Get finances in order for parental leave

family wealth management

Get finances in order for parental leave

family wealth management

You and your partner are expecting. Congratulations! As your mind begins to wander to all things baby-related, you also need to plan to take time off work.

Aside from alerting your manager and Human Resources department, think about how you’ll afford the time off. Consider that your expenses will be higher since you’ll have an extra person to feed and clothe.

Fortunately, Canada offers one of the best Employment Insurance (EI) programs for mothers and fathers (see “Parental leave elsewhere,” below). Mothers are eligible for a total 50 weeks of paid EI. Here’s how it breaks down.

If you’re the biological or surrogate mother of the newborn, you’re first eligible for up to 15 weeks of EI maternal leave, which can start as early as 12 weeks before the due date, and end as late as 17 weeks after the birth.

Then, new parents are eligible for up to 35 weeks of standard EI parental benefits at a weekly benefit rate of 55% of your average weekly insurable earnings. There’s also an extended benefits option, which provides a maximum of 61 weeks of leave at a weekly benefit rate of 33% of your average weekly insurable earnings.

Also, two parents can share these benefits. For the standard benefits option, for instance, parent A can take 20 weeks of benefits. That leaves parent B to take the remaining 15 weeks. If the mother takes all the leave, that’s the full 50 weeks.

If you’re a new parent to an adopted child, you’re also eligible for the same benefits that fall under parental leave (35 weeks or 61 weeks).

If you’re self-employed, you need to have earned a minimum of $6,947 in 2017 to be eligible for EI special benefits, including parental leave. Click here for more.

The amount you receive from EI varies on your annual earnings, as well as the maximum insurable earnings that year, which is determined by the Government of Canada. As of January 2018, you can get a maximum benefit of $547 per week. If you take extended benefits, you’ll get 33% of your average insurable weekly earnings.

You must apply for these benefits no later than four weeks after the date you stop working, and can apply online or at a Service Canada Centre.

To read the remainder of this article from Advisor to Client, CLICK HERE. If you have any questions be sure to contact Harry Perler or David Olejnik