Making Money on Parental Leave In Canada

 parental leave baby

Can I make money while on Parental and Maternity leave? This is a frequent question my Canadian Budget Binder fans want to know. So, I went to Mom Expert Sarah Deveau Author of Money Smart Mom to share the inside scoop for our fellow Canadians wanting to learn about making some extra money while they are off work caring for their new bundle(s) of joy.

 

Parental Leave Earnings

 

Here’s what Sarah has to say….

If you’ve just had a baby and are living on the reduced income of employment insurance maternity or parental leave payments, you might be wondering how to bring in extra income.

If you earn income while on the maternity leave portion of the benefit (the first 15 weeks), your earnings will be deducted dollar for dollar from your benefits.

If you work while you’re receiving the parental leave benefit, after the first 15 weeks, in the past you’ve been allowed to earn $75 per week or 40% of your weekly benefits, whichever is higher. Any income earned above that amount will be deducted dollar for dollar from your benefits.

However, due to the new Working While on Claim (WWC) pilot project, once you have served the waiting period, if your earnings are equal to or less than 90% of your weekly earnings that were used to calculate your benefit rate, your benefits will be reduced at a rate of 50% of your earnings each week.

Any earnings that exceed this 90% mark, will be deducted dollar for dollar from your benefits. The 50% claw-back begins at the first dollar earned.

Due to negative feedback, the government is letting anyone on parental leave after January 6, 2013 choose which way they want their income taxed – the old way, or the new way.

For some examples of how these calculations work, see the Service Canada website. If in doubt, write to Service Canada and get their advice and calculations for your individual income level in writing.

Here are a few suggestions for ways you can earn additional income while on parental leave to help with your maternity/parental leave budget:

  • Drive a school bus
  • Offer evening and weekend babysitting for friends and family
  • Deliver newspapers
  • Operate a drop in day home
  • Sign up to participate in focus groups
  • Create a freelancing or in-home business in your area of expertise (tutoring, writing, music lessons, etc.)
  • Join a virtual office company in your area
  • Work as a casual employee, on occasional weekends or evenings when you have access to free childcare (spouse or relatives)
  • Sign up as a secret shopper (be sure to join a reputable company)
  • Work temporary jobs, such as seasonal retail help

If you earn money while on parental leave, you will be required to fill out regular reports. Be sure to contact Service Canada if you have any questions about earning or reporting income while on parental leave.

What other ways did you earn extra income while on Parental leave?

Guest Post By: Sarah Deveau is a mom of three, and the author of Money Smart Mom: Financially Fit Parenting. Visit her website at MONEY SMART MOM or pick up her book from Chapters Indigo.

Here is a Book Review that I did for Sarah once I finished reading her book… Money Smart Mom Financially Fit Parenting:  Book Review Mr.CBB.

 

Money Quote Logo CBB

 

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Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
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Comments

  1. Oh EI, how I love and hate you. You’re entitled to 55% of your income to a MAX of $457/week. Having the max annoys me, it should be 55% of your income, period. I pay into EI based on my salary so why shouldn’t I be entitled to 55% of my income? UGH. Honestly it is easier to get work that pays in cash so you don’t have to deal with EI and the income tax annoyance if, in my case at least, you can find a babysitter, can be away from your baby more than 3-4hrs if breastfeeding and have transportation while hubby is at work all day…

    • My mate when his wife goes back to work will pay day care $1200 a month and they want $2k down, $60 admin fee and half last months… Bloody hell. She is the same as you as she makes near 6 figures but doesn’t get near that on mat leave.Luckily they have no debt and their mortgage is almost paid off. Sucks.. that’s all I know.

  2. Thanks for the info, while this won’t apply to me for a long time, I know lots of friends who need to make some side income while on maternity leave, I’ll definitely be forwarding this post to them!

  3. Great info. I definitely worry about making enough money when it comes time to for me to have children.I’m sure I’d keep up my online work part time.

    • Try to live on a budget that incorporates your mat leave income for a few months so you can adjust and it won’t be a shock to the financial system. If you can’t live on it.. well I would say to anyone that they need to sort out whether they can afford to be having another child. The online work will be very helpful for you. Cheers Mr.CBB

  4. Sherease MacCraken says:

    I am currently using Swagbucks to make some extra cash. Trying to find Focus groups or secret shoppers I am finding difficult here in Halifax, Nova Scotia

    • We go to focus groups whenever we can because they are easy money. Sometimes we get $100 for an hour of our time each.. and free product. If you search kijiji that’s where we find ours and we are in the system for our local city who holds them. Cheers Mr.CBB

  5. Anne @ Unique Gifter says:

    This was really interesting. I have never really thought about the claw backs before. I guess it makes complete sense, as the idea is to support parents because they’re not working. Plus, all of the other welfare/EI/disability payments work the same way, with a bit of earning room, but after that it’s treated like double dipping.

