Having a child or becoming a new parent can mean a lot of new challenges and experiences. It can also mean some drastic financial changes, like supporting another human being by feeding and dressing them and adjusting to a new life on a different income.
If you go on parental leave in Canada, here’s exactly what you can expect, from the application process to the benefits you’re eligible to receive.
How Do Maternity Leave and Parental Leave Work?
Maternity and parental leave both have different benefits and requirements. Maternity benefits are only available to the person who gives birth and cannot be shared between two parents. Parental benefits are available to both parents and those of newly adopted children.
Your options for the type of parental leave you take are as follows:
- Standard parental leave of 52 weeks or 12 months
- Extended parental leave of 78 weeks or 18 months
Whichever option you choose will impact the amount of financial support you will receive each week. If you decide to split parental leave with your partner, you must each submit a separate application and receive your benefits simultaneously or at different times. You can apply for leave together and select your individual length of leave.
Once you decide between standard or extended parental leave and begin to receive benefits, you cannot change to the other option.
There are also some other essential factors to consider before you apply for maternity or parental leave. If you were on Employment Insurance (EI) benefits over the past year, you may not be eligible to receive the full benefits of maternity or parental leave. But, if you have since worked 600 hours, you may still have the option to make a claim. You need to have worked those 600 hours over 52-weeks leading up to your leave. It’s best to contact Canada Revenue Agency (CRA) to confirm.
If you choose to leave work early, you can receive maternity leave benefits up to 12 weeks before your child’s due date. Maternity benefits do not go past 15 weeks after giving birth. After 15 weeks, you can receive parental benefits. Therefore, if you take leave earlier, you will be back to work earlier, as the 12 weeks before birth count towards your 15 weeks of maternity leave.
Who Qualifies for Parental Leave?
“Parental leave is available to individuals who are caring for a newborn or newly adopted child,” says financial planner Steven Arnott.
A more thorough list of qualifications to apply for parental leave include:
- Being pregnant or have recently given birth
- Be a parent who is currently caring for a newborn or newly adopted child
- See your regularly weekly earnings decreased by 40% each week
- Prove you have accumulated 600 hours of work in the 52 weeks before you open a claim
“The definition of who can take an unpaid leave from work is simple, but the length of time and how much replacement income you’ll receive will vary depending on your circumstances,” says Arnott.
Please keep in mind that some qualifications for maternity and parental leave benefits have been adjusted to support Canadians through COVID-19. You can view a list of these adjustments on the Canadian government website.
How Much Money Will You Get While on Maternity and Parental Leave?
The length of your leave and the regular income you earn at your job before going on leave impact the amount of money you will receive from the government.
As of 2021, maternity and standard (12 months) parental leave is a benefit of up to 55% of your average insurable weekly earnings to a maximum of $595 each week. Therefore, the maximum yearly insurable earnings are $56,300 per year.
This means that if you earn $56,300 or more as your annual salary, the most you can receive is $595 per week. If you earn less than $56,300, you will receive up to 55% of your yearly earnings.
For the extended parental benefits, the rate is 33% of average insurable weekly earnings, up to a maximum amount. Again, the maximum yearly insurable earnings are $56,300 per year. In 2021, the full amount for extended parental benefits is $357 a week.
How to Apply for Parental Leave (And When)
When you apply for leave, make sure that you apply the day after you stop working. Waiting more than four weeks after your last day of work can put you at risk of losing benefits. If you’re ever unsure, it’s not a bad idea to contact CRA to confirm your eligibility. There are four steps to completing your online application.
Step #1. Choose which benefits you’re applying for – maternity, parental or both.
Step #2. Complete the online application – but make sure you have everything you need on hand. You will need the following information to complete the application, which can take up to an hour.
- Your employer information from the last 52 weeks (names and addresses)
- Your dates of employment
- A detailed explanation if you quit or were dismissed in the past 52 weeks
- Your mailing address and home address
- Your social insurance number (SIN)
- The SIN of a parent you may share benefits with
- Your mother’s maiden name
- The expected due date for your child
- Any adoption information
- Your banking information to sign up for a direct deposit
Step #3. Wait to receive your benefit statement and access code by mail. This access code will help you review your application status.
Step #4. Check the status of your application after you receive your code.
What Other Benefits Are Available to New Parents?
In addition to the maternity and parental leave benefits, there are also other benefits that you should look into. “Whether you’ve had a chance to save ahead of time or not, you’ll want to make sure you’ve applied for all of the benefits available to you,” says Arnott.
He says another benefit for families raising children under the age of 18 is the Canada Child Benefit (CCB). The CCB is a tax-free monthly payment for anyone who qualifies. The conditions include living with a child under the age of 18, you must be the primary provider for your child, and lastly, you must be one of the following for tax purposes: a resident of Canada, Canadian citizen, permanent resident, protected person, temporary resident or Indigenous person.
Another option to consider is to ask your employer what type of financial assistance they might provide while on leave. Arnott says reaching out to your human resources department or manager can be a part of your preparation for leave.
“You’ll need to coordinate the timing of your leave and likely help with any transition of work while you’re away,” says Arnott. “Outlining that you’re looking to take the right amount of time off for you and your family while returning to work without financial distress should help position your ask if there is any hesitation.”
Does Parental Leave Vary Between Provinces?
Something essential to research before you go on leave is the different types of support available to you based on where you live. As each province has various regulations surrounding leaves, it’s best to check your government site to confirm the current standards.
- Alberta
- British Columbia
- Manitoba
- New Brunswick
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Nunavut
- Ontario
- Prince Edward Island
- Quebec
- Saskatchewan
- Yukon
“If this is your first child, I’d encourage you to reach out to other recent parents in your community or network to learn from their experience,” says Arnott. “From ways to lower costs to must-have items to keep your sanity, it will help to hear what has and hasn’t worked for others.”
