Maternity Leave in Ontario: How it works

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 $573 a week (As of August 1, 2020). 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. They’re similar, but there are a few minor differences that you need to be aware of as it’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. That means if you’re adopting or you’ve used a surrogate, neither parents would qualify for maternity leave benefits. 

You can claim maternity leave benefits for up to 15 weeks, 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 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.

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.

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 August 1st, 2020, maternity leave pay in Ontario is 55% of your insurable earnings to a maximum salary of $53,100. That works out to a total of up to $573 a week.  However, due to COVID-19, standard parental benefits will pay at least $500 per week. Extended leave gets you at least $300 per 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 maternity 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 $344. 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

Final thoughts

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.