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Debbie McNamara

For the first time since the introduction of paid parental leave, the Canadian government is opting to extend the time qualifying young parents can stay at home. The current system allows for up to 15 weeks to be claimed under employment insurance and 35 parental benefits weeks, with a 55 percent replacement rate up to $51,300. 

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The Liberal government has introduced an 18-month leave, which will allow parents to spend an additional six months at home with their children. Is this a step in the right direction for new Canadian parents?

Why Is This Important?

As a parent, the last thing you want to do is go back to work before you and your baby are ready for this step. Staying home with your children for longer periods of time will have positive effects on you and your developing baby. An extra six months to spend with your little one will not only give you peace of mind but it will help your child with healthy cognitive and physical development. 

These benefits don’t just help your baby grow. They can save young parents money on daycare. The average cost of daycare in Toronto sets parents back $1,649 per month, equating to $19,788 each year. If your child is in daycare for three years, that’s a total of $59,364—that’s a cost many parents simply cannot pay. 

Aside from daycares being extremely expensive, they are also very hard to get into. There is currently only appropriate funding for one in every four children to attend daycare. If you’re looking to send your child to a reputable facility close to your home, the waiting lists can be quite long.

How Can I Qualify?

To qualify for the new parental leave benefits, you need to have worked 600 hours in the past year. For full-time employees, this should be no problem. A person who works a 30-hour week will complete these requirements in only 20 weeks. However, this does not take into account self-employed individuals. 

Self-employed parents must plan ahead if they want to take advantage of the new benefits. If you work for yourself, you’ll have to contribute to premiums in advance in order to qualify. It won’t just be self-employed parents who may not prosper from these benefits, however, as approximately 33 percent of families won’t qualify for this new parental leave extension. 

If you’re still unsure if you qualify, talk to your employer or a reputable insurance provider to learn more.

What’s the Catch?            

Unfortunately, one component that seems to be lacking in this plan is a fathers-only leave. This plan does not properly account for male homosexual couples. This will likely result in male homosexual couples being unable to acquire the same leave as a family where a mother is involved.

While time with your child is priceless, you still need to be able to afford the basic necessities for your family. The amount you are paid for a year-long parental leave will not change when extended to 18 months.

The current maximum payout for parental benefits is $543 per week—that’s only $28,236 a year. If you stretch that out for 18 months, that only equates to $362 per week.

When you consider basic costs of living in a larger city like Toronto, monthly rent alone is an average of $1,473 for a two-bedroom apartment. For single parents and low-income families, this simply isn’t enough money to survive. This is especially true after you factor in all the supplies that are required for a new baby, such as formula and diapers.

With such a low payout rate, an 18-month leave likely won’t affect many families, as many will be forced to go back to work before their leaves are up.

Analyzing this parental leave with a realistic approach, this 18-month leave will likely only apply to families who are financially secure and who can afford to take the economic loss to spend quality time with their children.

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Debbie McNamara

Debbie is the perfect fit for business owners and employers, providing a great resource to those looking to retain and engage employees. Employee Benefits Consultant is her official title, but what she really offers is a business administration education, an LLQP certification, 20 years of professional experience in upper management, and an understanding of the needs and challenges facing both employers and employees. Off the clock, Debbie takes great pride in giving back to her community as an active member on a number of volunteer boards. With whatever extra time is left over, she can be found fulfilling a lifetime commitment to health and fitness by participating in individual sports such as running and CrossFit, as well as a variety of team sports including softball, indoor soccer, and volleyball.
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