for him because I needed a summer job to open a new claim (required in order to finish getting my credits) Anyway... I wasn't getting pay stubs and realized after the fact that I wasn't entitled to EI because I was considered 'self-employed'. I dealt with the problem right away and had to pay back $500 as well. I would hate to lose my claim for one small freelance job and at the same time would like to explore the idea of becoming self-employed doing freelance and selling collectibles online. I'm a vintage junkie but my hubs says I'm a hoarder. Addiction is tough. 

It seems somewhat obvious that I can claim any self-employed earning but it's a matter of 'once burnt, twice shy' and I need to be 100% certain. I will call them anonymously if I have to but I don't want them flagging me.


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## screature (May 14, 2007)

I really don't know enough about your situation to be able to offer any good advice but based on what you are saying I don't think doing some self-employment work during a period of a claim would stop you from continuing to receive benefits, the monies you receive would simply be deducted form your benefit payment.

For more information try here:

Employment Insurance (EI) and self-employed, farmers and independent workers

and here:

Contact Information for Employment Insurance (EI)


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## corkybeans (Oct 10, 2011)

Thanks.... I have read all of this and it seems pretty straight forward. It's just that at one time, you could not claim earnings from self-employment so I'm a bit scarred. I will call them and get clarification.


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## Lichen Software (Jul 23, 2004)

If you have a local government office, I would be tempted to go and park myself and then ask questions.

A note on EI and self employment: From what I see it appears to be optional ... until you take it once. Then you are forever paying into EI whether you like it or not.

You will find there is a big divide between employment and self employment. Government makes payments to employees. Self employed are generally on their own. The government will love to declare you self employed. Then you are never in their stats or in their books.


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## corkybeans (Oct 10, 2011)

In case anyone ends up in my situation, here's the answer. There is a clause "In some circumstances..." where you can earn money from self-employment BUT... you can't just do it and claim that money. You have to apply, then your claim is suspended for up to three weeks while they make a decision if it's allowable, then you either get to make extra funds picking up odd jobs or they say you can't (and probably flag you, making you have to report to them more often than you should). There is also a Self-Employment Program that funds and assists you for 52 weeks.. a pilot program I believe, through the CBDC (Canadian Business Development Corporation). 

Sometimes, it's just best to let a sleeping dog lie.


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## Visual-Q (Dec 14, 2003)

Sounds like your typical government Catch 22. EI is supposed to help you out and get you back on your feet and yet as soon as you make any progress they pull the rug out from under you. It should be a simple matter of declaring the income and a formula for deducting a percentage from your EI earnings but of course it could never be that simple.

With respect to being self employed and using EI. I'm self employed and I don't really see how you could make it work at least as a designer. What are you going to do, make an EI claim every time you go a couple of weeks without work and cancel it the next day when someone calls? I guess if you had long-term contracts and lapses between it would work but otherwise...


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## corkybeans (Oct 10, 2011)

Yes, that's it exactly... a Catch 22. Thing for me is that I just waited 2 months for my claim to be accepted as I quit my job which would have been the perfect job outside of the abuse, wage loss threats and name calling. I worked off-site so it was almost bearable for the most part but I finally decided it was enough. Where I live, it's primarily bilingual (required) and I'm rural so not a lot of opportunities. I came here from the West with 20 years in prepress. It was for my husband's sake as I was watching him drive nails in his coffin with regards to overworking at his thankless job.

I told EI that a suspension was unacceptable given my circumstances plus the fact that my husband is on a fixed income (disability) that won't support us. That's when the woman I spoke to suggested the Self-Employment Program. Another Catch 22 in the making. At least I had the presence of mind to use call blocking when inquiring about this. I'm trying to do the right thing but at whose expense?


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## Kosh (May 27, 2002)

There's lots of catch-22's in EI, I just have to talk to my mom for a reminder.

For instance, from memory, they seem to classify certain locations in Canada less likely for employment, but my mom had to move to one of these locations to get a job, in fact she was more likely to get a job there. Ie. She had to move from the City (where they thought she was more likely to find a job) to a rural area (where they thought she was less likely to find a job). When in fact it was more likely she would find a job there AND it would cost here less to live there. Because of that she lost her EI benefit for a few months before she got her job in the country. 

That was many years ago, when I was a teen, though. It's just one of those stupid government rules that stick in your mind, though.


