Ah, maternity leave. If you are pregnant or thinking about becoming pregnant and you live in Canada, this is a post is a must-read.

I remember when I was pregnant with my first son, I was so excited to go on mat leave. I felt so blessed to live in a country where I was guaranteed a year off from work (I hated my job, so I was really excited by the idea of being away from it for a year) and that I would actually still make some money not working (until I discovered that parenting is incredibly hard and that mat leave is a pittance for the amount of work I did).

I also soon discovered that its actually all quite complicated. I had a lot of questions from the most important (how much money will I actually get) to practical (how to I actually get it). To make this user friendly, I’ve decided to do this in a question/answer format.

However, I do want to preface this by saying that this is MY experience and that while I do reference the Service Canada website, I am human –  I may interpret some things incorrectly or they may not apply to your situation. PLEASE always confirm and verify everything with Service Canada before you act! I hope this post gives you a good idea where to start and the types of questions to ask, but in the end, the ultimate responsibility is yours.

Now that the legal mumbojumbo is done, here are some questions to ask about maternity leave.

1. What is maternity leave?

2. How much are maternity leave benefits?

3. Am I eligible for maternity leave benefits?

4. Can I work while on maternity leave?

5. How do I apply for maternity leave benefits?

6. What else should I know about maternity leave?

1. What is maternity leave?

Maternity leave is a period of time that all employers in Canada HAVE to give you – they legally have to hold your job or one of equal status and pay for you for up to a year – so that you can take care of your newborn baby or adopted child.

In Canada, when women take maternity leave they are entitled to certain benefits, which fall under the Employment Insurance (EI) program. It is a monetary benefit that you can claim when you are pregnant, have recently given birth, are adopting a child or taking care of a newborn. This is a benefit that is provided at the federal level for all provinces except for Quebec, which has its own maternity/parental leave program. I only discuss the former.

The monetary benefit is broken up into two parts: Maternity Leave and Parental Leave.

Maternity Leave benefits are paid for a maximum of 15 weeks and only to biological mothers, including surrogate mothers, who cannot work because they are pregnant or have recently given birth. The 15 weeks can start as early as eight weeks before the expected date of birth, and can end as late as 17 weeks after the actual date of birth.

Parental Leave benefits are paid for a maximum of 35 weeks and can be taken by biological or adoptive parents.

So this means that only the biological mother can claim the first 15 weeks of leave benefits but either the mother or the father/other parent can claim the parental leave benefits. The mother can, of course, take all 35 weeks of the parental leave, which combined with the 15 weeks of maternity leave is what makes that 52 weeks or year that everyone talks about.

Things to note about the 35 weeks:

• Both maternity and parental benefits are the same even if you have multiple births (like twins) or adopt more than one child at a time. So you don’t get any added benefit for having more babies (sucks, I know since its that much more expensive).
• If one spouse decides to return to work after taking a few weeks of parental leave, but then realizes a few weeks later that he or she would prefer to stay home with the child, he or she is still entitled to the unused weeks of parental benefits, as long as the 52-week period after the birth or adoption placement has not expired.
• Like I said, the mother can take the entire 35 weeks or can share any portion with the father.
• Both parents CAN take the leave at the same time (which we actually considered by realized we couldn’t afford).
• If your newborn or newly adopted child is hospitalized, the 35-week timeframe can be extended by the number of weeks your child is in the hospital

2. How much are maternity leave benefits?

Honestly, not that much. I think many people are unpleasantly surprised by how little they actually are.

Ok, here we go. If you are eligible to claim them (see below where I discuss eligibility), the basic rate for calculating EI benefits is 55% of your average insurable weekly earnings, up to a maximum amount. As of January 1, 2014, the maximum yearly insurable earnings amount is $48,600. This means that you can receive a maximum amount of $514 per week which works out to about $2,227 per month. This amount, though, is taxable, so the net amount is actually less (and this depends on the province you live in). For example, for Ontario, that would be about $452 per week or $1,958 per month. I like this website for helping figure out the net amount. Remember to put in 55% of your gross annual income, so if you make $48,600 or more per year that would be $26,730 for the purposes of calculating your benefit.

Now, this is the MAXIMUM. If you earn less than $48,600 per year then you need to do the math. This might also be the case when, although your salary is over $48,600, you actually earned less in the 52 weeks before you go on leave.

So say you earned $40,000 in the 52 weeks before you go on mat leave, the calculation would be as follows:

$40,000 x 55% = $22,000 per year

$22,000/52 weeks = $423 per week less tax based on the province you live in.

The only exception is if you qualify as a low income family – i.e. your net family income is less than $25,921. In that case you can get an EI supplement based on your income and the number of children you have.

Also, just a quick note – usually the maximum salary amount is increased each year. However, the benefit you get is based on the year you give birth and doesn’t change if you leave takes place in two calendar years. So for example, if you had your baby in December 2013 and qualify for the maximum benefit, you will receive a slightly lower benefit amount than someone who gave birth in January 2014. Its not going to be a huge amount, but its something to keep in mind when making your mat leave budget.