    • Having children is not going to get any better financially for most so it’s so important to save and budget and learn to live on EI payments before you go on mat leave. At least that is what we would do just so we know what we are in for. Cheers Mr.CBB

  6. Interesting, my daughter is actually on a Mom Swap in her area where they sell to each other outgrown clothes and toys. She has made some money this way and also saves on clothes for my granddaughter!

  7. I didnt really make money but saved a lots by couponing and looking for clearouts on diapers the most i paid for a pk of diapers was $4.00. Saved my family tones by couponing great when on materiny leave, good way to meet new moms too

  8. John S @ Frugal Rules says:

    Interesting. I know here in the States, when you’re on Short Term Disability, you’re not able to work to bring in income. It varies by company, but usually the period last for six weeks. After that you can usually use vacation/accrued sick time to take off longer and are able to bring in income at that point.

  9. Mary F Campbell says:

    Still didn’t figure out how to enter. :-(

  10. Christine Weadick says:

    Things sure have changed since my kids were new-borns. I had 15 weeks mat leave at 60% I think it was. Those few weeks flew by way too fast for me. With my daughter I took a couple of extra weeks as it was the summer, mat leave ran out half way through August so I said to heck with it and I’ll be back after Labour Day. With the younger son I wasn’t working to begin with so no mat leave but I was a stay at home Mom which was fine with us then. Back then I worked part time and my husband worked midnights so he was my care giver for the kids, so long as he wasn’t late coming home we were good, but we spent about 3 years being a couple of ships passing in the night….he came home and I left with in a couple of minutes.
    My daughter’s daycare for the grandson is subsidized as she is a single mom and he goes to a home based daycare where they just love him so it’s good for both of them.

  11. I am self – employed (I look after children in my home) so because of this, I didn’t qualify for paid mat leave. I don’t pay into it (income tax, yes…extras, no). I had to choose not to take any work leave when I had my son 3 years ago. My mother came to my home while I was in the hospital and continued to keep the children I looked after, I came home from the hospital on a Friday evening, and was back in the swing of things first thing Monday morning. It wasn’t easy but we couldn’t afford for me to lose the money. However, I have a few friends who have been on mat leave and made extra money by doing party sales (scentsy, lia sophia, etc).

  12. To earn money while on mat leave I had a yard sale and also sold a bunch of stuff online that was just sitting in the basement. I also sold my Smurf collection for about $3000. I joined something called CTI that I learned about at a baby show but I never went. It’s one of those testing groups. You test out products or foods and answer questions for 20-60 min and earn around $15 – $30. I never found the drive worth the money to me but if you live in the area I’m sure it would be good. I also started couponing. I am thinking about taking in a few kids on my next mat leave and doing a daycare for a year or so after mat leave so that daycare isn’t so expensive when I go back to work (if I wait until my son is in school to go back then I’ll send half :-) I’m not sure I understood the new WWC mentioned above. It sounds crappy to me though and I’m also worried because I go on EI seasonally and I heard there will be new government rules soon that will make it harder for seasonal workers to collect EI :-(

  13. joanne tjerno says:

    Great post…..Due to having benefits through my work im unable to work part time unless its for cash….i cant even go back to my work part time as i need to work 40 hours to get the benefits…..to make some extra cash here and there I have also joined mom swap groups on facebook and sold old clothes and toys of my children. I also babysit a few hours a week for one of my friends who would pay for my cable/internet bill. Other than that not much else to do. Just stick to a budget, coupon when i can and find very inexpensive ideas for entertainment and family time. :)

  14. Very interesting! Here in the states you definitely get a reduced portion of your pay while on maternity leave. The good thing is that your job is protected for 6 months after your baby is born, however only about half of that is paid for. What is that like for Canada? Do they protect your job for a certain amount of time without pay?

  15. theoutliermodel says:

    Focus groups are fun to do regardless of whether or not you’re on leave :) I’m registered for several focus group companies and I’ve gotten to do interesting groups on fashion, services and food (yes, you get to taste test!). Usually they pay $50-75 for an hour of your time.

  16. debtandthegirl says:

    Ugh! Reading posts like this makes me wish I lived in Canada sometimes :)

  17. According to services canada, they don’t allow anyone on parental leave after January 6, 2013 to choose which way they want their income taxed (the old way, or the new way). They are only allowing those you received a payment between 2011-2012 revert back to the old pilot project. Three representatives told me that since I started receiving parental benefits in 2013, I fall within the current pilot project with no option to revert back to the previous. Consequently, I had to quit my job as it was not financially beneficial to work a limited number of hours.

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