Employment insurance income is considered a part of Net income but is not considered earned income. If this is your spouse's only source of income and he has the lower net income, then child care expenses are generally not deductible by either of you. Exceptions to this would be if he were a student or has been certified by a medical practitioner of being incapable of caring for a child. For more info please see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/214/wh/menu-eng.html and Open Form T778. The definition of earned income for purposes of Child care expenses is on Page 2
