Parental leave boosted to 18 months

This article was originally published on BenefitsCanada.com.

The federal government is moving ahead with extending employment insurance parental benefits to 18 months and is creating a new 15-week benefit for caregivers.

According to Wednesday’s budget announcement, the changes to parental benefits would allow parents to choose to receive employment insurance parental benefits over an extended period of up to 18 months at a lower benefit rate of 33% of average weekly earnings. Parental benefits will continue to be available at the existing benefit rate of 55% over a period of up to 12 months.

The potential benefit available won’t change, notes Nora Spinks, chief executive officer of the Vanier Institute of the Family. “You either use up your benefits as a family to 12 months or you stretch that same amount of money over 18. […] People are still going to max out when they max out.”

But for employers, the big question will be around programs to top up parental benefits. “I suspect there are a lot of people in the HR world today scrambling and looking at the exact wording [of their policy statements],” says Spinks, providing an example of an employer that tops up parental benefits to 100%.

“You’re topping up 45% if they’re off for a year. Do you then top up and also spread that exact same amount over 18 months? That’s one way. Another would be to maintain the top up in principle, regardless of how much the government is paying, so top up to 100% for the 18 months. Another option would be to top up to 100% for the first year, and 75% for the extra six months, or 75% for 18 months. So there are a number of variables that employers need to consider when they’re examining their top up and looking at their options.”

The government expects the change to parental benefits will cost $152 million over five years, beginning in 2017/18. “The costs of allowing parents to receiving EI parental benefits over a longer period at a lower income replacement rate include the EI family supplement,” wrote Jack Aubry, Finance Canada’s deputy director, media relations and consultations, in an email to Benefits Canada. “EI beneficiaries from low-income families will receive the supplement to the EI parental benefits over the 18-month period.”

Aubry also noted there will be administrative costs associated with implementing the changes to employment insurance benefits.

The budget also proposes allowing expectant mothers to claim employment insurance maternity benefits up to 12 weeks before their due date, an expansion from the current standard of eight weeks. The government expects the additional flexibility to cost $43.1 million over five years, beginning in 2017/18.

The potential change isn’t in addition to the maximum 52 weeks currently available to new mothers, says Spinks. “It still means you have a maximum of 52 weeks combined — your wait period and your benefit period, plus your parental benefit for the family. It doesn’t mean you get 12 weeks and then a year. It counts as part of your year.”

Caregiving benefit

The government’s proposed new employment insurance caregiving benefit of up to 15 weeks, which would be in addition to the current compassionate care benefit and the program for families with severely ill children, will cover a broader range of situations where individuals are providing care to an adult family member who requires significant support in order to recover from a critical illness or injury.

“What this does is recognize that there’s a diversity of caregiving in Canada, and the vast majority of caregivers are in the paid labour force,” says Spinks. “And with the direction that our health-care policies are going — in other words, discharge from hospital as quickly as possible, maximize recovery in one’s home, aging in place — those are the policies that result in families playing a very significant role in caring for people who are ill or injured or recovering from surgery or receiving treatment.

“In the past, they’ve not been able to access EI benefits because their loved one wasn’t at risk of death within six months. What this does is it opens up the benefit up to 15 weeks for those who are caring for a loved one who depends on them for their safety and recovery.”

Employers aren’t likely to get a lot of notice when employees take the benefit, says Spinks, who notes that doesn’t change the fact that people would have been taking the time off anyway. “The difference is now, when an employer grants the leave without pay, there won’t be the added stress on the employee of financial strain.”