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 per cent of average weekly earnings. Parental benefits will continue to be available at the existing benefit rate of 55 per cent over a period of up to 12 months.

Have your say: Do you agree with the move to allow for 18-month parental leave?

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 per cent.

“You’re topping up 45 per cent 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 per cent for the 18 months. Another option would be to top up to 100 per cent for the first year, and 75 per cent for the extra six months or 75 per cent 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.”

Read: More budget updates: Canada savings bonds dropped, T4 rules changed

In a note published after the budget, Eckler Ltd. said that since the changes involve federal regulations, provincial employment standards legislation won’t completely align with the proposed extension, at least not initially. It also noted that since many human resources programs, such as vacation, are based on annual accruals, employers may need to consider policy changes to integrate them with the 18-month leave.

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 receive 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 would be administrative costs associated with implementing the changes to employment insurance benefits. The government expects the changes to be in place by the end of 2017. The extended option will be available to new claimants who apply for employment insurance parental benefits once the measure is in place, according to Aubry. Existing claimants already receiving the benefits won’t be able to switch to the extended option.

Read: Will 18-month parental leave reduce pressures on working families?

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.

Read: How to support working caregivers

“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.”

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.”

The government also said employment insurance premiums would increase slightly next year, to $1.69 per $100 of insurable earnings in 2018, up from $1.63 in 2017.

Read: Government launches consultation on parental, caregiving benefits     

Note: Story updated March 22, 2017, at 3:00 p.m. to include additional information from Finance Canada.

             

Copyright © 2017 Transcontinental Media G.P. Originally published on benefitscanada.com

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See all comments Recent Comments

Emily:

I am currently on maternity leave with twins. Does anyone know when the 18 month maternity leave will start? Since I am already on maternity leave, would I have the option of extend it to 18 months?

Thursday, March 23 at 5:11 pm | Reply

jennifer paterson:

Hi Emily. I’ve just updated the story with the answer to your question. Unfortunately, claimants currently receiving the EI parental benefit are not eligible for the extension.

Friday, March 24 at 9:42 am

Jenn:

When does this come into effect? I am pregnant but will go on Mat leave end of April. Will I be able to have the 18 month option by that time?

Friday, March 24 at 11:28 am | Reply

jennifer paterson:

Hi Jenn. The story includes some details about the change coming in at the end of 2017.

Thursday, March 30 at 10:53 am

Cynthia:

It’s nice to have the extended option, is there any flexibility, for instance:
1) one selects 12 months, then later in the year decides for 18 months or vice versa?
2) can one select 18 months but get paid within the 12 month period?

Friday, March 24 at 5:50 pm | Reply

Catherine:

EI is one thing – but how does this extend to protections under Employment Standards? Are employers obligated to hold your job for 18 months while you’re on parental leave? It’s fine to have an option to extend your EI payments to the 18 month mark, but there’s no point if your job security is at risk because of it.

Also – are the EI premiums increasing because of something not related to extended parental leave? If the EI payment amount isn’t increasing, why is the premium increasing?

Tuesday, March 28 at 5:13 pm | Reply

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