Small businesses fight for refund of EI premiums
You’ve probably seen or heard the ads warning that many small businesses are unnecessarily paying EI premiums on family members who work in the business since they won’t ever be able to collect benefits.
The rule is that if a family employee is paid about the same and works roughly the same hours as other workers with similar jobs, then EI premiums should be deducted and the person is eligible to claim EI benefits. Sometimes though, ineligible relatives end up paying for something they’ll never enjoy.
This is why they should fight back, say services like Grant's International, GoFoRefund and ei-refund, which will intercede on your behalf with the government, fill out the necessary forms, and help you collect your refund.
That means applications filed prior to December 31 could total over $7000 in refunds per family member, the services claim, not including the annual $1500 saving that will continue each year into the future.
If they don't get you any money back, you don't pay anything. If you do though, the finder’s fee could be as much as 25 to 30 per cent of the take. But that’s still a lot more than you were going to get, they argue.
And they’re right – except the Canadian Federation of Independent Business will do the same thing for free and there’s nothing stopping you from dealing with the government directly, assuming you're used to the paperwork that comes with being self employed.
Has anyone made a successful EI claim? Was it worth the fee or could you have done things on your own just as easily?
By Gordon Powers, MSN Money
Posted by: TM | Nov 16, 2021 2:00:39 PM
I went through the process myself and was successful in getting my own refund - barely took any time. All in all - probably took me under 5 hours between the forms, following-up and the interview. Not bad considering the total refunds were about $6000.
Those firms who take 30% of your money are thieves considering the amount of work they need to put in.
Posted by: Jeff | Nov 16, 2021 2:15:38 PM
Well, I have never had to deal with this I have dealt with firms that do similar work for GST/HST refunds. Unless the small employer is very busy it is better to do it yourself as the actual time is minimal compared to saving 30% of your refund.
Posted by: Jake Blumes | Nov 16, 2021 2:17:07 PM
Thanks for writing about this important topic Mr. Powers. Many family businesses pay and pay needlessly for employment insurance benefits their related employees will never be able to collect. I am with Grants International and we have helped thousands of Canadian obtain refunds. It's not always as easy as TM points out and many people don't have the time or knowledge or don't want the headache of dealing with the government. We have specialists who will appeal the government decision if necessary and we have a Lawyer who will take the CRA to court if necessary. We do all this with no upfront costs and if there is no refund, there is no charge. You shouldn't go to court without a lawyer and you shouldn't pull your own teeth without a Dentist.
I also wanted to point out that while the CFIB will do this for free, you still have to pay to become a member and they only point you toward the paperwork, leaving you to deal with the whole process.
We have many satisfied clients whom we have helped and you can see their glowing testimonials at
Posted by: Mike | Nov 17, 2021 12:45:40 AM
I have to laugh. Soo many other people who will never claim EI benefits, pay them... even if they did claim EI they would not benefit, for they will pay it all back at the end of the year anyway.. Its like a tax, its to help others in need.
From seeing other peoples posts though, I guess its worth looking into a refund for us who will NEVER claim.. or need to claim, EI.
I just don't agree with Family businesses thinking they should solely not have to pay into EI. Like thier that much different.
Posted by: Lolita | Nov 17, 2021 7:26:18 AM
I have been working in Canada four years now and paying EI. One year ago i was out of the country for 9 months, i returned, worked for a month and got laid off (fired). When i contacted the EI office for unemployment benefits i was told i am not eligible since i dont have enough hours. I ask what about the 4 years for which i contributed previously, i was told that i am only entitled for the current year for which i have paid EI for and not the previous years. This is very unfair.
Please let me know if u can help me as well
Posted by: Brian | Nov 17, 2021 8:02:38 AM
@ Lolita - 4 whole years?? Why don't you go back to where you came from if you don't like it?
Instead of all you people trying to fight to get it back why don't you propose to the government that they allocate the funds to the present pensioners in this country!!!
You guys make me sick, sitting here whining about a few mesely dollars off each cheque of yours....
Posted by: Rick | Nov 17, 2021 9:30:04 AM
I paid into EI for over 40 years lost my job to Mexico and was told I was ineligable for EI because of severance pay. I moved to another Province worked for another 3 years was downsized, so moved back to hometown because cost of living was too high in big city. Told again I was ineligable again. I paid into EI for a total of 45 years and had not collected one penny, they were good enough to take it off, then when I was in need was told "no way", how is that for justice?????
