It’s the special Christmas edition of Mat Leave Monday! I’ve got my Santa hat on, and I’m ready to cover some more common questions about maternity leave in Canada. If you want to brush up on what I’ve already covered you can read my previous posts here and here.
Disclaimer: I am not a lawyer or HR professional and I do not represent the federal government. If you have questions, you should probably speak directly with your employer or Service Canada. 
Are EI benefits taxable?
Yes, they are. The government will automatically deduct income tax at the source. So the amount deposited in your account will actually be less than whatever your benefits level works out to. However, unlike employment income, they do not deduct any benefits premiums, or EI and CPP premiums.
What happens if you’re laid off during maternity leave?
As I explained in my earlier post, you can’t be laid off because you’re pregnant or going on maternity or parental leave, but you can be laid off for unrelated reasons. So what happens if you get the heave-ho while you’re on leave?
I actually asked someone who works for the government about this, and I googled, and I couldn’t get a clear answer. However, I know how this was handled with friends and colleagues, and others confirmed that this is how it usually works. There may be exceptions, and even variations in labour law from province to province. If you are aware of cases that were handled differently I would be interested in hearing about it.
Anyhow, what generally happens is you are officially laid off effective your first day back at work. Until then you continue to collect your maternity and parental benefits through EI. And then any severance benefits you may get are paid out by your employer once your leave is over. However, you will likely not qualify for EI, since you probably don’t have enough insurable hours (for more on that read this post). The exception might be if you didn’t take your full year of leave.
How will a Christmas or holiday bonus affect my benefits?
Whether or not you will receive a bonus while you’re on leave depends on your employer and your contract. If you do receive a bonus of any kind (including a physical gift) it may affect your benefits. Remember that while you are on parental leave, you are allowed to earn a small amount of money before your EI is affected.
Let’s say that you’ve received some type of bonus, and its value is high enough that it affects your EI. How do they allocate it against your benefits – i.e., how much will they deduct from your EI? There is a handy chart here that tells you all about it. Basically, it depends on whether it’s a bonus paid specifically for Christmas (think holiday gift), or some other type of bonus (think annual bonus that just happens to paid at Christmas).
You can tell whether it’s a Christmas bonus or not based first on your employment contract, written or verbal. In the absence of a clear answer, the government may contact your employer to get more information.
If it’s a true Christmas bonus, then it will be allocated against the week that it’s paid. Say, for example, that you get a $3000 Christmas bonus (lucky you!). This is well in excess of the maximum weekly EI benefit plus the 40% you’re allowed to make, so in the week that you get the bonus you would receive no benefits. If it’s not a true Christmas bonus, then they would take the money and calculate how many weeks of work that represents. Let’s return to our example and say that you get a $3000 bonus, and your normal gross weekly salary is $1000. That means that they would allocate the bonus over three weeks, and so you would lose three weeks of EI benefits.
This is all very confusing and complicated, and I personally was amazed that there are different types of bonuses that are handled differently. So really, should you find yourself in the enviable position of having income to claim while you’re on leave, it’s probably best to just contact Service Canada and get their expert help. My next point tells you how to do that.
How do I report earnings while I’m on leave?
Any money that you make while you’re on EI needs to be reported to Service Canada. If you’re completing reports, you can declare your earnings that way. If you’re not, and most of us don’t since it’s not required, then you can declare your earnings by telephone. Call 1-800-206-7218, from 8:30 am to 4:30 pm (it doesn’t give a time zone, so I would assume Eastern), and press “0″ to speak to a representative. For more information on earnings and how to report them, look here.
What about non-employment income?
As this handy-dandy article explains, employment earnings are those paid by your employer, or those earned through self-employment activities. Other money that you may receive is not allocated against your EI. Tax refunds, lottery winnings, gifts from your grandmother, inheritances, and so forth need not be claimed. So, yes, ironically you could win $10 million and still collect EI as I understand it. But as always, if there is any doubt, contact Service Canada and they will help you out.
What if I get pregnant again while I’m on maternity leave?
This happens a lot – after all, a very high percentage of pregnancies are unplanned. How you handle it depends on you. If you weren’t planning on going back to work, then it won’t change your plans. However, if you were planning on returning, and you really need EI to swing another maternity leave, then you need to do some math.
You need 600 hours of insurable earnings to qualify for EI. So the first thing to do is determine roughly when you would want to go on leave with the next baby, and the second thing is to determine how many weeks you have to work to accumulate 600 insurable hours (as far as I know paid vacation time, statutory holidays, and short-term sick leave are considered insurable). Take the date when you expect to go on your next leave and count back the number of weeks you need to work, and you have a new return to work date. If the new return to work date is before the date you’d planned to go back, you will need to return sooner, or increase the number of hours you work when you do return. Keep in mind that your partner may qualify for parental leave if you end up going back sooner than expected.
The really hard thing about finding out you are pregnant while on mat leave is: if you need to return to work to earn another mat leave, you will need to find suitable daycare immediately. This is almost impossible in ANY province at any time, but even less daycares accomidate such young babies. From experience, I had to go on a wait list that proved to take 11 months, which as you know, is longer that I was pregnant for (thank God).
Good Information,my question is if i got pregnant while on maternity leave i have to go back sooner and get 600 hours to get maternity leave again but will i be allowed to take a year or am i entiteled for 6 months, sorry if someone could answer me this for me, if im on maternirty can i leave the country and still get my benefits ??
thanks
This is a great resource for anyone going or that has been on maternity leave.
