Reconsideration of Claim and Liability for Overpayment

I. The Legislation

The Commission may reconsider any claim for benefits within thirty-six (36) months from the date that benefits were, or should have, been paid.

Subsection 43(1)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 52(1)  Employment Insurance Act   Employment Insurance Act

If the Commission decides that a claimant has received benefits to which he or she was not entitled, or has not received benefits to which the claimant was entitled, the Commission will calculate the amount and notify the claimant of its decision.

Subsection 43(1)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 52(2)  Employment Insurance Act   Employment Insurance Act

Where the Commission determines that a claimant has received benefits to which he or she is not entitled, the claimant is liable to repay the amount of benefits wrongly paid. Liability for repayment arises on the date that the Commission notifies the claimant of the amount of the overpayment.

Subsection 35(1)  Unemployment Insurance Act
Unemployment Insurance ActSection 36 Unemployment Insurance Act
Unemployment Insurance ActSubsection 43(5)  Unemployment Insurance Act
Unemployment Insurance ActSection 43 Employment Insurance Act
Employment Insurance ActSection 44  Employment Insurance Act
Employment Insurance ActSubsection 52(3) Employment Insurance Act   Employment Insurance Act

An overpayment of benefits is a debt due to Her Majesty and is recoverable in the Federal Court or any other court of competent jurisdiction or in any other manner provided by the Unemployment Insurance Act or the Employment Insurance Act.

Subsection 35(2)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 47(1)  Employment Insurance Act   Employment Insurance Act

An overpayment may be recovered by withholding amounts from subsequent benefits which are payable to a claimant.

Subsection 35(3)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 47(2)  Employment Insurance Act   Employment Insurance Act

Where the Commission is of the opinion that a claimant has made a false and misleading statement in relation to his or her claim for benefits, the time limit of thirty-six (36) months for reconsideration is extended to seventy-two (72) months.

Subsection 43(6)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 52(5)Employment Insurance Act   Employment Insurance Act

Once a claimant has been notified of an overpayment of benefits, the Commission has seventy-two (72) months to recover the amount.

Subsection 35(4)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 47(3)  Employment Insurance Act   Employment Insurance Act

Any decision made by the Commission under these legislative provisions is subject to an appeal to the Board of Referees.

Subsection 43(2)  Unemployment Insurance Act
Unemployment Insurance ActSubsection 52(2)  Employment Insurance Act   Employment Insurance Act

The Commission has the authority to write off the amount of an overpayment where certain conditions exist.

Subsection 60(2)  Unemployment Insurance Regulations
Unemployment Insurance ActSubsection 56(2) Employment Insurance Regulations   Employment Insurance Regulations

II. Principles of Law

a. Purpose and Operation of the Legislation

These provisions confer on the Commission the statutory authority to reconsider any claim. They are the legal basis for the Commission's power to determine that benefits have been improperly paid and to ask for repayment.

The purpose of these provisions is to enable the Commission to proceed rapidly with the recovery of overpaid benefits and to impose its decision on claimants itself, subject only to an appeal to a Board of Referees.

The legislative provisions for reconsideration of a claim and recovery of overpayment do not only apply to an initial claim for benefits. They also apply to the weekly claims for benefit made by a claimant. They are therefore, ongoing enforcement mechanisms which allow the Commission to examine, from week to week, errors or frauds that are brought to its attention.

Before the Commission can collect an overpayment of benefits it must take all of the following steps within three or six years of paying the benefit: it must reconsider the claim; make a decision to void the claim; calculate the amount due as an overpayment; and, send a notice to the claimant which communicates the decision and the amount due.

b. Reconsideration of Claims and Collection of Overpayments

Section 35 of the Unemployment Insurance Act   Unemployment Insurance Actand section 43 of the Employment Insurance Act   Employment Insurance Actconfer upon the Commission the right to claim repayment of benefits wrongly paid to a claimant. These provisions impose a duty on a claimant to repay an overpayment and set out the procedure for recovery of an overpayment.

Section 43 of the Unemployment Insurance Act   Unemployment Insurance Actand section 52 of the Employment Insurance Act   Employment Insurance Actprovide for four operations. The Commission may at any time in a specific period reconsider a claim for benefits. If it decides that a claimant has received money to which he or she was not entitled or alternatively, has not received money to which he or she was entitled, the Commission must calculate the amount due or payable and notify the claimant. The Commission has thirty-six months, or seventy-two months if a false and misleading statement is involved, to reconsider a claim. If it decides during this period that an amount of money is owing to it or is payable by it, then it must, still within this period, calculate the amount and notify the claimant of its decision.

