You can receive EI and severance pay in Canada at the same time under current temporary federal rules.
If your EI claim or the allocation of your separation earnings starts between March 30, 2025 and October 9, 2027, severance and other qualifying separation payments are not deducted from your EI benefits.
Apply for EI as soon as you stop working, even if you are still negotiating your severance package or waiting for your Record of Employment.
Samfiru Tumarkin LLP helps non-unionized employees in Ontario, Alberta and British Columbia review termination packages and pursue the full severance compensation they are owed.
⚠️ Don’t accept an inadequate severance package because you are worried about EI.
EI and severance are separate rights. Signing a release can prevent you from returning later to seek more compensation from your employer.
On This Page:
- 1. Can You Receive EI and Severance?
- 2. Current Temporary EI Rules
- 3. When to Apply for EI
- 4. Normal Severance Allocation Rules
- 5. Receiving More Severance Later
- 6. Fired, Laid Off or Fired for Cause
- 7. EI Does Not Replace Severance
- 8. Common Questions
Can You Receive EI and Severance Pay at the Same Time?
Yes. Under the current temporary EI measure, qualifying separation earnings are not deducted from EI benefits when the claim or allocation starts within the federal eligibility window.
The measure applies when the EI claim or separation-earnings allocation starts between March 30, 2025 and October 9, 2027.
Separation earnings can include:
- Severance pay
- Pay in lieu of notice
- Vacation pay paid because employment ended
- Closure bonuses
- Accumulated sick leave credits paid on separation
You must still report these payments to Service Canada. Service Canada determines whether a payment is considered earnings and how the EI rules apply to your claim.
💡 Current rule through October 9, 2027:
Severance and other separation earnings are not deducted from EI when the claim or allocation starts within the temporary federal period.
What Are the Current Temporary EI Rules?
The federal government has introduced several temporary EI measures in response to economic conditions.
| Temporary measure | Current rule |
|---|---|
| Severance and separation earnings | Not deducted when the claim or allocation starts between March 30, 2025 and October 9, 2027 |
| One-week waiting period | Waived for new EI claims starting between March 30, 2025 and October 9, 2027 |
| Earlier reasons for separation | For claims starting between October 11, 2026 and October 9, 2027, only the most recent reason for separation is reviewed |
What does the most-recent-separation rule mean?
For EI claims starting between October 11, 2026 and October 9, 2027, Service Canada will review only the reason you left your most recent job.
If you lost that job through no fault of your own, all insurable employment and hours accumulated during the qualifying period can be used to establish your claim.
Can long-tenured workers receive additional EI weeks?
Some long-tenured workers with claims starting between June 15, 2025 and June 12, 2027 can receive up to 20 additional weeks of regular benefits, to a maximum of 65 weeks, if they meet the federal requirements.
Review the Government of Canada’s current temporary EI measures for the complete eligibility rules.
When Should You Apply for EI If You Receive Severance?
Apply for EI as soon as you stop working.
Do not wait for:
- Your severance negotiations to finish
- Your employer’s signing deadline to expire
- Your severance payment to arrive
- Your Record of Employment to be issued
- A lawyer to finish negotiating your termination package
You can submit your EI application before your Record of Employment is available and provide missing documents afterward.
⚠️ Apply promptly.
If you wait more than four weeks after your last day of work, you may lose EI benefits.
You can apply through the Government of Canada’s EI regular benefits application.
Do you have to report your severance?
Yes. Report severance, termination pay, vacation pay and any other separation payments accurately.
The current temporary measure can prevent those payments from being deducted, but it does not remove your obligation to report them.
How Does Severance Normally Affect EI?
Outside the temporary federal measure, severance and other separation earnings are normally allocated from the week employment ends.
Service Canada spreads the payment across a period based on your normal weekly earnings.
Example:
If your normal earnings were $1,500 per week and you received $15,000 in severance, the payment could be allocated across approximately 10 weeks. Under the ordinary rules, EI payments would normally begin after that allocation period.
Unless the federal government extends or replaces the current temporary measure, these ordinary allocation rules are scheduled to return for claims or allocations starting after October 9, 2027.
Does a lump-sum severance payment affect EI?
Under the current temporary measure, qualifying lump-sum separation earnings are not deducted when the claim or allocation begins within the temporary period.
Under the ordinary rules, a lump-sum severance payment is allocated across weeks based on your normal earnings rather than treated only as income in the week it was paid.
What about salary continuance?
Salary continuance can be treated differently depending on whether you remain employed and how the arrangement is structured.
Report every payment to Service Canada and allow it to determine how the income affects your claim.
What Happens If You Receive More Severance After EI Starts?
