Maternity Leave

Surviving A Lower Income On Maternity Leave In Canada



Most parents-to-be struggle with the thought of living on a lowered income or some put off having a baby altogether for fear they can’t afford a child. I survived two pregnancies and two maternity leaves and made it through the after baby financial changes to our net income. I also have to mention that my marriage survived as well. You are laughing??

Just imagine, in a matter of seconds, you have more expenses and a lower-income. I am not going to lie, this is probably going to be the hardest thing you have done in your life. Lack of sleep, no time to eat or take a shower, not to mention the financial worries but I am proud to add, an enormous sense of accomplishment.

I like to think that the worst is now behind me. There are so many things I wish I knew before I had kids but here I am now and I will share with you some of my precious findings. Here are some tips on how to enjoy parenthood instead of worrying about your finances and your sanity.

What are EI parental benefits?

EI parental benefits are offered to parents who are caring for a newborn or newly adopted child. A maximum of 35 weeks of parental benefits is available to biological, adoptive, or legally recognized parents. The two parents can share these 35 weeks of benefits. A person recognized as the child’s legal parent on the provincial or territorial birth certificate may be eligible to receive parental benefits.


How much money will you get on Maternity Leave?


While on maternity leave and parental leave, the basic benefit rate is 55 percent of your average insured earnings which currently as of January 1, 2012 the maximum is $45,900 yearly. This means you can receive up to a maximum of $485 per week. Some parents work for companies that top up their salaries paying the difference between the maternity benefit and their normal salary.

As of January 1, 2017, the maximum yearly insurable earnings amount is $51,300. This means that you can receive a maximum amount of $543 per week.

Related: Maternity Leave In Canada Part 1 The Basics

Update 2017:

If you are employed in insurable employment, your employer will deduct the applicable EI premiums from your wages or salary. There is no minimum or maximum age for paying EI premiums.

You need to pay EI premiums on all your earnings up to a maximum amount. In 2017, for every $100 you earn, your employer will deduct $1.63, until your annual earnings reach the maximum yearly insurable amount of $51,300. The maximum amount of premiums to be paid in 2017 is therefore $836.19.

Since Quebec has its own program that offers maternity, paternity, and parental benefits, the Government of Canada has adjusted the premiums accordingly for that province. In 2017, the premium rate for workers in Quebec is set at $1.27 for every $100 of earnings, up to a maximum amount of $651.51 for the year.

Please Note: Policies and financial figures above can change often.- Source

Can I make money while on maternity leave?

Yes you can also make money while on maternity leave by selling items, working part-time, starting a blog or website, babysitting etc.


Related: Making Money On Parental Leave in Canada


Start Saving Money


Couponing is for everyone-Just like for everything else, when you want to save money there are many things you can do. The obvious one for my fans is couponing. You cannot imagine how much money you can save until you try it. It is just plain ridiculous!

I still come from shopping shaking my head. If I only knew about couponing BEFORE I had my children. So, a word of advice, get started now! There is a huge community of money-saving Canadians who use coupons and who will welcome you anywhere you go. Everybody can do it!


Related: Where to find coupons in Canada


Cut back on Extras and Start Budgeting


Another very helpful way to save money is to cut back on the extras and know where your money is going. Have a good look at your expenses and determine what you can live without for now and for the long-term. Perhaps you could cut down on your pit stops to the coffee shop, cafeteria or remove your premium cable.

Related: Maternity Leave Part 2: Budgeting
You should decide between what you “need” and what you “want” to stick to the budget. Have you ever done the math to see how much you spend in the budget by eating out and buying coffee? You will be amazed at how much you can save in one simple step-eliminate or decrease this expense.


Get Energy and water smart


Now I am not saying not to flush your toilet anymore, but to stop watering your driveway and to turn off lights when you don’t need them. My favourite way to save electricity is to use my appliances off-peak. Most electricity providers offer lower rates during off-peak electricity times especially with the new smart meters. Off peak electricity is provided during set times and is typically between 19h00 and 07h00. I save around $60 dollars every month that way.


Stop Hoarding


A very nice way to put some money aside to survive on your lower-income is to make room for your baby. Yes, it is time to sell everything you have kept for no reason. The bigger the house the more useless stuff we keep. Make room for the mountain of baby clothes and toys that are coming your way.

Maternity leave doesn’t have to be a scary time as long as you plan and think about where you want to be financially in your life. Take away all the “wants” and fill them with “needs” and surviving maternity leave will become less of a burden on your finances and your well-being.


Related: Do you have job security while on Maternity leave?


Discussion Question: What are some other ways mother’s can survive maternity leave on a lower-income?
Contribution Post: Very special thanks to Mr. Canadian Budget Binder who gave me the opportunity to share with you what I have learned and how I survived a lower-income while on maternity leave. Flying Couponer.

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  1. I just stumbled on this post and there are some great pointers. I think you should feel relatively okay with your finances before bringing kids into the world, however, for women especially time is a factor. The later you wait, the harder it is to conceive. Then you are spending more money and time of fertility clinics and drugs.
    We do have it pretty good in Canada, whether your company tops up or not. Compared to the United States it is possible to get somewhat by on one income as the other person is on mat leave. At a minimum you will come out in a years time with less debt then the alternative.
    Great post

  2. This is a great article but can I suggest another post regarding “end of parental leave”? New parents looking to go on EI should be aware of the issues associated. It took me 4 months to get my first EI payment with many visits to their office, hours on hold and escalated files. I luckily had a savings for my bills and mortgage but it was difficult for a while. Things do not move quickly.

