Money matters during maternity leave

Bringing it in…

You’re convinced you
can handle the sleepless
nights and endless monotony
of diaper changes
and spit-up. But are you
certain your bank account
can survive a year on a
reduced income?

If you’ve worked a minimum
of 600 insurable
hours in the year before
applying for Employment
Insurance benefi ts, you
qualify to receive 50 weeks
of paid leave, part of which
can be shared with dad.
(See chart below.) Often referred
to as maternity leave,
the year is actually split
into maternity leave and
parental leave, both with
their own set of rules. A
year off with pay sounds
like a sweet deal, no?

Well, maybe not. As
Airdrie, Alta. mom Shirley
Saputra discovered,
her weekly cheque didn’t
measure up to her regular
salary, and making ends
meet was a struggle.

“As the sole earner, we
couldn’t survive on my
EI benefits alone. I was
lucky enough to have an
employer that let me work
from home, and after a
brief period on maternity
leave, I went back to work
and my full salary.”

Live in la belle province?
Quebec’s parental benefi ts are
run independently through
the Quebec Parental Insurance
Program. More information
on this program can be
found at rqap.gouv.qc.ca.

…And shelling it out

Shop on auto-pilot and your
baby’s fi rst year of life could be
more expensive than their first
year of university.

Bums and bottles bust
budgets. Generic diapers cost
at least $280 for the first year
alone; a basic cloth diapering
kit can cost as little as $135 and
can be used for subsequent
children but takes time. Formula
will set you back about
$50 to $200 a month, depending
on the brand. Breastfeeding
can be free without pumps
and nursing wear, but if you
decide they’re necessary, shop
around for the best price.

Buy used whenever possible.
Your baby doesn’t care
if their vibrating chair was
bought new or used, so neither
should you. For safety’s sake,
buy cribs and car seats new
to ensure they haven’t been
recalled, or in the case of car
seats, been involved in an
accident. Most everything
else can safely be purchased
through consignment stores or
other parents, including clothing,
toys, books, high chairs
and exersaucers. Visit Health
Canada online at hc-sc.gc.ca to
check your equipment for recalls
– even new products can
sometimes remain on the shelf
after a recall has been issued.
Paying full retail for items that
will be used for just months, or
worn for mere weeks, will kill
your budget.

Avoid the mall at all costs.
Skip window shopping that
inevitably turns into impulse
buying, and join a local parenting
group for your socialization
(and your baby’s). Most
communities have free mom
and tot groups where you can
connect with other moms without
shelling out for expensive
classes.

The chart below provides a breakdown of which parent qualifies for each leave, and how much they’ll receive. Did you know you can earn some income while on leave without sacrificing your EI payments? That’s included in the chart, too.

Type of leave Qualifying period  Waiting period  Payment  Length of benefit  Earning extra income 
Maternity (exclusive to biological mother who has given birth) You must have 600 hours of insurable employment on which you paid EI premiums during the 52-week period immediately before the start date of your EI period. There is a two-week waiting period for which benefits will not be paid (think of it like a deductible).  55% of your average insurable weekly earnings, up to a maximum of $44,200. That’s $468 per week, or $24,310 annually. This amount is taxable.  15 weeks Earnings must be reported, and will be deducted dollar for dollar from your benefits. 
Parental (shared by mom or dad, biological or adoptive) You must have 600 hours of insurable employment on which you paid EI premiums during the 52-week period immediately before the start date of your EI period. See above. There is a two-week waiting period only if the two-week maternity waiting period has not been served. 55% of your average insurable weekly earnings, up to a maximum of $44,200. That’s $468 per week, or $24,310 annually. This amount is taxable.  15 weeks  You can earn $75 per week or 40% of your weekly benefit, whichever is higher. Earnings must be reported, and anything over the amount outlined above will be deducted dollar for dollar from your benefits. 

Sarah Deveau is the author of
Money Smart Mom: Financially
Fit Parenting (2010) and writes
for newspapers and magazines
across Canada. She blogs at
moneysmartmom.ca.

Originally published in ParentsCanada: Me & Mom, October 2012.

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