Some EI recipients face nasty surprise upon returning to work
Being out of a job always means belt tightening — and sometimes dipping into savings as well.
The trouble is that harried workers often find themselves making assumptions and snap decisions under pressure that can have unexpected tax consequences.
Take EI, for instance, particularly now that those looking to collect EI face stricter, more complex rules for keeping their benefits.
Although it’s a surprise to most recipients, the government holds back part of your EI cheque in the form of withholding tax. The good news is that it assumes you’ll be in the lowest tax bracket, keeping deductions to the minimum.
The bad news is that if you do get back to work and your net income works out to more than $57,375, you may be required to pay back a portion of the benefits you received. Happily, maternity, parental and sickness benefits don’t count towards this total.
What's worse, as a group of B.C. hospital workers have discovered, that clawback can take place years after the fact — causing some to worry that they'll have to dig deep to pay the money back.
If you go even further and dip into RRSP savings to help pay some bills while looking for work, you may have a different problem though.
In this instance, the withholding tax rate depends on how much you actually withdraw, not your tax bracket. For amounts up to $5,000, the rate is 10% (21% in Quebec); from $5,001 to 15,000, it’s 20% (26% in Quebec); and on amounts over $15,000, it’s 30% (31% in Quebec).
Often people try to minimize withholding tax through smaller withdrawals, thinking the hit will be their total tax bill — only to come up short later with additional taxes owing and little income.
Have you ever had to repay EI benefits? Did you appeal? Were you successful?
By Gordon Powers, MSN Money
Posted by: dan | Jan 15, 2022 12:56:46 AM
what about the millions the feds stole from the ei account years ago not to mention the pension surplus the also stole
Posted by: Bob | Jan 15, 2022 8:34:39 AM
Well I do not think I was stealing, but I had collected, knowing full well I would be above the 57,375 limit at year end. I had no problem paying back the 30% as it just became added income for year-end tax calculations. Yes I had to pay back some I think it was 2400 on 10,000 collected.
Posted by: John | Jan 15, 2022 9:00:58 AM
This seems fair actually. if your net (not gross) is over the amount and you collect benefits why shouldn't you have to pay it back. You should be able to afford it. I do find it amusing how the government is making it harder to collect a benefit it doesn't contribute a dime to however.
Posted by: Skip | Jan 15, 2022 10:23:03 AM
I work at Chryslers and we pay the full amount possible to EI but if were ever laid off..After the third EI check we have to pay back every other payment we get.. When tax time rolls around..It makes no sence that we pay the max payout but get 2 weeks of checks and anything after that we have to pay back 100%
Posted by: T | Jan 15, 2022 11:35:35 AM
I don't disagree with having to pay it back if your net income is over the set amount.
I disagree with the income you got from EI , is what put you over the amount in the first place.
If you only make 48K that year and you were on EI for a while, you can not afford to lose that 2400 or whatever. And now you are really in trouble. Cause you have to pay it back??
Posted by: brad | Jan 15, 2022 1:09:02 PM
this is crazy, I've paid into EI my whole life just for when I might need it. Now I'm going to have to pay back what I get??? What about all the money I've paid into it?
Can I get out of paying EI and never be able to clam it if this is the case?? I pay for my car insurance every month, so what happens if I write off my car, now on top of my premiums I'm going to have to pay back the value of my car?
It's insurance not a bloody loan!!!!!!!!!!!!!!!!
Posted by: theguy | Jan 15, 2022 1:20:43 PM
The government is always hard at work trying to get more money from the working class... We aren't citizens anymore we are a cash crop ripe for the picking. If they worked half as hard at making better use of the money they already take from people they would find lots of surplus but instead they keep the garbage programs and raise taxes when they need money for new programs also known as the easy way out.
Percentages are dynamic numbers and this means they grow with increases of $ amounts, why should taxes ever go up? They shouldn't, we are being scammed by our own "protectors" kinda reminds you of organised crime doesn't it. Create the problems that they need to "protect" us from... oldest racket on the books.
Posted by: Daniel | Jan 15, 2022 5:19:54 PM
I can somewhat understand paying it back if your income if over the set amount, but I agree with two of the above posters: the EI should not count towards that set income amount, and it is called Employment Insurance, not Employment Loan.