    Also, the tax deducted while on EI is not enough and parents should plan to take a huge hit next tax season and prepare by putting aside money each month. A savings of $2000 should be added to budget.

    1. Interesting…. we don’t have any kids yet but it’s certainly something we need to look into. If you are interested in sharing your story and numbers I’d love to share it as a blog post for the fans. It’s always nice to hear personal stories for other fans to relate to. Email me. 🙂 Mr.CBB

  3. I am 34 weeks pregnant. While speaking with an agent about maternity benefits today, I found out that they now deduct every penny you make working part time during leave from your benefits. You used to be able to make a bit before deductions. So working part time is really no longer an option unless you want to work for nothing

  4. Hello Diane,

    This is a great post and I think that people really have to consider finances when they have a child on the way. As a former financial advisor I’ve seen many instances where people weren’t prepared when it came to some of life’s major events. When I got married, my wife and I attended marriage classes every Wednesday night for a little over a month and found it pretty interesting that one of the classes was dedicated to personal finances. The lecturer spoke about a range of topics like joint accounts, spending habits, warned us all about how hard it was to get a new mortgage and how we better set up a strict savings plan. Are there any programs out there that do the same for expecting parents? Maybe there should be. In the meantime, I just wanted to point out that TD has some pretty good advice at


  5. I made it through my summer lay off (the same pay through EI as maternity leave) and made it through better financially then I am back at work. Daycare costs, gas, etc really take a toll on my budget. I am not worried about my finances next time I’m on mat leave….I’m worried about my finances when I go back and have two kids in daycare :-S

  6. I couldn’t imagine living on half my income but I’ve done it before so I can do it again I’m sure, when on mat leave. On parental leave, we get top up just like Bridget. But that starts on parental leave.

    1. My sister in law who makes almost 100k a year hates it.. she says it’s misery but that’s what you get when you only max at $485 and your employer doesn’t top up. If you have the time to plan the pregnancy and prepare all the necessities at a great price it helps she says. I have a great guest post coming up this week that you will like. Cheers Daisy! Mr.CBB

  7. Good post. I have a friend off on maternity leave right now, and she is definitely learning the important of a budget!

    1. Budgeting and Mat leave is so important. I have a guest post by Sarah Deveau on the blog where she talks about budgeting. Aside from mat leave it should be a part of everyone’s life. Cheers Cat! Mr.CBB

  8. My wife and I just had our third child recently and my belief is gets easier to an extent. With 3 kids we already no what to expect as far as sleep, and no time for anything else, but when it comes to the financial end of things it’s seems to be different almost every time.

    For example, with our last child we faced some insurance issues were the hospital was in the process of discontinuing are health insurance right before we were about to have a baby. With out any coverage we would have had to pay everything out of pocket. Luckily, we were in the coverage window were if we were pregnant for at least 4 months or greater the hospital would still cover us. In the end it all worked out luckily.

    Anyways thanks for all the great advice.

    1. I guess that would be true, you already know what to expect. You also likely have so much stuff you wouldn’t have to buy too many baby items and can use hand me downs from your other children. Cheers and thanks for dropping in mate. Mr.CBB

  9. I’m living this right now. It’s true Canada has a pretty sweet system going on with a combined 52 weeks between maternity and parental leave but like I’ve said before, my beef is with the max on the 55%. I contribute to EI based on my salary and I don’t agree with the max, 485 isn’t even close to 55% of my weekly income…I guess I shouldn’t complain, I have the option of being off for a year with my baby and can’t put a dollar value on that. I will add to your guest post that if you get put off work early because of pregnancy symptoms, your maternity leave doesn’t start until baby is born, your entitled to ‘sick’ pay EI should your MD put you off.

  10. A good read with some good ideas. One thing I’ve read elsewhere is to figure out what the budget will be on Mat Leave well ahead of time and then live on that amount for a while to see how it will go. This way you’re already working with the lower amount so it’s not quite as much of a shock to the bank balance. This would work too for a family looking to get by on one income for what ever reason. Live with the reduced amount ahead of time, you can save the extra money for emergencies, or what ever….

  11. Great post. It sounds like you have a pretty nice setup in Canada. Here in the States you’re not allowed to make money while on Short Term Leave, regardless of the reason. Being a parent myself, I and my wife have used many of these points. I think discpline is key and sticking to your plan to help you stretch your budget.

      1. Typically it’s between 50-60%. My wife was able to get 60% on our last child as she had been with the same company for ten years. Typically the max amount of time you can get is six weeks. After that you have to take sick or vacation time to total, at the end, of a max of 12 weeks off.

  12. Good post. I think that even though you have to make the adjustment to a lower income, Canada still has a pretty good system when compared to other places. I have no plans to have children anytime soon but I looked at my maternity leave benefits from my employer as I’m reading this post… looks like I receive the full year with top-up of my salary, and guarantee to return to my same or similar position when it’s finished. Right on.

  13. I like that you mentioned people waiting to have kids because of finances. There is never going to be the perfect time to have kids, but it’s something you just can’t wait on, because before you know it it could be too late.

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