How To Choose Between The 12 and 18 Month Parental Leave

Oh Canada! What a wonderful country to be a new mother. As Canadians, we are fortunate to have a paid parental leave program. In 2017, our federal government introduced the option for parents to take an extended 18 month leave instead of the usual 12 months. This article will examine how to choose between the 12 and 18 month parental leave.

Deciding how long you can stay home with your new baby is both a financial and emotional decision…one that is tricky to make when you are full-blown pregnant and baby isn’t even here yet.

But, don’t sweat it! Even after you are in the thick of late night feedings and diaper changes, you can switch from the 12 to 18 month maternity leave – I did.

There are just some financial facts to weigh before you make the call, which this article will cover too.

Here are some important factors to consider when deciding how to choose between the 12 month and 18 month parental leave.

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12 Vs 18 Month Maternity Leave - Financial and emotional factors to consider

How Does the 18 Month Maternity Leave Work?

Since December 3, 2017, Canadians have had the option of staying home an extra 6 months with their new babies.

I have four delightful daughters and I am currently taking the extended parental leave with my last baby. I didn’t have the option of taking an 18 month leave with my first 3 girls, so I really do appreciate the pros and cons of both choices.

There are some important things to consider when choosing which parental leave option is best for your family.

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Benefits Amount

No doubt, money is upfront in your mind if you are thinking about taking the extended parental leave. Determining how much money you are entitled to in both benefit scenarios is the first step towards making an informed decision.

Adding a new family member costs money and the last thing a sleep-deprived new parent needs is added financial stress. So, let’s take a look at what money you are entitled to receive with both benefit plans.

Read: Newborn Baby Essentials On A Budget

The 12 Month Parental Leave

If you decide to take the 12 month parental leave you will be eligible for Standard Parental Benefits.

Employment Insurance maternity benefits are offered to biological mothers or surrogate mothers who aren’t working because they are pregnant or have given birth. New mothers can take a maximum of 15 weeks of EI maternity benefits. The 15 weeks can start as early as 12 weeks before the expected date of birth, and can end as late as 17 weeks after the actual date of birth.

Maternity leave benefits are paid at 55% of your weekly average earnings, up to a maximum amount of $573 per week. Following the 15-week maternity leave, either parent can claim 35 weeks of parental benefits.

EI parental benefits are offered to parents who are caring for a newborn or newly adopted child. Standard Parental Benefits, for the 12 month leave, can be paid for a maximum of 35 weeks and must be claimed within 12 months after the week the child was born or adopted.

The benefits are available at a weekly benefit rate of 55% of your weekly insurable earnings up to a maximum amount of $573 per week. The two parents can share these 35 weeks of benefits.

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The 18 Month Parental Leave

If you decide to take the 18 month parental leave option you will apply for Extended Parental Benefits.

With this model, your Employment Insurance Maternity Benefits remain the same. Maternity leave benefits are paid at 55% of your weekly average earnings, up to a maximum amount of $573 per week.

The difference with the 18 month leave is noticed when your EI Parental Benefits kick-in after the 15 week maternity leave.

During this time period, parents or caregivers will receive 33% of their salary for up to 61 weeks, to a maximum of $344 per week. Extended parental benefits must be claimed within 18 months after the week the child was born or placed for adoption.

The benefits are available to biological, adoptive, or legally recognized parents. The two parents can share these 61 weeks of benefits.

The Government of Canada has a maternity and parental benefits calculator to give you an estimate of your EI benefit amounts.

You may also qualify for the Family Supplement if your net family income is under $25,921, you have kids, and are receiving the Canada Child Benefit. The Family Supplement can top-up your parental benefit rate to as much as 80% of your earnings.

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12 Month Parental Leave Versus 18 Month Parental Leave

Based on these numbers, a mother receiving the maximum amount of EI, will get $28,650 over the span of 12 months or $29,579 over 18 months. So, if you opt to take an 18 month parental leave, you will need to be prepared to receive $229 less per week at maximum earnings than with the 12 month option.

Standard Versus Extended Parental Leave Comparison Table

	Maternity Leave Benefits	Parental Leave Benefits	Total Benefits
12 Month – Standard Parental Leave	$8,595 (15 weeks x $573)	$20,055 (35 weeks x $573)	$28,650
18 Month- Extended Parental Leave	$8,595 (15 weeks x $573)	$20,984 (61 weeks x $344)	$29,579

12 Versus 18 Month Maternity Leave Comparison Chart

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How To Apply For Employment Insurance Benefits

To receive employment insurance benefits, you need to submit an online application to Service Canada. The website will guide you through the application process.

Information Needed To Apply For Maternity and Parental Benefits

Social Insurance Number (SIN)
your mother’s maiden name
your address
complete banking information if you want to sign up for direct deposit.

When you apply for EI maternity benefits, you must also provide the expected or actual date of birth.

When you apply for EI parental benefits, you must provide:

the date of birth of your baby or, in the case of an adoption, the date on which your child was placed with you (you must also provide information about the adoption agency)
the SIN of the other parent, if you plan to share the benefits.