3. Am I eligible for Maternity Leave & Parental Leave Benefits?

In order to qualify for Maternity Leave and Parental Leave there are some requirements you have to meet.

1. You are employed in insurable employment and have been paying your EI premiums (this is usually deducted straight from your pay cheque). So, if you are a stay-at-home mom or have job where you don’t pay EI, you won’t get it.
2. You are the biological mother (for Maternity Leave Benefits) and biological or adoptive parents (for Parental Leave Benefits). So this excludes, for example, grandparents, if they wanted to take leave from their jobs to care for your baby.
3. Your normal earnings are reduced by 40% or more due to having to care for your baby or adoptive child.
4. You have accumulated at least 600 of insurable employment over the past 52 weeks before going on leave or since your last EI claim (say you were unemployed and claiming EI 6 months before you went on leave), whichever is less.

4. Can I earn money while on Maternity Leave?

The answer to this question is: yes and no.

While you are receiving Maternity Leave benefits (i.e. the first 15 weeks that can be only taken by the biological mother), the government will deduct the entire amount you earn dollar for dollar from your benefits.

While you are receiving Parental Leave  benefits, you can earn up to $50 per week or 25% of your weekly benefit, whichever is higher. The government will deduct any money earned above that amount dollar for dollar from your benefits.

Its a bit of a pain though, because if you do earn income while on leave, you need to fill out a report every 2 weeks detailing how much you made. So say you selling something on the side, like Arbonne or Mary Kay, you need to figure out an approximate profit for that period (and profit is NOT the same as commissions). Its easier if you work somewhere and get paid by the hour, but its still annoying to have to fill out that report.

This is a topic which really annoys me. No, not because I think its a “precious time to be with your baby and how could you think about working” but because I wish the government would let parents supplement their income while on leave without being penalized for it. I know the point of the benefit is to help parents financially so they can care for their baby but there are many ways to be able to care for your baby most of the time and still make some money on the side. A family’s expenses don’t go down when they have a baby – if anything, they go up. And there are so many side jobs one can have to earn a bit extra to help maintain a certain standard of living or avoid  going into debt that can be done all while maintaining excellent care over the baby. But the government seems to be taking note of this and have launched a Working While You Claim project which will allow people to earn a bit more income while claiming EI benefits (of which Parental Benefits, but not Maternity Benefits, will be included).

I will do a post on working while on mat leave though. I think there are creative ways to earn some income and still take advantage of being on maternity leave.

Also, please note that there are certain types of income that don’t affect your maternity and parental leave benefits, such as disability benefits, employer top-ups and others which can be found on the Service Canada website.

5. How do I apply for Maternity & Parental Leave benefits?

You apply for both Maternity & Parental Leave benefits online. You can find everything you need to know here.

Just remember, this is a government program and so of course it takes time and requires a lot of information and documents. Check out the link above to make sure you have everything you need ready to go so you aren’t scrambling for it while trying to deal with the sleep deprivation you will have while taking care of a newborn.

6. What else should I know about maternity leave?

I’ve touched on the most important parts of maternity leave benefits that are provided by the government. But there are a few more things to consider regarding maternity leave.

• Employer top-ups. Your company can give you a top-up (an amount over an above your EI benefit amount) that does not reduce your benefit. While this can be an amazing benefit, make sure to read the fine print. Many companies that offer this benefit often obligate you to return to work after you maternity leave for a specific period of time. For example, the firm where I worked topped up my salary to 100% of my salary for 17 weeks, but I was obligated to work for them for a full year after my leave or be required to pay back the top-up on a pro-rated basis. If you don’t plan to return to your old job (whether it is because you decided to stay at home with your child or simply get a different job), keep this in mind.
• You can continue to receive maternity and parental benefits even if you leave Canada – this is different from regular EI benefits. This is good to know as many people like to take the opportunity to visit family and friends abroad during their leave.
• If you don’t want to share you 35 Parental Leave with your partner, they can still take up to 35 weeks of unpaid Parental Leave and be covered by the same laws as you regarding job security. This may be an option for those who want their partner or spouse to take some time off to be with the baby, but don’t have enough vacation time or don’t want to use it.
• While you are entitled to take a year, don’t feel you have to or feel bad if you can’t. Realistically, not everyone can afford to have their income so drastically reduced for such a long time and not all parents want to be off work for that long. I, personally, hated my job when I went on leave, so for me it was a great escape and took 11 months with my first son. If I had loved it, I probably would have taken less. Its a choice you have to make together with your spouse or partner and don’t let anyone make you feel bad about it. I will also do a post on tips on how to be able to afford your maternity leave and how best to prepare for it.

 For complete information on Maternity and Parental Leave Benefits, visit the Service Canada Website.