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How much does parental leave actually pay?

You will always remember the joy you felt welcoming your child into the world. You’ll remember the stress, too – and not just because your baby will keep you up at night. On top of all the changes your life will undergo as you adapt to parenthood, you’ll also be figuring out how to make everything work on a reduced income.

The good news is that you won’t be handling this stress alone. We’re here to help and we’ll start by answering explaining three Government of Canada programs that can supplement your income while you take time away from work to raise your new child:

1. What is maternity leave?

2. What is paternity leave?

3. What is parental leave?

Make sure to check out the appropriate Government of Canada websites when you’re ready to apply for these programs.

1. How much is maternity leave?

Before giving birth, and in the 15 weeks afterwards, mothers in Canada are granted paid “maternity” leave in order to take care of their new child. This benefit can also be extended when a child is adopted. Those eligible for maternity leave will receive from the Government benefits equal to 55% of their average weekly insurable income, for a weekly amount not exceeding $595.

Applicants are eligible for maternity leave if:

  • Your employment is insurable, which can be determined by whether EI premiums are deducted from your pay.
  • You have worked more than 600 hours of insurable income.
  • Your normal weekly earnings are reduced by 40% or more because of your pregnancy and/or need to stay home and take care of your newborn.

You can apply for maternity leave by visiting the Government of Canada’s website here.

2. How much is paternity leave?

All Canadian parents, since 2019, have been granted access to some form of leave in order to take care of their newborns or newly-adopted children – fathers included. The program works similarly to maternity leave, but with some crucial differences. Whereas mothers are given 15 weeks, fathers are given 5, within which fathers can be compensated for 55% of their weekly income up to $638 pre-tax.

Eligibility requirements for paternity leave are nearly identical, too, with applicants needing to show 600 hours of insurable income with earning reduced by 40% or more.

3. How much is parental leave?

While maternity and paternity leave can help new parents for 15 and 5 weeks respectively, most people would agree that more time away from work is needed to raise a child, especially in the critical first year of their life.

That’s why the Government of Canada provides two different kinds of parental leave available for either parent at a time:

  • Standard, which covers up to 40 weeks, with benefits equal to 55% of the average weekly insurable income for the parent enrolled in the program, for a maximum of $595 per week.
  • Extended, which covers up to 69 weeks, with benefits equal to 33% of the average weekly insurable income for the parent enrolled in the program, for a maximum of $357 per week.

Eligibility requirements for parental leave are based on the criteria used for maternity leave. You can apply for paternity and parental leave at the same link provided for maternity leave.

Speak with a Coast Advisor today

Despite the benefits the Government provides Canadian parents, the loss of income in your child’s first year can still be stressful.

Get yourself financially ready for parenthood when you speak with a Coast Capital Advisor at your nearest branch or by telephone at 1.888.517.7000.

 

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This article is provided for general information purposes only. It is not to be relied upon as financial, tax, or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, fees, and other investment factors are subject to change without notice and Cost Capital Savings Federal Credit Union is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and Coast Capital Savings Federal Credit Union does not guarantee accuracy or reliability of such sources. Readers should consult their own professional advisor for specific financial, investment, and tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.

 

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