The arrival of a child is a joyous event, but this important stage of your life will bring about certain changes that you will have to consider in your financial plan.
Taking time off
When your baby is born, you will undoubtedly want to take some time off work to integrate the newborn into your family, but you may be concerned about the drop in income resulting from this decision. You can rest easy, because under the Québec Parental Insurance Plan (QPIP), Quebecers can receive benefits so that they can spend quality time with their newborn… and their spouse. To be eligible for benefits, you and your employer will have had to contribute to the QPIP. If you are self-employed, you must have made these contributions yourself. Did you know that as a health professional, you can enjoy enhanced benefits? Continue reading for more details.
Leaves: it’s your choice!
As parents, you are entitled to various leaves so that you can be there for your newborn’s first babblings.
- Biological mothers only
- Begins no earlier than the 16th week before the expected week of delivery and ends no later than 20 weeks after the birth week
- Maximum of 18 weeks
- May be followed by a parental leave
- Biological fathers only
- Begins no earlier than the week the child is born and ends no later than 78 weeks after the birth week
- Maximum of 5 weeks
- May be followed by a parental leave
- Biological or adoptive parents
- Taken by both spouses simultaneously or consecutively, no earlier than the week the child is born or the week the child comes into the care of one of the parents for adoption, and ends no later than 78 weeks after the birth week or the child’s arrival
- Maximum of 59 weeks
The amount and duration of benefits vary depending on whether you opt for the basic plan or the special plan. They are calculated on the basis of your annual compensation, up to a maximum of $88,000 per year, and according to the percentages indicated below.
Duration and amount of maternity leave or paternity leave benefits (biological or adoptive parents)
|Maternity leave||Paternity leave|
|Basic plan||18 weeks at 70% of income.||5 weeks at 70% of income.|
|Special plan||15 weeks at 75 % of income.||3 weeks at 75% of income.|
Duration and amount of parental leave benefits
|Biological leave||Adoptive parents|
|Basic plan||32 weeks, including 7 weeks at 70% of income, and 25 weeks at 55% of income.||37 weeks, including 12 weeks at 70% of income, and 25 weeks at 55% of income.|
|Special plan||25 weeks at 75% of income.||28 weeks at 75% of income.|
Your financial situation changes when your baby arrives. Your budget after the birth of your child will be very different from your current budget. Your new parental responsibilities will entail additional expenses and require major adjustments in different areas:
- Savings (RESP, RRSP)
- Legal and estate planning
- Tax planning
What is the best strategy for you and your young family? Even if your new family budget is a challenge, it’s possible to achieve a balance. Good planning will enable you to chart your course, adjust to the changing needs of your children as they grow older, and stay focused on your goals.
Be well advised and enjoy special moments with your family
Reconciling your desire to be with your loved ones for the arrival of a child and your wish to maintain your current standard of living is a challenge that your Professionals’ Financial Advisor can help you meet. Your Advisor can help you choose the right plan so that you can receive optimal parental benefits to achieve your work-family balance. Your Advisor can also assist you in adjusting your budget to account for the costs associated with your new responsibilities, and assess whether certain changes are called for in terms of your savings, your insurance, or your tax, legal and estate plans.