U.I. Act and A.O.T. Act Training Allowance Changes

Background:

Amendments to the Unemployment Insurance (UI) Act, passed in 1977, introduced the concept of developmental use of UI funds by permitting benefit recipients to attend an occupational training course upon authorized referral and without having to prove availability for work. Thus UI benefits became an alternative form of income support for adult trainees. This had the effect of freeing-up training allowance funds to be used, among other things, to augment the funds available for the purchase of training as, in fact, was done for the current fiscal year.

As a transitional measure it was decided that, under the provisions of the amended UI Act, trainees entitled to UI benefits would receive the higher of their benefits or the applicable allowance rate. Of course, supplementary allowances would continue to be available to all trainees. This arrangement took effect in September 1977, except in the case of apprentices for whom it commenced in January 1978. The effect of the transitional measure severely strained financial resources inasmuch as expenditures on allowances are much higher than forecast and, if continued, will substantially exceed the available budget. At this time of fiscal restraint no additional funds can be made available and therefore ways must be found to contain expenditures.

To this end it was decided to take certain measures, the most important one of which is to discontinue the practice of allowing trainees entitled to UI benefits the higher of these benefits or the applicable training allowance. This will put in place the scheme envisioned from the beginning, namely that trainees entitled to UI benefits will receive these as their income support while only trainees without such entitlement will be eligible for training allowances.

These measures came into effect for trainees commencing training October 2, 1978, or thereafter.

Impact on Women:

If main concern is to ensure income support while in training, low wage earners and particularly women may no longer be financially able to attend CMTP Training.

There are many women employed part-time or full-time in low paying occupations. Their UI benefit will be much lower than the AOT allowance. Those clients not living with an employed spouse such as single parent mothers and young women with minimal work experience who no longer live with their parents, may face reductions of up to $93.00 per week in their income if they are no longer eligible for AOT allowances. ($93.00 is the difference between the minimum UI benefits of $32.00 and a Training allowance of $125.00 with 4 dependents) This loss of income in many cases, particularly where dependent support is involved, will reduce their ability to consider CMTP training as a means of increasing their employability.