If the Commission fails to reconsider a claim within the prescribed time period, it cannot later try to recover the overpayment during the course of another benefit period.

c. Notice of Overpayment

Notification is essential to complete the decision-making process created by the legislation. Notice to a claimant must take place within the specified thirty-six month deadline in order to give the Commission a right of action and recovery against the claimant. This means that the Commission has thirty-six months from the date of payment to reconsider a claim for benefits, make its decision, do the necessary calculation and notify the claimant. It is only when the Commission decides that an error has been made in the payment of benefits in one direction or the other that it must notify the claimant both of the fact that an error has been made and of the amount in question.

Canada (A.G.) v. Laforest (1988), 97 N.R. 95 (F.C.A.) A-607-87 Judgment Of The Federal Court Of Appeal

The obligation to repay an overpayment is created by Section 35 of the Unemployment Insurance Act   Unemployment Insurance Actand section 43 of the Employment Insurance Act   Employment Insurance Act. However, this obligation only arises when the Commission notifies the claimant of the amount of the overpayment. In the absence of notice of overpayment, the claimant has no obligation to repay the amount and the Commission has no right of recovery. Late notice will have the same effect as lack of notice.

Briere v. C.E.I.C., [1989] 3 F.C. 88 (F.C.A.) A-637-86 Judgment Of The Federal Court Of Appeal

This does not mean however, that the overpayment decision necessarily has to specify the amount of the overpayment or that a single notice must be sent to the claimant advising of the overpayment and its amount. The legislation does not impose any specific form on the notice to claimants.

Brien v. C.E.I.C., A-425-96, April 23, 1997 (F.C.A.)   Judgment Of The Federal Court Of Appeal
Rajotte v. C.E.I.C., A-426-96, April 23, 1997 (F.C.A.)   Judgment Of The Federal Court Of Appeal
Canada (A.G.) v. Gagnon, A-676-96, May 28, 1997 (F.C.A.)   Judgment Of The Federal Court Of Appeal
Canada (A.G.) v. Perrier, A-984-96, June 9, 1997 (F.C.A.)   Judgment Of The Federal Court Of Appeal
Canada (A.G.) v. Rouleau, A-930-96 Judgment Of The Federal Court Of Appeal, A-932-96, October 31, 1997 (F.C.A.)   Judgment Of The Federal Court Of Appeal
Canada (A.G.) v. Lemay, 2002 FCA 337, File No. A-172-01, September 17, 2002   Judgment Of The Federal Court Of Appeal

Late notice or lack of notice by the Commission under section 43 of the Unemployment Insurance Act   Unemployment Insurance Actor section 52 of the Employment Insurance Act   Employment Insurance Actwill result in the Commission being unable to recover any overpayment of benefits.

Briere v. C.E.I.C., [1989] 3 F.C. 88 (F.C.A.) A-637-86 Judgment Of The Federal Court Of Appeal

d. Waiver of Overpayment

In accordance with subsection 56(2) of the Employment Insurance Regulations   Employment Insurance Regulationsand subsection 60(2) of the Unemployment Insurance Regulations   Unemployment Insurance Act, the Commission has the power to waive an overpayment of benefits. Only the Commission has the authority to write-off an overpayment. The discretion may not be exercised by a Board of Referees, an Umpire or the Federal Court of Appeal. Although these bodies have the authority to recommend that the Commission waive an overpayment, the Commission is not bound by the recommendation.

Cornish-Hardy v. Canada, [1979] 2 F.C. 437 (F.C.A.) A-647-78 Judgment Of The Federal Court Of Appeal; affirmed [1980] 1 S.C.R. 1218 (S.C.C.)  File no. 15944 Judgement Of The Supreme Court Of Canada
Kenney v. Canada (E.I.C.), A-845-97, June 23, 1998 (F.C.A.)   Judgment Of The Federal Court Of Appeal
Canada (A.G.) v. Filiatrault (1998), 235 N.R. 274 (F.C.A.) A-874-97 Judgment Of The Federal Court Of Appeal
Campbell v. Canada (A.G.), [2002] F.C.J. No. 1130, July 24, 2002 (F.C.A.) T-576-01 Judgment Of The Federal Court Of Appeal

However, the Commission must act in a judicial manner in exercising this discretion.