Also, it should only be repayable for the current year, not years later.
Posted by: Cashme | Jan 15, 2022 5:53:57 PM
Governments don't have to run their programs like a business because a real business always can find a way out by using all and any short cut towards a profit. Instead of a profit governments rely on taxes to pay for anything that someone can convince the government to operate no matter how useless that something really is. If a business ever tried to run their business that way it would soon be bankrupt and out of business. Gov only goes out of business when an opposing party is elected into office. So any gov that is reelected several times in row can lose the taxpayers money and not really answer to the taxpayers. That is why gov has to learn to run itself in a fiscally responsible way otherwise everyone pays too much taxes.
Posted by: Abey | Jan 15, 2022 6:02:54 PM
The Government should give back some incentives, if a person has continuosly worked for over 5 years without claiming EI they should get 5% of the totoal EI Contribution back, if a person has worked continuosly for over 10 years then 10% back and so for on ..... i am planning to run an election as a new mp. Lets see how many votes i get
Posted by: serge blais | Jan 15, 2022 6:37:19 PM
Harper. All he does is grab money well people are getting what they voted for
Posted by: who cares | Jan 15, 2022 7:28:40 PM
should have the options to pay into this crap
Posted by: bilbo bagless | Jan 15, 2022 7:29:49 PM
responsable goverment they call themselves taking millions of dollars from surplus when times are good then blaming the short falls on seasonal workers.beatings all around i must say bend over can i have some more sir dry just the way i like it eh! next they will be clawing at the tax free savings wait and see
Posted by: diane maurice | Jan 15, 2022 7:42:16 PM
don,t we already contribute our money for the reason that if we ever get laid off then we have some income rather then welfare , it is our own money is it not , why else do we pay into it then ? we have no option , this is crap !!! i just ran my small claim out after 9 months of collectng , but paid into it for years , doesn,t seem too fair to me to have to pay back what is yours , grrrrrr....actually i aways thought that if you never have to use it , then when you turn 65 you should get a percentage of it back ., and that makes sense to me .
Posted by: like brothers | Jan 15, 2022 8:03:16 PM
well for me im having a hard time grasping the fact that our goverment are calling us canadians a bunch of cheats and even tho they don't say it to our faces thats what there doing .Sure there are people who take advantage of these types of programs, so does our goverment . The thing is that there are alot of people who depend on EI through the winter months and now the goverment says hey how about we piss all over the little guy WHY cause they can . You cant fight the goverment we the people have let this happen and until us canadians get off the couch and say something we can bitch and complain all we want and nothing is going to change . WE ARE ONLY A MEAL TICKET AND THAT IS IT NOTHING MORE NOTHING LESS .
Posted by: james | Jan 15, 2022 8:29:27 PM
Well I had to pay back 30%-but lets look at the numbers a little better. If I and my employer pay 100% premium then when I file I am allowed up to 55% (50% if you have been on the system more then 2 times in the last 3 yrs), so lets say i get 50%, clawback is 30% so really all I got back was 20% what a wounderful country we live in.
Posted by: Slapmedumb | Jan 15, 2022 9:03:25 PM
How many days to the next federal election anyway? Time to end this pompous dictatorial approach to governance and give the real power back to the people who actually pay for things. Oh Jack......we miss you!
Posted by: unhappy with govenment | Jan 15, 2022 9:26:00 PM
I think that the government gets enough of our money. We pay into EI so that we can collect if we need it. They should track down the people that abuse the system and make them pay back the money they stole. You can pay into EI your hole life and never use it then when you pass or retirer you are only entiled to two weeks of EI and that is all.
Posted by: John | Jan 15, 2022 10:10:30 PM
I once had to collect EI benefits when I was in my late teens or early 20's. I received a cheque that was much more than I had expected. When I call EI to tell them of the mistake, I was told that they "don't make those kinds of mistakes". So I spent it, several weeks later, they wanted it back. Go figure.
Posted by: p | Jan 15, 2022 10:13:13 PM
cant make ends on 50k plus AND EI? seems that the bellyaching is too much here.
try some families on less than 20k and rent and budgeting and NO LUXURIES LIKE CABLE OR INTERNET LET ALONE CONSOLE GAMES.
