Personal Finance

Severance payment, self-employed and EI

  • Last Updated:
  • Feb 15th, 2020 10:50 am
[OP]
Sr. Member
Dec 8, 2012
889 posts
542 upvotes
Calgary

Severance payment, self-employed and EI

Hi all,

I was laid off recently and got a small severance package. As I understand, I apply for EI right away, but my severance package affects the first day of EI payments - they actually count how many days are covered, add vacation payment, add one week and then start the EI transfers. My question is about the side job I have - I install the physical security systems (alarm, CCTV) for residential and SMB. I did it before, when was employed in the security field, and I'm thinking about making this activity my primary source of income now. As the business is just starting, I'd appreciate a small support in form of EI payments. So the questions are:
1. Does the start day of the EI payments counts my income from the self-employment business, as it does count severance+vacation?
2. Whatever I make a week, they divide by 2 and decrease the EI payment. If I reach the threshold (90% of weekly payment, max around $500), they just count every dollar. Eventually, when I make $500+ a week, they just cut the payments for that week. I don't really have a lot of work yet, so $500/week is probably what I will make on average. I don't really understand the EI system in this case - do they motivate me not to work at all? Why would I, if I end up making the same? I can just stay home for a year and send resumes, fill up the EI reports, do nothing. I assume, some people would even consider work for cash and keep the full EI payments.
I'm in Calgary, if it makes any difference in terms of the questions above. Thank you!
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