The government’s Canada Emergency Response Benefit (CERB) program came as a sigh of relief. It paid $500 weekly payments to qualifying Canadians for up to 16 weeks. The government extended the program in June by eight weeks. As the pandemic stretches on, people still need help to secure income.
Prime Minister Justin Trudeau announced in July that the government would replace the $2,000 CERB with Employment Insurance (EI) benefits. While the government helps people transition to EI, they can leverage four additional weeks of CERB money.
Regardless of the latest CERB extension, the program will eventually expire. People will have to rely on EI. EI benefits are generally the default program to help people who lose their jobs due to no fault of their own. However, the program did not let everybody qualify for it. The government is making changes to the EI to address these issues.
A new and improved EI
The government announced significant changes to the EI program to make it closer to CERB. People can qualify for the EI with lower eligibility criteria, and the total amount they can receive is significantly more than what the traditional program offered. The government also made changes to the premiums to make it easier for Canadians. The tweaks to EI will cost the government $7 billion, but it is going to help Canadians go back to work.
Are you eligible to receive it?
The new and improved EI will come into effect on September 27, 2020. Remember that it is not an emergency fund. It is a type of insurance. Generally, your employer provides you with EI and deducts $195.5 per month in premiums from your salary. The employer also contributes to the EI.
The significant change made to EI qualification is in the minimum work hours necessary to become eligible. Initially, you would have to work for at least 420 insured hours for the last 52 weeks to qualify. The government reduced this to 120 hours because many Canadians lost their jobs due to the pandemic. The remaining EI criteria remain the same.
You cannot qualify if your employer does not deduct EI premiums from your salary. This includes any freelancers, part-time workers, and self-employed workers. For non-EI users, the government will launch the Canada Recovery Benefit (CRB) program.
The money you can receive is also more substantial with the new EI. The CRA calculates the benefit as 55% of your average weekly earnings up to $573. Now, you can get a minimum of $400 per week regardless of your average weekly salary. If you earned $1,042 per week, you could qualify to receive $573 per week. The government has also increased the minimum tenure from 14 weeks to 26 weeks.
Make the most of your EI
While a $400 EI is lower than the $500 CERB, the benefit will come in handy. Make the most of your EI benefits by using the funds as capital to invest in high-growth stocks. In a volatile market, you can find companies that still have growth potential due to their business model. One ideal high-growth stock to consider is Lightspeed POS (TSX:LSPD).
LSPD saw a massive drop in sales, and its share price dipped 65.5% amid the March sell-off frenzy. It is a company that provides cloud-based solutions to brick-and-mortar businesses like restaurants and retail outlets. As lockdowns began, its customers lost their business, and Lightspeed lost their subscriptions for its services.
However, Lightspeed adjusted its platform to cater to changing business needs of social distancing and online payments. The result was a massive surge of over 200% for the business. The company is also seeing an increasing number of customers that can drive further revenue growth.
Foolish takeaway
While the replacement for CERB may not be substantial, you can use the benefits to grow your wealth by a significant margin. Consider investing in a high-growth stock like Lightspeed POS. Tech industry operators like LSPD are capitalizing on the changing needs of the world to garner growth that can boost investor capital.
