Should I take 12 or 18 months Maternity Leave?

40 weeks pregnant with baby 3.0

Just after I took maternity leave with my last baby, the government of Canada began to allow families to take up to 18 months of paid leave rather than the 12 previously. Great news right? Definitely for the additional job protection this provides women wanting longer leaves. Financially, I don't think it's worth taking the extended leave option provided by the governement. I'll explain below.

But before we get too far ahead of ourselves lets get some terms down.

Maternity leave: available only for the person giving birth for a total of 18 weeks. 

Parental leave: available for the parent staying home with the baby for a total of 35 for standard parental benefits or 61 weeks for extended parental leave.

So how do the new programs work out financially?

From what I gather from the program, (please do your own research to confirm) is that the maternity benefits portion remains the same and 55% of your salary (to a max earnings of  $53 100) therefore a maximum of $562/week is provided for the maternity leave portion.

This works out to a maximum of $10 116.

The government now allows us to extend the leave out to 18 months total, but all they have really done is decreased the payment amount each week to 33% per week rather than 55%.

So, based on the maximum benefits, if you take 35 weeks parental leave (working out to 1 year if the mother takes both leaves) you'd get: $19 670.

If you take the 61 weeks (working out to 18 months) you'd get  $337 per week for a total of $20 557

See the Government of Canada's page for more details.

So overall you basically get the same amount from the government whether you take 12 or 18 months ($900 more if you take the 18 month leave). However if you want to take a longer leave, I would suggest requesting the 18 months from your employer, but only taking 12 months worth of payments from the government. The reason is you are not allowed to earn income while on maternity leave or your benefits are clawed back.

Should you need or want to earn a bit more income than maternity leave provides, you have a lot more flexibility if you take the 12 month payment option. Once the payments from the government are done, you could start working at another job that fits your lifestyle for the remaining 6 months your main employer is required to give you by law. If you did this while still receiving government payments they will take back 50 cents of EI benefits for every dollar earned, up to 90 % of the benefits. See the official info here.

If you still feel like you need the monthly cash flow that the 18 month leave option grants you, keep $337 in your account each week and transfer the remaining $225 to a savings account and then you'll have the remaining 6 months saved up keeping the flexibility to earn some money at this point.

From my personal experience what leave you take from your employer versus what you receive in benefits from the government are not linked, so you have the freedom to separate these two. You definitely have more potential earning opportunities if you take the shorter leave. Make sure you do your own research for your particular situation first though!


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