Being Canadian, we are super lucky to be able to take advantage of a paid parental leave program. While the system may not be perfect, over time it has changed and improved to try to meet the needs of more Canadians. The most recent change was the introduction of the option to take an 18 month leave. Figuring out what’s best for your family can be overwhelming. Here are some things to consider when making your decision.
A few months after my daughter was born, the Canadian government opened up the option for an 18 month parental leave, rather than the previously allotted 12 months. Since December 3, 2017, parents have had the option to spend more time at home while receiving benefits. While staying home with your new babe is an appealing option for many new parents, there are some important things to consider when weighing the options of whether to take extended parental leave.
Determining how much you will actually make in both benefits scenarios is an essential first step. There are a number of costs associated with starting a family, and adding unnecessary financial stress is undoubtedly something you want to avoid.
With a 12 month parental leave (also known as Standard Parental Benefits), the biological mom or surrogate receives 15 weeks of maternity leave benefits paid at 55% of your weekly average earnings, up to $562/week. Following the initial 15 week maternity leave, either parent or caregiver can claim up to 35 weeks of parental leave at 55% of their earnings (again, up to $562/week).
In the Extended Parental Benefits 18 month model, the initial 15 weeks maternity leave remains the same; 55% of your salary up to $562/week. Following that, parents or caregivers receive 33% of their salary for up to 61 weeks, to a maximum of $337/week (which can be increased if you qualify for the Family Supplement).
The Family Supplement can increase your benefit rate to as much as 80% of your earnings. You may qualify if your net family income is under $25,921, you have kids, and are receiving the Canada Child Benefit.
Based on these numbers, a mother receiving the maximum amount of EI, will received $28,100 over the span of 12 months or $28,987 over 18 months. In other words, if you opt to take an 18 month parental leave, you will receive $225 less per week at maximum earnings than with the 12 month option.
How Early Can You Apply for Benefits?
You can apply for benefits as early as 12 weeks before your due date or the actual week you give birth. If you need to go off work earlier due to illness, you may qualify for Sick Leave. In order to qualify for Sick Leave, you need a medical certificate signed by your doctor.
While you may be earning less monthly with Extended Parental Benefits, there are other important financial factors to take into consideration. One of the biggest costs to factor in when deciding when to go back to work is daycare costs. A 2017 study indicated that childcare costs for an infant in Toronto (typically classified as a child under 2 years old) are an average of $1758, which easily outweighs the difference in earnings between the Standard Parental Benefits and Extended Parental Benefits. If staying home for an additional six months means you could pull an older sibling out of childcare in addition to being home with the new baby, the savings in childcare could make taking an 18 month parental leave well worth it financially.
When is it Right to Go Back to Work?
While I didn’t have the option to choose extended parental benefits because my daughter was born before it was implemented, I would have found the decision very difficult had I had the option. On the one hand, so many milestones happen in your baby’s life between 12 and 18 months—walking, talking, independent play and a number of others. While you can still make the most of this exciting time during evenings and weekends, it’s hard to replace the quality time you get when you’re home during the day.
That said, by the time my 12 month maternity leave was over, I was really looking forward to going back to work. A year is a long time to be away, and depending on your profession, a lot can change at work during that time. Had I taken longer, I may have found it harder to transition back to work or felt like I was losing my skills.
While there are pros and cons to both options, it is important to weigh both the financial and personal reasons for your family and do what makes the most sense for your situation. Whichever option you opt for, don’t forget to get organized before baby comes so you can apply for benefits as soon as you’re done work. Gather all records of employment from employers over the last 52 weeks as well as your SIN number and banking information. You can apply for benefits online on Service Canada’s Website.
*Opinions expressed are those of the author, and not necessarily those of Parent Life Network or their partners.