You must report any additional severance or settlement compensation to Service Canada.
If the payment falls within the current temporary separation-earnings measure, it will not be deducted from EI benefits.
Outside the temporary measure, additional severance can be allocated back to the period following your termination. That can create an EI overpayment that must be repaid.
What if a lawyer negotiates a larger settlement?
Report the settlement to Service Canada. The EI treatment depends on what the payment represents and the rules applying to your claim.
Service Canada looks at the true nature of the payment, not only the wording used in the settlement agreement.
Should you give up severance to avoid an EI repayment?
No. EI is temporary government income support. A proper severance package can be worth far more than the EI benefits at issue.
Before accepting an offer, read our guides to negotiating a severance package and full and final releases.
Can You Get EI If You Are Fired or Laid Off?
Service Canada makes the final decision about EI eligibility based on the reason your employment ended and whether you meet the other requirements.
| How employment ended | What to know about EI |
|---|---|
| Layoff or job elimination | Apply for EI. Losing work through no fault of your own can qualify if you meet the remaining requirements |
| Termination without cause | Apply for EI. Receiving a termination letter or severance package does not prevent an application |
| Employer alleges cause or misconduct | Apply and provide your version of events. Service Canada makes its own misconduct decision |
| You resigned | You can qualify only if Service Canada finds that you had just cause and quitting was your only reasonable alternative |
Does an employer’s “for cause” allegation decide EI eligibility?
No. Your employer does not make the final decision about whether you lost your job because of misconduct under EI rules.
Service Canada considers information from both you and the employer before making its decision.
The EI misconduct test and the employment-law test for just cause also require separate assessments. Read our guide to termination for cause in Canada.
EI Is Not a Substitute for Severance Pay
Receiving EI does not reduce the amount of severance your employer legally owes you.
| Employment Insurance | Severance Pay |
|---|---|
| Paid through the federal EI program | Paid by your employer |
| Provides temporary income while you are unemployed | Compensates you for the termination of your employment and the notice you should have received |
| Calculated under federal EI rules | Determined by employment standards, common law and your employment contract |
| Service Canada decides eligibility | Your employer’s first offer does not determine your full entitlement |
For many non-unionized employees, full severance is much greater than the minimum amount required by employment standards legislation.
Depending on your age, position, length of service and access to comparable employment, you could be owed as much as 24 months’ pay.
Read our guide to severance pay in Canada or use the Severance Pay Calculator.
⚠️ Your employer can’t tell you to “just collect EI” instead of providing proper severance.
Government benefits do not replace your employer’s termination obligations.
EI and Severance Pay: FAQs
Can you collect EI while receiving severance in Canada?
Yes. Under the current temporary measure, separation earnings are not deducted when the EI claim or allocation starts between March 30, 2025 and October 9, 2027.
Should you wait until your severance runs out before applying for EI?
No. Apply as soon as you stop working. Waiting more than four weeks can cost you benefits.
Do you need your Record of Employment before applying?
No. Submit the application immediately and provide missing documents afterward.
Does lump-sum severance affect EI?
It is not deducted under the current temporary measure when the claim or allocation starts within the eligible period. Under the ordinary rules, it is normally allocated across weeks based on your normal earnings.
Does salary continuance affect EI?
It can. The treatment depends on whether you remain employed and how the payments are structured. Report the arrangement to Service Canada.
What if you receive more severance after EI begins?
Report the payment to Service Canada. The effect on your claim depends on the timing, nature of the payment and the EI rules in effect.
Can your employer reduce your severance because you receive EI?
No. EI does not replace or reduce the employer’s legal severance obligation.
Can you get EI if you were fired for cause?
Apply and provide your version of events. Service Canada decides whether the conduct amounts to misconduct under EI rules.
Can you get EI if you quit?
You can qualify if Service Canada finds that you had just cause and quitting was your only reasonable alternative.
What happens after October 9, 2027?
Unless the temporary measure is extended or replaced, separation earnings will again be allocated under the ordinary EI rules and can delay the start of benefit payments.
What if you’re unionized?
Contact your union about your termination and severance rights. Samfiru Tumarkin LLP’s employment law team can’t assist with unionized workplace disputes.
Lost Your Job? Apply for EI and Review Your Severance.
Applying for EI and reviewing your severance package are two separate steps. Start your EI application promptly, but do not sign away your employment rights before finding out what your package is worth.
The employment lawyers at Samfiru Tumarkin LLP help non-unionized employees in Ontario, Alberta and British Columbia review termination packages and pursue the compensation they are owed.
Before you sign, always check first.
➡️ Review Your Severance Package or call 1-855-821-5900.