As the ranks of self employed Canadians increases, there is a growing problem of employment insurance coverage.  What is the problem?  Self employed business owners previously were not eligible for employment insurance coverage.  As it’s especially applicable to the female entrepreneurs, business income could dry up quickly while on maternity leave.  With no business income or employment insurance benefit, the financial situation could get ugly unless there is substantial savings.

This has recently changed however with a new bill introduced for employment insurance for the self employed.  This bill extends to maternity, parental, sickness and compassionate care leave for the self employed.

According to The Telegram, here are some of the details:

..entitled the Fairness for the Self-Employed Act, would provide the following:

Maternity benefits of up to 15 weeks for mothers, beginning up to eight weeks before the expected birth date.

Parental benefits of up to 35 weeks for biological or adoptive parents while they are caring for a newborn or newly adopted child; they may be taken by either parent or shared between them.

Sickness benefits of up to 15 weeks for those unable to work because of sickness, injury or quarantine.

Compassionate-care benefits of up to six weeks for those who have to be away from work temporarily to provide care or support to a family member who is gravely ill with a significant risk of death.

The article goes on to state that the self employed individual would have to pay the same premium as a salaried worker.  However, I assume that the business would have to cover the employer portion of the EI premium.

For example, the maximum insurable earnings for 2010 is $42,300.  The employee rate is 1.73% ($731.79) with the employer rate being 2.422% ($1024.51).  If a self employed person were to opt into the employment insurance program, I would suspect that they would have to pay the full 4.152% or $1756.50 per year.

Another important point is that self employed individuals can also opt in or out of the program at the end of any tax year unless they have claimed benefits.  If they have claimed benefits, they must continue to pay EI premiums as long as they are self employed. Depending on how long term the business is expected to last, paying the premiums can get expensive.

I may be 100% self employed someday and it’s always comforting to know that there is a safety net out there.

What are your thoughts on employment insurance for the self employed??

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I’ve read more personal finance books than I care to admit. One of the themes I’ve noticed recently is in the idea of limiting beliefs. These are thoughts or beliefs about money that hinder or inhibit our financial success. We may suspect what we believe isn’t really true but the thought that it might be holds us back in life.

I asked myself recently, “What do I really believe about money that may be keeping me from living my life to the fullest?”

Things I know for sure:

1. Time plus growth equals wealth. The miracle of compound interest makes mathematical sense. Saving 10-15% of your income invested for long term growth slowing and incrementally over your working years may be the boring path to financial success but it works.
2. Spend less than you make. Live below your means.
3. Paying yourself first and automatically makes saving nearly effortless.
4. Debt hinders cash flow. Save up for what you want. Pay cash when possible.

My limiting beliefs about money:

1. Money equals security and security brings happiness and contentment.

Studies have been done to show that as long as needs are met and people have a little bit more to do with as they wish, happiness does not exponentially increase with wealth. In fact studies of lottery winners seems to suggest the opposite might actually be true. The key to being secure is having enough money and a little bit more for financial margin.

2. Thinking and talking about money is wrong. It should remain personal and private.

I’m a fairly frugal person but most people in my life wouldn’t know. They might be surprised to learn how frugal I really am. Most of our frugal choices affect only us. We live in a small house, drive one car, rarely eat out, make food from scratch and buy and sell on Kijiji. Yet I almost never tell people about our financial choices except to say we choose to live simply because it gives us the freedom to a live a more balanced life.

I still find it difficult to talk about money without fearing that others will think I’m cheap, shallow and without class. Yet, as I open up more with more people about financial issues, people are beginning to open up to me. Just recently I was at a conference and began a conversation with someone about the some of the struggles of living on a variable income. At the end of the conversation, she said, “I’m so relieved you talked so openly about this. Money is such a taboo subject for so many people. I really needed to talk about this but I didn’t want to be the one to bring it up.” I know that talking about money isn’t wrong but every time I still feel a bit vulnerable and exposed.

3. There are a limited amount of resources in the world. The more I have, the less someone else has.

I’m stuck on this one. I know somehow it isn’t true but I can’t seem to talk myself out of it. I can tell myself that if I had more I could give more and do more, but I confess it’s this limiting belief that holds me back the most.

Money is more than coin and paper currency. It carries with it themes of power, prestige, security, value, net worth and self worth. There are things about money you may believe that aren’t true and could hinder your financial success.

Have you asked yourself the same question: What do you believe about money that may not be true and could be holding you back in life?

Kathryn works in public relations and training for a non profit. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Her passions include personal finance and adult education. Kathryn, along with her husband and two children live in Ontario.

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