Canada (A.G.) v. Lai (1998), 229 N.R. 42 (F.C.A.) A-525-97 Judgment Of The Federal Court Of Appeal
Campbell v. Canada (A.G.), [2002] F.C.J. No. 1130, July 24, 2002 (F.C.A.) T-576-01 Judgment Of The Federal Court Of Appeal

In exercising its discretion, the Commission cannot disregard the findings of fact made by the Board of Referees. The Board is a quasi-judicial body which is required by the Act to hear and receive evidence from the parties and to make findings of fact. The Commission does not hold any hearings on the merits of a claim for waiver of overpayment. The Board of Referees findings of fact therefore are owed deference.

Canada (A.G.) v. Purcell, [1996] 1 F.C. 644 at 662 (F.C.A.) A-694-94 Judgment Of The Federal Court Of Appeal
Guay v. Canada (Employment Insurance Commission), [1997] F.C.J. No. 1223 (F.C.A.) A-1036-96 Judgment Of The Federal Court Of Appeal
Campbell v. Canada (A.G.), [2002] F.C.J. No. 1130, July 24, 2002 (F.C.A.) T-576-01 Judgment Of The Federal Court Of Appeal

The absence of a false or misleading statement is a condition precedent to the exercise of the Commission's discretionary power under subsection 56(2) of the Regulations   Employment Insurance Regulations. In other words, the presence of a false or misleading declaration bars the Commission from exercising its discretionary power under Regulation 56.

Allard v. Canada (A.G.), [2001] F.C.J. No. 1148, File No. T-27-99 (F.C.T.D.) Judgment Of The Federal Court Of Appeal
Dubé v. Canada (A.G.), [2002] F.C.J. No. 871, File No. T-1375-00, June 7, 2002 (F.C.A.)   Judgment Of The Federal Court Of Appeal

e. Waiver of Overpayment

The fact that the Commission decided not to exercise its discretion and impose a penalty on a claimant for making a false or misleading statement does not prevent the
Commission from considering that such a statement has been made and accordingly, taking advantage of the extended time from thirty-six months to seventy-two months to reconsider the claim for benefits.

Canada (A.G.) v. Pilote, A-868-97, December 15, 1998 (F.C.A.)   Judgment Of The Federal Court Of Appeal

f. Appeal

A claimant who is affected by a decision made by the Commission pursuant to section 43 of the Unemployment Insurance Act   Unemployment Insurance Actor section 52 of the  Employment Insurance Act   Employment Insurance Act, has the right to appeal to a Board of Referees. However, where the Commission reconsiders a claim for benefits but does not change its earlier determination, a claimant has no right to appeal. Only a decision which has the effect of altering an earlier decision of the Commission is appealable.

Cornish-Hardy v. Canada, [1979] 2 F.C. 437 (F.C.A.) A-647-78 Judgment Of The Federal Court Of Appeal; affirmed [1980] 1 S.C.R. 1218 (S.C.C.)  File no. 15944 Judgement Of The Supreme Court Of Canada
Calder v. M.E.I., [1980] 1 F.C. 842 (F.C.A.) A-233-79 Judgment Of The Federal Court Of Appeal
Gareau. v. Canada (Employment and Immigration Commission) (1986), 77 N.R. 134 (F.C.A.) A-786-84 Judgment Of The Federal Court Of Appeal
Fortin v. C.E.I.C. (1988) 21 F.T.R. 280 (F.C.T.D.) T-472-88 Judgment Of The Federal Court Of Appeal

The time limit for appealing to a Board of Referees begins to run from the day on which the Commission's decision of the amount of the overpayment is communicated to the claimant.

Canada (A.G.) v. Laforest (1988), 97 N.R. 95 (F.C.A.) A-607-87 Judgment Of The Federal Court Of Appeal

Subsection 79(1) Unemployment Insurance Act
Unemployment Insurance ActSubsection 114(1)  Employment Insurance Act   Employment Insurance Act

III. Related Topics

• Amendment of Decision
• Appeal to Board of Referees
• Appeal to Umpire
• False and Misleading Statement