Yes, you can receive EI and severance pay in Canada. Under a temporary federal measure currently in effect, severance and other separation earnings are not deducted from EI benefits for qualifying claims or allocations that start between March 30, 2025 and October 10, 2026.
Employment Insurance and severance are two different rights. EI is a federal government benefit that provides temporary income while you are unemployed. Severance is compensation your employer owes when your employment ends.
Apply for EI as soon as you stop working even if you are negotiating a larger severance package. Don’t wait for your employer’s signing deadline, your Record of Employment or the end of severance negotiations before applying.
On This Page:
- 1. Can You Get EI and Severance?
- 2. Temporary 2026 EI Rule
- 3. How Severance Normally Affects EI
- 4. When to Apply for EI
- 5. What If You Get More Severance Later?
- 6. EI Is Not a Substitute for Severance
- 7. FAQs
Can You Get EI and Severance Pay at the Same Time?
Yes. As of August 2026, qualifying employees can receive EI without having separation earnings such as severance deducted from their benefits under a temporary federal measure.
This temporary rule applies when the EI benefit period or the allocation of separation earnings begins between March 30, 2025 and October 10, 2026.
Separation earnings covered by the temporary measure can include:
- Severance pay
- Pay in lieu of notice
- Vacation pay paid because employment ended
- Closure bonuses
- Accumulated sick leave credits paid on separation
The federal government introduced this measure to improve access to EI during changing economic conditions.
What Is the Temporary EI Rule for Severance in 2026?
Until October 10, 2026, qualifying EI claims can start without waiting for severance or other separation earnings to run out.
The federal government has temporarily suspended the normal allocation of separation earnings.
There is also currently no normal one-week EI waiting period for new claims starting between March 30, 2025 and October 10, 2026.
This means an employee who loses their job during the temporary period can potentially:
- Receive a severance payment from their employer
- Apply immediately for EI
- Receive EI without the severance being deducted under the temporary measure
You still need to meet the normal eligibility requirements for EI regular benefits, including having enough insurable hours and being ready, willing and capable of working.
Does the temporary rule apply to every EI claim?
No. The timing of your benefit period or separation-earnings allocation matters. Service Canada determines whether your claim falls within the temporary measure.
What happens after October 10, 2026?
Unless the government extends or changes the temporary measure, the ordinary EI allocation rules are scheduled to apply again after October 10, 2026.
How Does Severance Normally Affect EI?
Under the ordinary EI rules, severance is treated as employment earnings and is generally allocated from the week you lose your job.
Service Canada normally spreads separation earnings across a period based on your normal weekly earnings.
For example, if your normal earnings were $1,500 per week and Service Canada allocated $15,000 of severance:
$15,000 ÷ $1,500 = approximately 10 weeks of allocated earnings.
Under the ordinary rules, EI payments would generally not begin until that allocation period ended.
That is not the rule currently being applied to qualifying claims during the temporary March 30, 2025 to October 10, 2026 period.
Does a lump-sum severance payment normally affect EI?
Yes, under the ordinary rules. Service Canada normally allocates a lump-sum separation payment over weeks based on your normal earnings rather than treating it only as income in the week it was paid.
What about salary continuance?
Salary continuance can be treated differently depending on how the employment and payment arrangement is structured. Report all payments to Service Canada and let it determine the EI treatment.
When Should You Apply for EI After Being Fired?
Apply for EI as soon as you stop working.
Do not wait for:
- Your severance negotiations to finish
- Your employer’s severance deadline to expire
- Your severance payment to arrive
- Your Record of Employment to be issued
- An employment lawyer to finish negotiating your package
Service Canada specifically advises employees to apply immediately after they stop working. You can apply even if your Record of Employment has not yet been received.
Should you report your severance when applying?
Yes. Report severance, termination pay and other separation payments accurately. Service Canada decides whether and how the payment affects your claim.
What if you are negotiating more severance?
Apply for EI anyway. You do not need to settle your severance claim before applying for government benefits.
What Happens If You Receive More Severance After EI Starts?
You must report additional severance or wrongful dismissal compensation to Service Canada.
For claims covered by the current temporary measure, qualifying separation earnings are not deducted from EI benefits.
Outside that temporary measure, additional severance received after EI begins can normally be allocated back to the separation period. That can create an EI overpayment that must be repaid.
What if your lawyer negotiates a larger settlement?
Report the settlement to Service Canada. The EI treatment depends on what the payment represents and which EI rules apply to your claim.
A settlement should clearly identify the nature of the amounts being paid. Payments replacing lost wages can be treated differently from compensation that is genuinely unrelated to earnings.
Should you give up severance to avoid an EI repayment?
No. EI is only temporary government income support. Proper severance can be worth far more than EI benefits.
EI Is Not a Substitute for Severance Pay
Receiving EI does not reduce the amount of severance your employer legally owes you.
The two systems serve different purposes:
- EI provides temporary government benefits while you are unemployed and looking for work.
- Severance compensates you for the loss of your employment and the notice your employer should have provided.
For many non-unionized employees, full common-law severance is much greater than the minimum amount required by employment standards legislation.
Depending on factors such as your age, position, length of service and the availability of similar employment, severance can reach 24 months’ pay.
Can your employer reduce severance because you get EI?
No. Your employer cannot use your EI benefits as a substitute for the termination compensation it legally owes you.
What if your employer says you were fired for cause?
Do not assume the allegation is valid. Just cause is a high legal threshold, and an employer’s label does not automatically eliminate your severance rights.
EI also makes its own decision about whether misconduct disqualifies you from benefits. Your employer does not make the final EI eligibility decision.
EI and Severance Pay FAQs
Can I collect EI if I receive severance?
Yes. Under the current temporary measure, qualifying separation earnings are not deducted from EI for claims or allocations starting through October 10, 2026.
Should I wait until my severance runs out before applying for EI?
No. Apply as soon as you stop working. Delaying more than four weeks can cost you benefits.
Do I need my ROE before applying for EI?
No. You can apply before your Record of Employment is available.
Does EI reduce my severance entitlement?
No. Your legal severance entitlement is determined separately from your eligibility for EI benefits.
Will severance affect EI after October 10, 2026?
Under the ordinary rules, yes. Unless the temporary measure is extended, separation earnings will again normally be allocated and can delay EI payments.
What if I receive additional severance after starting EI?
Report it to Service Canada. Whether it affects your benefits depends on the timing and nature of the payment and the rules applying to your claim.
If you have lost your job, handle EI and severance as two separate tasks: apply for EI promptly and review your severance package carefully before signing.
Samfiru Tumarkin LLP helps non-unionized employees understand what they are actually owed after termination and negotiate severance packages that reflect their full legal rights.