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## tdu (Sep 15, 2008)

corkybeans said:


> In case anyone ends up in my situation, here's the answer. There is a clause "In some circumstances..." where you can earn money from self-employment BUT... you can't just do it and claim that money. You have to apply, then your claim is suspended for up to three weeks while they make a decision if it's allowable, then you either get to make extra funds picking up odd jobs or they say you can't (and probably flag you, making you have to report to them more often than you should). There is also a Self-Employment Program that funds and assists you for 52 weeks.. a pilot program I believe, through the CBDC (Canadian Business Development Corporation).
> 
> Sometimes, it's just best to let a sleeping dog lie.


I know someone there must have given you this info, but it's not correct from my experience. For several years I worked a seasonal job while doing my design work through my own business part time. All I had to to do was fill in that business info accurately when I applied, and I was allowed to earn money through the business as long as I reported it. If I claimed anything over what my EI payments were, I just did not receive EI for that period. It was never a hassle, and there was never any waiting period beyond the standard EI waiting period. The claim was never stopped/suspended and started again as suggested earlier in the thread.

I know another person still doing the same arrangement, and they have actually made it easier for people to do this now. I guess they are trying to support small businesses and people trying to work and start up a business at the same time. It sure helped me in that regard. Plus, people getting part time jobs can lead to a full time job. So it wouldn't make sense to not allow people to work at all while on EI.

I have know a ton of people from the seasonal work field and have never heard of ANYONE being told they can't work while on EI. All earnings have to be claimed though, and you can't collect once you are working full time. And you are expected to look for full time work, and may be asked for records to prove you are. 

Canada has tons of seasonal workers, and a huge percentage of them collect EI while working odd jobs in off season. You can even earn a certain % of your claim without it affecting your claim (something like under 20%). Basically EI pays a % of what you were making before you applied, and you can never legitimately earn more than that while on it. Of course, some people work cash jobs as a loophole.


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## macintosh doctor (Mar 23, 2009)

EI - I highly recommend you speak to a tax professional or government rep.
Being self employed is amazing but the government treats you like crap when you need any benefits - so I pay into a private program for extra coverage - disability / injury insurance. ( lost income etc )
My wife which is also self employeed - when she gave birth, we asked if we can claim any benefits they said nope - your on your own. 
When she was injured - they said nope again but said to go on welfare ( which for obvious reasons she did not do ) instead she used the insurance she was paying into. 
It takes a certain individual to be self employeed - so I would recommend you speak to the local government offices for clarity.
But remember even if you are self employeed you still have to pay UI and EI and CPP etc - next to impossible to receive, when you needed :-/


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## tdu (Sep 15, 2008)

macintosh doctor said:


> EI - I highly recommend you speak to a tax professional or government rep.
> Being self employed is amazing but the government treats you like crap when you need any benefits - so I pay into a private program for extra coverage - disability / injury insurance. ( lost income etc )
> My wife which is also self employeed - when she gave birth, we asked if we can claim any benefits they said nope - your on your own.
> When she was injured - they said nope again but said to go on welfare ( which for obvious reasons she did not do ) instead she used the insurance she was paying into.
> ...



I know several self employed people paying into EI who were able to use it when needed (EG maternity leave). Not saying you are lying in your case, just saying I know people it's worked fine for. It's only been a few years now that they have even allowed self employed people to pay into it. In my case, I collected 90 days of EI while I was injured about 6 years back as well.

I'd love to have private insurance, but I can't afford it yet. The business is still growing and to get covered for disability, income loss, and injury is mighty expensive.

Also, as far as I know you can choose to not pay into CPP when self employed.


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## Sonal (Oct 2, 2003)

macintosh doctor said:


> But remember even if you are self employeed you still have to pay UI and EI and CPP etc - next to impossible to receive, when you needed :-/


If you are self-employed you have to pay CPP, but you are EI-exempt. (Unless you enrolled in that recent special benefits for self-employed people thing, which IMO is not a great deal for most people.)

CPP is not hard to receive when you are self-employed (provided you are at or near retirement age) but as I understand it you can forget about EI--which is why you don't have to pay into EI.


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## tdu (Sep 15, 2008)

Sonal said:


> If you are self-employed you have to pay CPP, but you are EI-exempt. *(Unless you enrolled in that recent special benefits for self-employed people thing, which IMO is not a great deal for most people.)*
> 
> CPP is not hard to receive when you are self-employed (provided you are at or near retirement age) but as I understand it you can forget about EI--which is why you don't have to pay into EI.


This is where I am getting confused. As far as I know for at least the last year they have the option on Services Canada to setup EI payments if you are self-employed. I wasn't aware it was any kind of special program. I thought they just allowed self employed people to pay into and receive EI benefits now. I know my girlfriend is doing it as of about 6 months ago.


