Maternity leave in Ontario is similar to other provinces (except Quebec) and territories since it’s administered by the federal government. What makes maternity and parental benefits in Canada appealing is that you can still earn an income for up to 18 months while staying home to take care of your child.
When you’re on maternity leave in Ontario or parental leave, you’re on Employment Insurance (commonly known as EI) which pays up to 55% of your earnings, to a maximum of $638 a week (As of January 1, 2022). While these benefits are taxable, many Canadians feel less stress as they’re not worried about returning to work after just a few months because they lack an income.
Knowing how maternity leave works in Canada is vital since not everyone qualifies for EI benefits and it isn’t automatically given as soon as you have a child. Keep reading to understand everything there is about maternity leave in Ontario.
Maternity leave in Ontario vs. Parental leave in Ontario
One thing that confuses new parents is that maternity leave is different from parental leave. That’s right, there are two types of leave. They’re similar, but there are a few minor differences that you need to be aware of as they’ll affect how much money you’ll get.
Maternity leave in Ontario
Maternity leave benefits only apply to people who are away from work because they’re pregnant or have just given birth. This is for birth mothers. That means if you’re adopting or you’ve used a surrogate, neither parent would qualify for maternity leave benefits.
You can claim up to 15 weeks of standard benefits for maternity leave, but parents cannot share these benefits. Since parental leave can follow maternity leave, you can apply for both benefits at the same time.
Parental leave in Ontario
Parental leave (sometimes mistakenly referred to as paternity leave) in Ontario applies to both parents of a newborn or newly adopted child. These benefits can be shared, but you must choose between standard parental benefits or extended parental benefits. When sharing, parents must submit their own application and select the same option.
You also have the choice to take parental leave at the same time as your partner or one after another. Keep in mind that once you start getting your parental benefits, you can’t change options.
Standard parental leave in Ontario gives you up to 40 weeks of benefits. However, no parent can exceed 35 weeks of benefits. Note that new rules introduced in 2019 allows you to take 5 weeks of standard parental leave without affecting your spouse’s maximum of 35 weeks which is why there’s a limit of 40 weeks total.
When it comes to extended parental leave in Ontario, parents get up to 69 weeks of benefits, but no parent can exceed 61 weeks of benefits.
Note that maternity and parental leave are part of Ontario’s Employment Standards Act. Your employer can’t deny you these benefits.
Maternity Leave in Ontario eligibility
To qualify for maternity leave and parental leave benefits in Ontario, you need to meet the following criteria:
- You’re pregnant or have recently given birth when applying for maternity benefits
- You’re a parent with a newborn or newly adopted child when applying for parental benefits
- Your weekly earnings have decreased by more than 40% for at least one week
- You have accumulated 600 insured hours of work in the 52 weeks before the start of your claim or since the start of your last claim (whichever is shorter)
- Due to COVID-19, you currently only need 120 insured hours to qualify
While the above criteria are straightforward, you can always speak to a Service Canada representative to find out if you’re eligible. Part-time and full-time employees would qualify for maternity leave benefits as long as they meet the above criteria.
Once you come back from maternity leave, you would need to regain enough insured hours of work to go off on leave again. Similar to before, there’s no qualifying period. You could come back for six months and then go off again assuming you’ve met the eligibility obligations.
Pregnant employees that have a miscarriage or stillbirth more than 17 weeks before the baby’s due date do not qualify for pregnancy leave. However, if happens after that time frame, you’re still able to claim EI maternity benefits while you take time off.
Maternity Leave in Ontario for self-employed individuals
If you’re self-employed, you can still qualify for maternity leave in Ontario, but you need to register for access to EI special benefits for self-employed people. In addition, you need to meet the following criteria:
- A minimum of 12 months must have passed since your confirmed registration
- The time you spend on your business has decreased by more than 40% for at least one week because you’re pregnant, have recently given birth, or you’re caring for your newborn or newly adopted child
- You meet the minimum earned income amount during the previous calendar year before you apply for benefits. For 2020, you need to have earned at least $7,279 in 2019.
As long as you have a valid social insurance number, you may be eligible for maternity and parental benefits. This even applies to people who aren’t Canadian citizens.
Maternity leave pay in Ontario
As of January 1st, 2022, maternity leave pay in Ontario is 55% of your insurable earnings to a maximum salary of $60,300. That works out to a total of up to $638 a week.
For those who are taking parental leave, you have two options that pay different sums. Standard parental benefits will allow you to receive 55% of your insurable income for up to 40 weeks. Remember, no one parent can exceed 35 weeks of pregnancy leave pay in Ontario.
If you choose to take extended parental leave, your pay is 33% of your insurable income for up to 69 weeks. This gives you a weekly pay of up to $383. Again, no one parent can exceed 61 weeks of parental leave benefits.
The maximum amount of EI benefits you are entitled to is the same when it comes to standard and extended parental leave. It’s just paid out over 35 weeks or 61 weeks depending on your choice.
That said, those who take standard parental benefits and return to work after 12 months where they can earn their full salary, often come out with more money than those who take the extended leave.
Some employers offer maternity or parental leave top-up which can give you a nice boost to your income for a period of time. For example, your employer might top up your pay up to 80% of your income. That means they would give you an additional 25% of your pay on top of the 55% you’re getting from EI. Not every employer offers this, so check with yours to see what you’re entitled to.
Keep in mind that there is a one-week period where you won’t be paid which is referred to as the waiting period. The government likes to think of this as a deductible. Maternity and parental benefits are also fully taxable. How much you’ll pay depends on your household income, but for most people, it’ll be lower than their usual tax rate.
What you do with your benefits is up to you. Most people use it for regular bills and expenses, but there’s nothing stopping you from investing it in your high interest savings account, RRSP, TFSA, or RESP. Some people even use the money to pay off their debt.
How to apply for maternity leave in Ontario
As soon as you stop working, you’ll want to apply for maternity leave in Ontario. Do not delay your application! If it takes you more than 4 weeks after your last day of work to apply, you could lose some of your benefits.
The actual process of applying for maternity leave is easy. Just follow these steps:
- Choose your benefits
- Complete the online application
- Provide the required information
- Wait for your benefit statement and access code to arrive by mail
- Review your application
If your application is approved, you’ll get your first payment about four weeks after you applied. If your banking information is set up with your CRA account, then the money you’re entitled to will be directly deposited into your account. If not, you’ll get a physical cheque in the mail.
Unlike regular EI, you can still receive maternity and parental benefits while outside Canada. To find out when your EI payments end, check your My Service Canada Account.
Additional things to be aware of when going on maternity leave
Some of your employment benefits may include maternity leave top-up. That’s where your employer may pay the difference between what you get from EI and your regular wages. Since this is free money, it’s in the best interest of couples to take advantage of anything that’s offered.
While you’re out on your weeks of maternity leave, your regular benefits such as dental plans and contributions to pension plans won’t apply. However, some companies will let you buy into those perks when you’re off, which is likely worth it. Some employers may also offer unpaid time off if you need longer leave. Unpaid leave is not mandatory, so it’s up to the employer to decide.
Another expense you’ll want to factor in is life insurance. Now that you have a dependent, getting life insurance is the smart thing to do since it’ll protect your loved ones in case you were to suddenly pass. Term life insurance is relatively inexpensive, so it’s worth getting.
The cost of raising a child in Canada is not cheap. Fortunately, there are government programs that provide financial assistance to people who qualify. Maternity and parental benefits will help, but be sure to get a hold of your finances as you’ll likely be spending a small fortune on your child for the next 20 years.