Posted by: Anne | Nov 17, 2021 10:08:12 AM
Rick...the situation you spoke of is the reason the employment insurance must be revamped.
I recall going through a similiar ordeal. I was shocked - knowing I'd been paying into this "insurance" for many years and when I required assistance the rules were set up to not assist me.
Posted by: Bill Schmidt | Nov 17, 2021 11:56:03 AM
the EI system is unfair for a lot of people but people related to the owners of the business that they work for are specifically excluded by LAW and not allowed to collect EI benefits. Thats why they need to not pay them but the government tells them they are eligible when they try to get their premiums back and then only denies them benefits when they try to collect them. Its dispicable!
Posted by: Jake Blumes | Nov 18, 2021 5:40:26 PM
Hi Mike, Bill Schmidt is correct, but related employees should NOT just stop paying their EI premiums without following the proper procedure to extricate themselves from the system. They may face penalties and additional assesments if they are caught on a PIER (company payroll) review.
Also, Family businesses are different in that the government has identified related employees as being in a position where they can cheat. 99.9% of family businesses are honest, hard working folks like the rest of us, but since the law is in place to prevent fraudulent claims, all employees related to the owner are considered cheaters first until they are deemed otherwise. Totally unfair to them.
Posted by: Kaye | Nov 18, 2021 5:47:52 PM
My story of Woe..goes like this.
My daughter has a Restaurant and asked me if I would be interested in joining their staff as a baker.
I was proud of the fact that at age 70 I was able to bring some money into our home.
In the fall of each year, the restaurant closes for the winter, so I, along with the rest of the staff would file for E.I.
One day I had a call from E.I requesting that I come to their office for an interview.
My husband came along with me, and was informed that he was not to help with any answering of questions.
The questions started at 10 am, I got out at 1pm.
I was told there was never a question as to the work that I was doing.
I received a letter a few days later. It was just awful! I was told that I was NOT entitled to E.I. Benefits, because .....SHE (the woman from the EI office) didn't think that I would have been treated as well if I was working for a non family member. The letter went on to say that I was to pay back all the money I had received in E.I. Benefits. It was $13.000. I was devastated. My husband and family could not believe this letter. Where was I ever going to get all that money? I received the first statement from E/I with a substantial interest charge. I couldn't sleep, my nerves were shattered. The second statement arrived with another interest charge on top of the other. I decided that the only way I could do this was to borrow the $13,000 from a financial institution. I just finished paying the last of it about a month ago. Its been a very hard few years. I am hoping that this will NEVER happen to anyone else.
Posted by: Scott | Nov 19, 2021 4:11:16 PM
Related to Kaye story, I have always been confused as to why seasonal work is eligible for EI benefits. The Service Canada web site states " EI regular benefits are offered to people who have lost their employment through no fault of their own (for example, because of a shortage of work or because they were employed in seasonal work) and who are ready, willing, and capable of working each day but unable to find work." However, shouldn't someone who knowingly takes a seasonal job, know full well they will be out of a job when the season ends? True insurance should protect against an unforeseen event, knowing that your job will end in a few months clearly isn't unforeseen.
As to the commenters saying family members who have already paid should just suck it up for the good of society, clearly they missed the part that family members are INELIGIBLE to claim, not that they would likely never claim. If the government doesn't want to extend coverage to family members (rightly so in my opinion, because it's easy to game the system), then they shouldn't be collecting the money from them in the first place.
Posted by: Tom | Feb 10, 2022 9:21:26 PM
I was taunted by what I call a salesperson. A representative from a company who claimed they could get a credit for me and the family business. There form stated a 45% fee...Really steep when you consider that all monies a person could get back are less taxes. But these companies take 45% before taxes are removed...so essentially taking around 50%, what a rip off!
They came in and had us do all the work, running around copying, faxing and putting paperwork together on our own dime, on company time, then they leave and you never hear from them again.
This happened to me. I never filled out their contract or signed on the dotted line, but after we followed up with the government and did receive the credit, the company now wants to collect 50% for doing nothing except providing us with the info and helping us in sending off a few pieces of paper.
I don't have a problem with giving them something for their troubles and initial visit, but not 50%
I am going to court to fight it out with them shortly.
Now I hear that the government has reprimanded some of these companies and closed some of them altogether...what a surprise, NOT.