In Ontario, maternity leave practices mirror those in many other provinces and territories across Canada, with the exception of Quebec, as they are governed by federal regulations. One of the appealing aspects of maternity and parental benefits in Canada is the possibility of receiving financial support for up to 18 months while you focus on childcare.
When you take maternity leave or parental leave in Ontario, your benefits are derived from Employment Insurance (EI), which covers up to 55% of your earnings, capping at $668 per week (effective January 1, 2024). Although these benefits are subject to taxation, many Canadians find relief in not having to rush back to work after just a few months due to financial pressures.
Understanding the intricacies of maternity leave in Canada is crucial, as not all individuals are eligible for EI benefits, and these aren’t automatically granted upon the birth of a child. Continue reading for a comprehensive overview of maternity leave in Ontario.
Ontario Maternity Leave vs. Parental Leave
A common source of confusion for new parents is the distinction between maternity leave and parental leave. They are indeed different types of leave, sharing similarities but also presenting key differences that impact the financial benefits you will receive.
Maternity Leave in Ontario
Maternity leave benefits specifically cater to individuals who are pregnant or have recently given birth, applicable to birth mothers only. Consequently, parents who are adopting or utilizing a surrogate do not qualify for maternity leave benefits.
You can receive up to 15 weeks of standard maternity leave benefits, and it’s important to note that these benefits cannot be shared between parents. However, you can apply for both maternity and parental benefits simultaneously as parental leave can follow maternity leave.
Parental Leave in Ontario
Parental leave, sometimes misidentified as paternity leave, applies to both parents of a newborn or newly adopted child. Parents can share these benefits but must decide between standard parental or extended parental benefits. When sharing, each parent must submit their application and choose the same benefits option.
Parents can take their parental leave concurrently or one after the other. Once you begin receiving parental benefits, you cannot switch options.
Standard parental benefits provide up to 40 weeks of support, although each parent is limited to a maximum of 35 weeks. New regulations introduced in 2019 permit parents to utilize 5 weeks of standard parental leave without impacting the spouse’s limit of 35 weeks, thus establishing a total benefit period of 40 weeks.
For extended parental leave, parents can receive benefits for up to 69 weeks, but each parent’s claim cannot exceed 61 weeks.
Both maternity and parental leave are protected under Ontario’s Employment Standards Act, which ensures that you cannot be denied these rights by your employer.
Eligibility for Maternity Leave in Ontario
To be eligible for maternity and parental leave benefits in Ontario, you must meet the following criteria:
- You are pregnant or have recently given birth when applying for maternity benefits.
- You are a parent with a newborn or newly adopted child when applying for parental benefits.
- Your weekly earnings must have decreased by more than 40% for at least one week.
- You must have worked for at least 600 insured hours within the 52 weeks prior to your application or since the last claim, whichever is shorter.
While these eligibility criteria are clear-cut, consulting with a Service Canada representative can provide additional clarification. Both part-time and full-time workers can qualify for maternity leave as long as they adhere to these requirements.
Upon returning to work from maternity leave, you must accumulate sufficient insured hours to qualify for future leave. There is no waiting period for eligibility to reapply; you can return for six months and subsequently apply for leave again, provided you meet the criteria.
For pregnant employees who experience a miscarriage or stillbirth after 17 weeks before the expected due date, maternity leave benefits are not applicable. However, if the loss occurs after that period, EI maternity benefits can still be claimed for time off.
Maternity Leave for Self-Employed Individuals in Ontario
Self-employed individuals can access maternity leave in Ontario, but they must register for EI special benefits for self-employed workers. Additionally, the following requirements must be met:
- At least 12 months must have elapsed since your registration.
- Your business activity must have decreased by over 40% for at least a week due to pregnancy, childbirth, or caring for a newborn or newly adopted child.
- You need to meet the minimum income threshold during the previous calendar year before applying for benefits.
With a valid social insurance number, you may qualify for maternity and parental benefits even if you’re not a Canadian citizen.
Maternity Leave Pay in Ontario
As of January 1, 2024, maternity leave pay in Ontario is set at 55% of your insurable earnings, capped at a maximum of $668 per week.
For parental leave, there are two payment structures. Standard parental benefits entitle you to 55% of your insurable earnings for a maximum of 40 weeks, but remember, no single parent can claim more than 35 weeks of these benefits.
In the case of extended parental leave, benefits amount to 33% of your insurable earnings for up to 69 weeks, translating to a maximum weekly benefit of $390. Each parent is limited to receiving no more than 61 weeks of parental benefits.
The maximum EI benefits are identical for both standard and extended parental options, simply distributed over different time frames of 35 or 61 weeks, based on your preference.
Generally, individuals who opt for standard parental benefits and return to work after 12 months often find that they have a higher total income than those who take extended leave.
Some employers provide a maternity or parental leave top-up, supplementing your income to boost earnings during leave. For instance, they may cover up to 80% of your salary, adding an extra 25% on top of the EI payment. Not all employers offer this, so it’s advisable to clarify your benefits with your employer.
Note that there is a one-week unpaid waiting period, which acts like a deductible. Furthermore, maternity and parental benefits are fully taxable, which will depend on your overall household income; however, most individuals will find their tax rate to be lower than usual.
How you utilize your benefits is entirely your choice. Common uses include covering everyday expenses, but savvy individuals might consider investing in high-interest savings accounts, RRSPs, TFSAs, or RESPs, with others opting to pay down debt.
How to Apply for Maternity Leave in Ontario
It’s essential to apply for maternity leave in Ontario as soon as you stop working. Delaying your application by more than four weeks post-discharge may result in a loss of some benefits.
The application process is designed to be straightforward. Follow these steps:
- Select your benefits option.
- Complete the online application form.
- Submit the required information.
- Wait to receive your benefit statement and access code by mail.
- Review your application for accuracy.
Once your application is approved, expect your first payment approximately four weeks after submission. If you’ve linked your banking information to your CRA account, the funds will be directly deposited; otherwise, a check will be mailed to you.
Unlike standard EI benefits, maternity and parental benefits can be received even when you are outside Canada. To ascertain the duration of your EI payments, consult your My Service Canada Account.
Important Considerations for Maternity Leave
Some employment benefits may involve maternity leave top-up, where your employer covers the shortfall between your EI benefits and your regular income. Taking full advantage of such offers is highly beneficial.
During your maternity leave, typical benefits like dental or pension contributions may not be available, but some organizations permit you to maintain those benefits at your expense, which could be worthwhile. Voluntary unpaid leave may also be available if extended time off is necessary, though it is at the employer’s discretion.
Consider acquiring life insurance now that you have a dependent. This is a prudent move to safeguard your loved ones should the unexpected occur. Affordable term life insurance options are available, making it a smart investment.
Closing Thoughts
Raising a child in Canada comes with significant financial responsibilities. Thankfully, various government programs offer assistance to eligible families. While maternity and parental benefits can ease some burdens, diligent financial management is crucial, as you may face substantial expenses in raising your child over the next two decades.