WHAT YOU NEED TO KNOW ABOUT MATERNITY LEAVE
Even if you have the easiest baby in the world, maternity or parental leave won’t be the blissful paradise you imagined if you’re constantly stressed about your reduction in income. In this two-part series I’ll outline how the benefits work, and how you can make them work for your budget.
Maternity and Parental Leave Benefits in Canada
Unless you work for a company that offers an income top up programs or paid maternity leave most parents on leave will only receive basic maternity benefits, which fall under Canada’s Employment Insurance program.
While many people refer to the year a mother takes off after the birth or adoption of a child a maternity leave, it’s actually a combination of two leaves. The first leave is called maternity leave, and is only available to birth mothers and surrogate mothers for up to 15 weeks.
EI maternity benefits are offered to biological mothers, including surrogate mothers, who cannot work because they are pregnant or have recently given birth. A maximum of 15 weeks of EI maternity benefits is available. Benefits can be paid as early as 12 weeks before the expected date of birth, and can end as late as 17 weeks after the actual date of birth. The weekly benefit rate is 55% of the claimant’s average weekly insurable earnings up to a maximum amount.
EI parental benefits are offered to parents who are caring for a newborn or newly adopted child or children.
There are two options available for receiving parental benefits: standard or extended.
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Standard parental benefits can be paid for a maximum of 35 weeks and must be claimed within a 52 week period (12 months) after the week the child was born or placed for the purpose of adoption. The weekly benefit rate is 55% of the claimant’s average weekly insurable earnings up to a maximum amount. The two parents can share these 35 weeks of standard parental benefits.
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Extended parental benefits can be paid for a maximum of 61 weeks and must be claimed within a 78-week period (18 months) after the week the child was born or placed for the purpose of adoption. The benefit rate is 33% of the claimant’s average weekly insurable earnings up to a maximum amount. The two parents can share these 61 weeks of extended parental benefits.
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You can choose to claim extended parental benefits only if your child was born or placed with you for the purpose of adoption on or after December 3, 2017.
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After the 15 weeks, the leave is now called parental leave. This cheque can be collected by either the biological or adoptive parents for up to a maximum of 35 weeks.These benefits can be claimed by one parent or shared between the two partners, but cannot exceed a combined maximum of 35 weeks.
Parental leave benefits must be claimed within the 52 weeks following the child’s birth, or for adoptive parents, within the 52 weeks from the date the child is placed with you.
- Parental Sharing (New 2019) this new measure will provide an additional five weeks of Employment Insurance parental benefits when parents—including adoptive and same-sex parents—agree to share parental benefits, or an additional eight weeks for those who choose the extended parental benefit option. Parents with children born or placed for adoption on or after March 17, 2019, will be eligible.
How much could you receive
How much can I receive for EI Maternity and Parental Benefits? Learn more here.
We cannot tell you exactly how much you will receive before we process your application.
The basic rate for calculating EI maternity benefits is 55% of your average weekly insurable earnings, up to a maximum amount. As of January 1, 2018, the maximum yearly insurable earnings amount is $51,700. This means that you can receive a maximum amount of $547 per week.
The basic rate for calculating EI parental benefits depends on the option you choose:
Standard parental benefits are paid at a weekly benefit rate of 55% of your average weekly insurable earnings, up to a maximum amount. For 2018, this means that you can receive a maximum amount of $547 per week for up to 35 weeks.
Extended parental benefits are paid at a weekly benefit rate of 33% of your average weekly insurable earnings, up to a maximum amount. For 2018, this means that you can receive a maximum amount of $328 per week for up to 61 weeks. (The amount of $328 can be increased if you are eligible to receive the Family Supplement).
Extra Cash on Maternity Leave
How to make extra money while on Maternity leave?
Working while on leave can be a good way to earn extra money. It doesn’t make financial sense to work while on the maternity portion of the benefit, as your earnings will be deducted dollar for dollar from your benefits, unless you make significantly more than the benefits (after the cost of child care is deducted, if needed).
If you work while receiving maternity or parental benefits and have served your waiting period, you will be able to keep 50 cents of your EI benefits for every dollar you earn, up to 90 percent of the weekly insurable earnings used to calculate your EI benefit amount. This 90 percent amount is called the earnings threshold. If you earn any money above this threshold, we will deduct it dollar for dollar from your benefits.
Update 2018 : November 2018 EI Maternity and Parental Benefits
Check out Part 2 In this Series: Maternity and Parental Leave Part 2: Budgeting
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I’m all done with maternity leave but I will share with friends 🙂
Thanks Denise, I’m sure they will appreciate any education on the system! Cheers Mr.CBB
I’m all done with mat leave too. I had no idea you could work on parental leave! Wish I knew that! I don’t really have much financial advise to those on leave, but I did watch for sales and stock up on items I knew I was going to use (wipes, baby wash, diapers, etc).
That’s why its so important to share posts like this so others will be informed. That’s ok we had no idea as well. Cheers and thanks for your post Zayba.. Mr.CBB
Since starting my maternity leave we are actually doing better off financially thanks to smart shopping, couponing and not having to pay childcare for our oldest daughter. I am averaging about 50% in savings per month in household purchases.
That’s great news! Will you be going back to work or staying home after your mat leave? Mr.CBB
My tip is to call EI and ask for extra taxes to be taken off of your EI benefits. A few friends told me when they did their taxes the year after mat leave they owed a ton. I called a few months into my leave and had them take off extra. I was really nervous still when I had my taxes done a few months ago but I ended up getting over $1000 back!!!!
Mat leave can be tough. We saved for it but I ended up having him 7 weeks early so I missed out on 2 whole extra months of savings. I had 6 weeks of top-up available to me from my company as well. I ended up taking 7 extra weeks off unpaid at the end, 2 weeks due to a seasonal layoff and 5 weeks were, well that’s a long story but in the end I ran out of money but it was worth it to stay home that little bit longer!
Could you not simply take off those taxes yourself and put them into an RRSP? Maybe Sarah Can give us a bit more insight into this. Glad it turned out for you! Thanks for your comment and tips Jen! Mr.CBB
i was in school full time when i had my son and unemployed with my daughter but i found watching for good sales on the much needed supplies helped.. i chose to have cloth diapers my gran to save money and instead of wipes i kept a cloth in a baggy in the diaper bag to clean his bum this way i didnt hav to risk irritation and saved lots in that regard.. but always budget
Hi Jussie, Thanks for your comment. It’s amazing how much we have evolved when it comes to having a baby. Everything seems so commercialized and if you don’t do something this could happen etc etc. We all survived and made out well whether we had wipes or a cloth, diapers or cloth diapers… It’s a matter of choice and decision… thanks again! Cheers Mr.CBB
I had no idea you could work on parental leave. Great post! I would say save where you can while on mat leave, have yard sales, shop at good will etc… to save on money.
Hi Wendy,
I think I mentioned earlier we had no idea as well but it’s great information to be aware of. Thanks Mr.CBB
Boy mat leave has changed since my kids were born!!!! I was off 3 months with my oldest boy and 5 months with my daughter. Benefits ran out with my daughter but I stayed home an extra couple of weeks as it was mid August and I went back after Labour Day.