Our 2nd was born in June 08 and my wife finished her mat leave and went back to work Sept 08. After some juggling I took the parental leave. Now she is pregnant and due Sept 09. Can she take back and finish the parental leave while I go back to work and then start another mat leave claim immediately after? Yes she has 600+ hours since returning to work. Will they base her rate on her previous claim or make adjustments for her current rate of pay? Thanks for any help or info.
My wife just earned a retention bonus of 20% of the last 2 years of income (apr07 to apr09.) She received the cheque while on 6 weeks of sick leave our company pays after the baby’s birth. Today the letter from EI says that they are docking her 8 WEEKS for the 6 weeks of sick pay + 2 weeks she was excused with a doctor’s note before the baby came…+ another 11 weeks because of the bonus! Her total coverage is now 31 weeks.
I know we are not so poor that this kids will be deprived, but all the extra money went to the mortgage the day we got it, so this EI decision really pulled the rug out from under our feet. Does anyone think an appeal has worth?
I am currently on mat leave, my son is 6 months and I found out that I am pregnant again. I have to go back to work next month so I can earn 600 hours for my next EI claim.
I have to write a letter to my employer to let them know that I am coming before my mat leave ends. Do I have to write that I am pregnant again? I am afraid that this info would discrimate? I NEED HELP..
Thanks for the maternity leave faq. This will help a lot of women looking for answers. I wish I knew some of these when I had my children.
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my question is can i be qualified for MAT leave.. Or EI benefits even im working with my employer for 6months only but i already have 600hours of duty..???
I am on my parental leave and have been layed off due to closure of the company…this happens 6 weeks before my parental leave ends….I am recieving a severance but it is soo unclear as to what happens with that severence…I have asked service canada if I can just quit my parental leave and live off my severance but they just aren’t giving me an answer….saying it’s a legislative issue and they will call…..there has been no call and I still have no one to give me an answer…I have a feeling they will call me back to say I will owe them back money, of which I haven’t even recieved yet….I am so confused…does anyone know an anwer for me?
I can tell you how it usually works. Typically, you aren’t laid off while you are on leave. They lay you off effective the first day back at work. So you continue to receive your parental benefits until your return-to-work date, and then (and only then) you receive your severance. When it happens this way, your severance does not impact your benefits. That was how it went for me.
If you’ve received it already, though, it will likely impact your benefits, and you would not be eligible for the remaining 6 weeks of EI.
Having said that, there are labour law issues that impact when, exactly, you can be laid off, and it varies from province to province. Talking to your former employer and the labour relations board may help clarify this for you.
Hi there
I am currently on maternity leave until Jan 1, 2012. i currently get paid the maximum amount every week. My question is if I get pregnany before I return to work , and I do return to work in Jan and get my full 600 hours to re qualify for maternity leave, will I still get the maximum amount of money next time I go on leave. Do they base it on what you make in the 600 hours or what you make in a year, ect..
Thanks
So my wife is going on maternity in Jan 2012. She has already been notified her job is becoming redundant and she will have to opportunity to apply to a new job in the company or take a package. She is unionized and her union has recommended she follow a process called recall, where she can chose to be recalled upto 18 months for another job or take a package at anytime during that 18 months. In this way, we are planning she takes he mat leave starting Jan 2012, and once she gets to Dec 2012, when her mat leave runs out, she can get her package, which will be over 600 hours worth of severance. She will wait until her severance runs out (~ 7 months), after which she was hoping she would be eligible for EI again (if she hasn’t found another job by then). Is our understanding correct?
Unfortunately, you are NOT eligible for EI following severance, it is not counted as employment income. You need to accumulate the minimum number of actual employment hours at work to qualify for EI again after a maternity leave. My job was eliminated while I was on my second maternity leave, and I received my full maternity and parental leave benefits, and then my severance package, but I was not eligible for any EI benefits once the severance ran out.
Thanks Amber, given the uniqueness of this situation I couldnt find the answer anywhere. Now we can plan accordingly.
I am scheduled to return to work from maternity leave in Jan 2012. I just found out my job has changed locations which would involve a 2 hour one way commute which I am not willing to do. Does my employer have to offer me a comparable position in my previous job location?
It depends on where you live – this is covered by labour law, which is under provincial jurisdiction. However, in most provinces your job does have to be comparable or equivalent, in terms of responsibilities, compensation and location. A 2 hour commute doesn’t sound equivalent to me, but consulting a labour lawyer would give you the most definitive answer.
I know for 2012 the EI maximum weekly benefit rate is $485. What is the amount after taxes?
That will depend on your tax bracket, which can be impacted by a number of factors. There’s not an easy answer.
My ROE states I have 512 insurable hours. I was off on sick leave due to my pregnacy and would have continued to work or collect sick leave until my due date (Which would have put me well above the 600 hours.) However I delivered my babies at 29 weeks. Do they provide special circumstances in this case since it was beyond my control that the babies came early? Just worried I will not qualify as everything I read it says you must be at 600 hours.
I’m not aware of any special circumstances – which really sucks, to be frank. I do know someone who came in just under 600 hours (like 596) and went back to work for half a day to reach it. For you, though, much more time would be required, so that may not be feasible. Your best bet is to call Service Canada and talk to them.