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## Sonal (Oct 2, 2003)

tdu said:


> This is where I am getting confused. As far as I know for at least the last year they have the option on Services Canada to setup EI payments if you are self-employed. I wasn't aware it was any kind of special program. I thought they just allowed self employed people to pay into and receive EI benefits now. I know my girlfriend is doing it as of about 6 months ago.


Yes, it's so the self-employed can receive benefits like maternity leave and compassionate care leave, and I think one or two others. But as I understand it, you don't get access to every benefit of EI.
Self-employed to get EI benefits - Canada - CBC News

Being of an age where I might possibly have children, I did some number crunching to see if it made sense to start doing this or not. For me, it simply doesn't.

Rules are different in Quebec though. (I don't know how, it's just that the rules are always different in Quebec.  )

ETA: Here, from the source. Employment Insurance Special Benefits for Self-Employed People


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## Sonal (Oct 2, 2003)

Also... if you are self-employed and mistakenly pay into EI, the government will not tell you "Hey, you are giving us too much money." They just keep it. I believe it is possible to claim it back, but I don't think it's easy. 

If you don't pay in enough, they will eventually hunt you down and tell you to pay up, and tell you to the penny exactly what you owe them, interest included.


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## tdu (Sep 15, 2008)

Sonal said:


> *If you are self-employed you have to pay CPP*, but you are EI-exempt. (Unless you enrolled in that recent special benefits for self-employed people thing, which IMO is not a great deal for most people.)
> 
> CPP is not hard to receive when you are self-employed (provided you are at or near retirement age) but as I understand it you can forget about EI--which is why you don't have to pay into EI.


Again, I am no expert on any of this. I know several self employed people who do not pay CPP. If they have to, how are they not?


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## Sonal (Oct 2, 2003)

tdu said:


> Again, I am no expert on any of this. I know several self employed people who do not pay CPP. If they have to, how are they not?


They haven't been caught?

Who contributes to the Canada Pension Plan?


> If you're self-employed, you pay both portions, making the payment at the time you pay your income tax.


It's pretty black-and-white about paying CPP. If you are self-employed, you need to contribute both the employer and employee portion. 

There are some exemptions if you are collecting CPP or if you live on a reserve, and maybe one or two others, but very, very few.


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## macintosh doctor (Mar 23, 2009)

tdu said:


> I know several self employed people paying into EI who were able to use it when needed (EG maternity leave). Not saying you are lying in your case, just saying I know people it's worked fine for. It's only been a few years now that they have even allowed self employed people to pay into it. In my case, I collected 90 days of EI while I was injured about 6 years back as well.
> 
> I'd love to have private insurance, but I can't afford it yet. The business is still growing and to get covered for disability, income loss, and injury is mighty expensive.
> 
> Also, as far as I know you can choose to not pay into CPP when self employed.


At the time ( about 6 years when my kids were born - rules were different )
as for the comment: you can not afford private insurance - that is not the answer..what if something happens, you will be so out of pocket - you will end up losing a lot more than you bargained for..

- insurances to have when self employed - no ifs or butts
- E&0, LIABILITY, PROPERTY, INJURY FOR BOTH PARTIES
- DISABILITY, INCOME LOSS ETC.. ( i think i might have even forgot a few )
- Life, terminal illness 
do not wait to be sued...( or worse injured - because the government will standby you [ I mean that - they will stand by you and watch you suffer] )

Disability and personal injury / loss insurance cost about ( $135 per month ), has an automatic rider increase every year for inflation.. - every 8 years if you do not use it.. they send you a $8000 cheque back..( as bonus ) [costs and bonus - vary per client ]


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## tdu (Sep 15, 2008)

macintosh doctor said:


> At the time ( about 6 years when my kids were born - rules were different )
> as for the comment: you can not afford private insurance - that is not the answer..what if something happens, you will be so out of pocket - you will end up losing a lot more than you bargained for..
> 
> - insurances to have when self employed - no ifs or butts
> ...


$135 is far less than I was quoted by a few companies. What company do you use if you don't mind me asking?


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## macintosh doctor (Mar 23, 2009)

tdu said:


> $135 is far less than I was quoted by a few companies. What company do you use if you don't mind me asking?


I can give you my agent's information.
but remember - it all depends on what you want paid back to you per month, also 30 60 or 90 days start after injury/disability also some other things..

let me know and I will send you my agents info if you are interested.


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