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Conservatives reverse controversial EI change

Changes to employment insurance introduced by Human Resources Minister Diane Finley left workers worse off and today the Conservatives announced they would reverse the pilot project.

The Conservative government has reversed a controversial change to employment insurance after weeks of being criticized by the opposition.

The pilot program, introduced Aug. 5, replaces the previous system that clawed back claims paid to EI recipients who worked part-time once their pay exceeded 40 per cent of their benefits, or $75 a week, whichever was greater.

The pilot program reduced the clawback on new earnings to 50 per cent, but kicks in with the first dollar earned, not at 40 per cent.

The effect was that low-wage earners wound up penalized by the new system; however, those who worked longer hours and at higher pay could keep more of their earnings.

Opposition MPs argued the change hurt the most vulnerable and took away any incentive to work while collecting EI.

A person receiving benefits of $330 a week and earning an extra $150 at a part-time job would bring in $405 under the pilot system, compared to $462 before the change.

Human Resources Minister Diane Finley announced the reversal Friday afternoon to allow EI recipients to keep the first $75 they earn in benefits while working part-time.

In a release, the minister said the clawback discouraged Canadians from accepting more available work.

The changes come into effect Jan. 6, 2013, but will be applied retroactively to Aug. 5, 2012.

Starting in January, claimants must request to revert to the old pilot program's regulations within 30 days of their last EI benefit payment.