Employment insurance for freelancers
Did you know that freelancers are eligible to collect employment insurance benefits? It was news to me. At a recent CMG freelance seminar, Toronto tax specialist Sunny Widerman explained a recent change that gives self-employed people access to certain kinds of EI special benefits.
Unfortunately, there’s no EI available for freelancers who just find themselves having a slow month.
“Freelancers are considered to be employed all the time whether you’re making money or not. You could just be in a marketing cycle, so you can’t claim EI during slow periods,” Widerman explained.
There are, however, four special benefits programs available to self-employed people: maternity benefits, parental benefits, sickness benefits and compassionate care benefits.
To become eligible for these benefits, freelancers must enter into an agreement with Service Canada and pay into the program for a minimum of 12 months. You can make a claim when you’ve been registered for a year. You can opt out of the program at any time until you make a claim — at that point you’re obliged to continue paying into it for life.
It’s a financial commitment, but if you’re looking for some security in your working life — or if you can see parenthood in your near future — the program might be a good fit for you. As Widerman pointed out, the only alternative for sickness benefits for freelancers is for-profit disability insurance programs.
Widerman gives a good summary of the pros and cons of opting into the EI program on her website. And there’s more information about the program on the Services Canada website (along with some examples to help you decide whether opting into the program would be a worthwhile investment for you).
If you’re in Toronto, you can hear more about freelance tax matters from Sunny Widerman at the CMG’s first Freelance Friday workshop, scheduled for this Friday, February 7th from 10 a.m. to 12 p.m. To register for Freelance Fridays, check out this post on the CMG website.
