Toronto resident Steven Lew and his wife Erin were thrilled when they found out they were expecting their first child. But their initial sense of elation was mixed with an immediate concern. ‘You start realizing you need to have time off work,’ says Lew. ‘And we didn’t know how maternity benefits/parental leave worked or how much time we were entitled to. The challenge was figuring out how much we could expect to get per month and how much time we could afford to take away from work.’
Fortunately, with their combined benefits, Erin and Steven were able to be at home with their son for a full year, with Erin heading back to work after eight months and Steven taking the final few months on his own. But it did take careful planning and saving to make it work. ‘You really need to plan ahead because there are lots of details you need to know about,’ says Steven.
There’s no question that for working couples like Steven and Erin, preparing for a new baby is more than just buying the right crib and stroller. Most new parents want to take a few months to a year off work to be with their new baby. But determining how much you’re entitled to and whether your employer will kick in anything is key’after all, you want to make sure you’re financially stable during your time off.
Maternity and parental benefit payments are part of the federal Employment Insurance (EI) program and apply equally in all provinces except Quebec (which has its own program). However, eligibility for leave from work and the length of time you can take are governed by provincial labour and human rights codes, and so can vary slightly. Be sure to check the regulations in your province.
To help you find out what you’re entitled to, here are five basic facts about how maternity and parental benefits work in all parts of Canada except Quebec (see below for info on Quebec).
Maternity and parental benefits in Canada:
- Moms: Biological mothers are entitled to a 17-week maternity leave. In addition, both biological and adoptive mothers are entitled to up to 35 weeks for parental leave, for a maximum combined leave of 52 weeks.
- Dads: Parental leave can be taken by either parent (biological or adoptive) or split between the two ‘ but it usually has to be taken within the first year of your child’s life.
- Eligibility: To be eligible for maternity or parental leave benefits, you need to have worked for at least 600 hours for one or more employers in the 52 weeks before your leave begins.
- Waiting period: There’s a two-week waiting period before your maternity or parental benefits kick in, when you do not get paid. Given you won’t receive any payments during this period, it’s important to plan accordingly.
- Amount: In most provinces, the basic benefit rate only covers 55% of your average insurable earnings up to a maximum $47,400 in earnings per year (which works out to a maximum benefit of $501 per week). Employers may offer to ‘top up’ the basic rate, but they aren’t required to do so and most employers don’t. (According to Statistics Canada, only one in five employers tops up.)
If your annual family income is $25,921 or less, you will also receive the EI Family Supplement. The additional payment depends on your net family income, the number of children you have and their ages. It’s added automatically to eligible claims and can increase your benefit rate to as much as 80% of your average insurable earnings, but your total benefit is still capped at $501 per week.
Maternity and parental benefits in Quebec:
In Quebec, maternity and parental benefits fall under a provincial program, the Quebec Parental Insurance Plan (QPIP). QPIP offers two different plans: the basic, with longer leave provisions but lower benefits; and the special, with higher benefits paid over a shorter time. Here’s how they work:
- Moms: Biological mothers may take either the basic 18 weeks’ maternity leave or the special 15 weeks. Parental benefits (paid to one parent or shared) can be paid for either 32 weeks (basic) or 25 weeks (special). Adoptive parents can receive parental benefits for either 37 weeks (basic), or 28 weeks (special).
- Dads: Paternity benefits (for fathers only) cover either five weeks at 70% or three weeks at 75%. Fathers can split parental or adoption benefits with their partners.
- Eligibility: If you are a salaried or self-employed worker, you are eligible to receive benefits, provided you have paid QPIP premiums and have earned at least $2,000 in the year before you take your leave. (Note that the conditions vary slightly, depending on your worker status ‘ whether you are salaried or self-employed.)
- Waiting period: There’s no waiting period, but allow 14 days for your application to be processed. If you qualify, your benefit payments will take effect as of the beginning of your leave.
- Amount: The percentage of your income you receive depends on whether you choose the basic or special plan, and whether the payments are for maternity, parental or adoptive benefits. In any case, benefit payments are calculated on your insurable earnings up to a maximum of $67,500. The QPIP benefits summary table shows the applicable percentages. Use the QPIP benefit calculation simulator to estimate the gross amount you may receive.
If your net family income is less than $25,921, you may be granted an increase in benefits.
More information on maternity and parental benefits is available from the Government of Canada.
Original source: How do maternity benefits work? written by Brenda Spiering for BrighterLife.ca. © Sun Life Assurance Company of Canada, 2013.
Brenda Spiering is editor of BrighterLife.ca
Tagged under: advice,finances,maternity leave,paternity leave,maternity benefits,employment insurance
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