Cost of giving ill workers extra EI sickness benefits? $1.1B, PBO says [UPDATED]

OTTAWA – The parliamentary spending watchdog says income supports for people who are too sick to work for up to a year would cost the federal government $1 billion more than its current program.

As is, the benefit provided available through Employment Insurance covers just over half of a worker’s earnings for 15 weeks if he or she can’t work due to illness, and nearly four in 10 beneficiaries max out those benefits, according to government figures.

The parliamentary budget office estimates in a report Thursday that it would cost about $1.1 billion to extend that coverage to 50 weeks, rising to an extra $1.3 billion five years later.

Costs would go up or down depending on changes in the number of claimants and the average length of time they are off work.

The range of possibilities means additional spending could be between $899 million and $1.26 billion in the first year, and between $1.06 billion and $1.48 billion after five years.

EI sickness benefits are the only of the so-called special benefits under the EI program that the Liberals have not amended since coming to office.

However, there appears to be all-party support for a motion in the House of Commons to have a committee of MPs study extending the benefit, which hasn’t been updated since its introduction in 1971.

In 2017, the most recent numbers available, benefits were provided to more than 400,000 claimants at a cost of about $1.6 billion – about a fifth of all EI claims – but many of them run out of benefits well before they’re able to go back to work.

Just over three-quarters of the claimants who use up all their benefits don’t immediately return to work after their 15 weeks are up, budget officer Yves Giroux reported, with most staying off the job for another 26 weeks.

To provide all those claimants with benefits for the extra time they need to recover from their illnesses, Giroux calculates the government would have to raise EI premiums to $1.68 for every $100 of insurable earnings, an increase of six cents.

Workers who qualify for payments need to first qualify for EI benefits, including having worked at least 600 hours in the 52 weeks before they filed their claims, the equivalent of about 16 weeks of full-time work.

In a separate report, Giroux estimates that cutting the number of qualifying hours to 360 would allow just over 73,000 more people to qualify for payments and cost the EI program roughly $325 million in the first year.

Employment and Social Development Canada is doing an evaluation of the program that is to be completed this year. Among the department’s earliest work was a survey of people who did – and did not – claim sickness benefits.

The survey found more claimants than non-claimants said they had “insufficient income to cover living expenses while on sick leave.”