OH THERE'S A HOUSE CLEANING REQUIRED AT ALL LEVELS
these individuals are all out to lunch. litterally.
live within your means doesnt mean through the efforts of hundreds of thousands of low income earners who get shit on a stick for support to subside and go another day.
funny how 50k is a seemingly poor amount to be paid and holy shit if you cant keep a portion to get through the rough times.
seems the good times just keep rolling for the upper middle class. seems they cant do jack for themselves and if its restaurants and condos lifestyles they aspire they need a reality check.
homeowners are another whipped lot.
mortgage payments of 2500/month.
this is insane and uncalled for, but the running model suggests that you should be able to live well on 100k and guess what...apply for e.i. when again you get a rough spot.
tell it to the bastard waiting for a bus to head to a dirty job on 15/hr (if that) making an effort to pull it all together.
grow up and if it were possible walk a mile in someone elses shoes to feel the whole of what your fat lives and good times really amount to, namely weak and inferior populations looking for a nice comfy job that services some poor bastard who's being nicked and dimed to pay your fat salaries.
healt care workers?
if they think its bad take a another job.
harper? he's dealing with a nation of canadians who dont ever want to see the life the rest of the world lives. he knows that we are being fleeced and has faults that will inevitably turf him and his party,
then what the liberal banner? chretien? martin? and more of the same waste and no reprocussions to the politico's of the nation?
u want change?
Posted by: justsomeguy | Jan 15, 2022 10:52:07 PM
government is a con job, plain and simple. First of all, Canada, is a geographice region, while CANADA is a corporation. It is a for-profit business. If I wish to go to Walmart or Tim Horton's and buy their product, I can do so. They don't force me to buy their product, that is against the law. "Government" meantime, is the only business that forces you to pay them, against your will and under threat of loss of property and possibly imprisonment, this is called "extortion - someone aptly pointed out here in the comments that they are like the mafia - to correct that, they ARE the mafia - except according to the law in this country, anyne in the employ of another is entitled to timely and appropriate compessation - the "fruits of your labours" are your private property and no one can force you to contract with them. "Government" says that everyone must pay taxes and so you do, VOLUNTARILY, under contract - research the law and expecially the "law of contracts" and recognize that you are being scammed by criminals - if you do not pay taxes, they will call you a criminal and it is backed-up and even enforced by all of the tax0slaves whom think "everyone has to pay their farir share" - except the "government" of course, they just take - that's what the original meaning of "tax" was, "what's the take" is what criminals discuss after a heist. Research the Latin language, it is all there, "government" comes from "gubernare" which means to steer a ship
except we are not at sea people, Canada is a Common Law jurisdiction, the "law of the land"
wake up, all of you
your lives depend on it
Posted by: J.W Szeliga | Jan 15, 2022 10:54:25 PM
EI premiums is people money! We save like in any bank NO in CASINOS.No any government can touch this money. J.C screw us once for $8 bln from EI .
Posted by: auntieelle | Jan 15, 2022 11:03:44 PM
justsomeguy, I might have agreed with some of what you are saying if not for the fact that you don't know basic spelling and grammar
Posted by: ray larder | Jan 15, 2022 11:24:37 PM
Folks, YOU have to work for the GOVERNMENT to actually have a life, you'll never miss a pay-check , there ever week without fail, for as long as you want, and big everything.
Posted by: Keith | Jan 15, 2022 11:24:51 PM
This Country is making money everywhere we turn yet our government claims it's in debt and has a hard time balancing it's budget... Looking at the most resourceful countries in the world, we fish out almost as much resources as any of them, yet we're expected to believe that our country with less then a 10th of the population of most other resource rich nations, can't budget it's books! We're expected to believe this all gets sucked up in social services, healthcare, and education which are, and always have been under funded since the dawn of this great nation. What a crock of crap! Our government is owned by a corporate mafia that have been living off our resources and the people's back's for far too long!
Posted by: Patrick | Jan 15, 2022 11:26:33 PM
I do not agree with EI. I think it is a scam. You pay into it and when you do claim it cost you twice as much. You must pay back 30 % back when it comes income tax time. We should have the option to not pay into EI. Business owners do not pay unless they want to. I say let the individual decide!!!