You will also need the following employment information:

the names and addresses of all employers you worked for in the last year
an explanation if you quit or were dismissed from any job in the last year
your record (s) of employment, used to calculate your highest weeks of earnings (often your employer will forward your ROE to Service Canada at your request).

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Consider Daycare Costs

While you will be receiving a smaller government cheque each month if you take the 18 month parental leave, there are other important factors that might impact your finances.

The cost of daycare in Canada continues to increase steadily.

When my first daughter started going to a licensed, home-based daycare eight years ago, I paid $30 per day. I am now looking into daycare options for my baby and can expect to pay $40 to $50 per day in my community.

According to a 2018 survey by the Canadian Centre For Policy Alternatives, the average cost of full-time childcare for a child, 4 and under, in Canada is approaching $1000 per month. If you live in a big city, expect to pay even more.

Should I choose the 12 or 18 month maternity leave

Read: How To Prepare Your Finances For A New Baby In Canada

Figure Out Your Take-Home Pay After Paying For Childcare

Take into consideration whether staying at home an extra 6 months and not paying for daycare for an infant might leave you better off financially.

For example, say you are entitled to receive the maximum allowed amount of $344 per week for the 18 month parental leave. That works out to $1,376 for every 4 weeks you are on leave.

And say, if you returned to work after 12 months, it would cost you $1000 per month to put your baby into a daycare program. Is the monthly salary you would earn, minus the daycare costs, a substantial amount more than $1,376?

Perhaps you have older children who attend a full-time daycare program. If you can pull them out of care while you stay at home with your new baby, you’d double the amount of savings over those extra 6 months.

Read: How To Budget For A New Baby – First Year Checklist

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Other costs associated with childcare

What if you have school age children who will need to use before-and-after school childcare when you return to work?

Across all the Canadian provinces (excluding Quebec) $200 per month is the average cost for before and after school childcare.

Factor in the amount you will save in before and after school care if you stay at home an extra six months.

Example Calculation of Salary Minus Childcare Expenses:

Your net income per month – daycare for new baby (approx. $1000) – full-time daycare costs (per month) for older children – before and after school care costs (per month) for school age children = Income left over after childcare expenses

Does the amount of income left over after subtracting childcare expenses make it financially important that you return to work after 12 months of parental leave? That is a question only you can answer.

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Career and Emotional Factors That Affect When you Return To Work

There are other factors that can affect how to choose between the 12 and 18 month parental leave.

Depending upon your career, it may be necessary or desirable for you to go back to work after a year.

You may work in a highly competitive industry where taking an extended amount of time off will put you behind your colleagues career-wise.

Or, you may just miss interacting with other adults and using your brain in ways other than singing Itsy-Bitsy Spider and playing peek-a-boo.

In these cases, a 12 month parental leave might suit you best.

If however, your finances agree, and you relish the idea of staying home an extra 6 months with your baby bundle, take advantage of Canada’s 18 month parental leave.

Read: Best Baby Strollers On A Budget – $500 Or Less!

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Can You Switch From The 12 To 18 Month Maternity Leave?

Yes and No!

As far as parental benefits are concerned, once your application for maternity and parental leave is processed by Service Canada, and your payments start arriving, you are locked in. So, it is somewhat important that you make an informed decision beforehand.

But life is full of surprises!

If you opt for the 18-month parental leave and your financial situation changes (perhaps your spouse loses their job) you can, of course, go back to work. However, be prepared…you won’t get the EI money you would still be “owed” for the remainder of your leave.

Inversely, what if you choose the 12-month parental leave and change your mind?

That was exactly the situation I was in when my now 12-month-old was 8 months old.

I live in a rural community with scarce childcare availability. Even though I put my daughter on wait-lists right after her birth, no spaces were going to open up in time.

Add to that the fact that she is my last child and I wanted to savor the extra time I could spend home with her…I changed my mind.

Service Canada wouldn’t adjust my benefit payment amounts, so I ran out of benefits after 12 months. However, It was not an issue extending my leave to 18 months with my employer since I was legally entitled to.

So, yes, you can extend your maternity leave to 18 months but the benefit money will stop earlier.

How To Decide Between The 12 And 18 Month Maternity Leave

How To Choose Between the 12 and 18 Month Parental Leave – The Choice Is Up To You

With each of my four babies, my professional and personal experiences where different, and therefore my choices were different.

With my first baby, I was just starting my career as a teacher and teaching jobs were hard to come by. I only had a one-year contract teaching position so I opted to head back to work when my daughter was 9-months-old.

With this final maternity leave, my job is fairly secure so I’m more relaxed knowing my teaching position will be there when my baby is a year and a half old. I did, however, start this blog when she was 8-months-old because I missed writing and having a project of my own.

Ultimately, deciding between the 12 month parental leave and the 18 month parental leave is a personal choice. Think it through, add up the numbers, and don’t worry if life throws you a curve ball and you change your mind.

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