Employment Insurance Special Benefits for Self Employed People

[DaycareLady]

I had NO idea about this until I recently sharing my stress and worries to a friend about how we would plan our 3rd baby and how we would ever make it work with no EI/mat leave and what I would do with trying to run the daycare with a newborn because I could never afford to just be off without pay....well here is my saving grace and I feel SO much better now!! Did anyone else not know about this?! Perhaps I am behind haha. Haven't read the whole thing yet but you pay into it for 1 year and then are entitled to EI benefits the same as if you were employed. You pay $1.88 on every $100 you make to qualify!


http://www.servicecanada.gc .ca/eng/ei/publications/sew_publication.pdf

[playfelt]

Before you get too elated look up some of the other posts on this as it isn't as great as it sounds. Your income is so minor (remember it is taxable income not gross income this is based on) that to get EI on $10,000 worth of income is not much at all and there is a trap of having to continue to pay into the program. You would do better to start squirreling away money into a TSFA or similar interest earning account.

Also it is possible to do daycare with a newborn so check out some of those threads too - I started daycare when my own kids were 4 m and 22 m and my last two kids were born into the daycare. Your biggest obstacles will be needing time off for the end of the pregnancy depending on how you feel and then decide how many months you need to recover physically which could be only 2-3. I found it was a lot nicer having the daycare kids to keep my older kids entertained and parents were great knowing that we weren't doing a lot of programming for the first little while.

[Wonderwiper]

Yes, as playfelt says, this is not as great a windfall as you think. I opted to suck it up and have my time off unpaid when I had my second. Once you start paying in, you have to keep paying. You can't just take a year off collecting benefits and forget about paying again. The premiums are small for a reason....payout is small too. In my opinion,it is much easier to just save for time off. Please research carefully.

[Crayola kiddies]

yup you would be better off putting a portion away in a savings account and having hubby take mat leave for the first few weeks/months to help with the daycare and newborn. use your holidays for when you are due (hopefully baby will makes its entrance on time) and then have dad be home to pinch hit. most daycare providers only close for a short period so they don't lose their families in care.....but the key thing is to have a plan in place before you announce to the families that you are expecting and that helps them to feel reassured.

[playfelt]

Yes don't forget that the time off can be shared between maternity/paternity leave. In some cases the dad takes the year off or at least several months to help run the daycare - mostly to be the one awake while mom naps/feeds baby and heals as needed.

Be prepare that the longer you take off the likelihood of your families returning to your daycare when you reopen is reduced meaning once they are settled at the new daycare they may choose to stay there and you will be needing to budget to look for new families.

[DaycareLady]

Wow, thanks so much everyone!! I was defiantly getting all caught up in this before reading it totally...I appreciate you pointing these things out!

[gravy_train]

I registered for this program a year ago and am due to have my baby in October. Because of the stress and high demands, and physical labour involved in our jobs my dr has put me on sick leave effective immediately. This means that I will (hopefully) get 15 weeks of sick leave and then 52 weeks of maternity/parental leave to be with my family.
I paid around $500 in EI premiums on my taxes and I will receive more than $17000 in benefits. The math makes sense to me as I would have to pay into the program for over 30 years at my current income rate in order to break even. Now, I have just filed my application for benefits so will update with any news as my application is processed. So, far though, this program is a no-brainer for those who woudl like to have a baby and be able to take a maternity leave.

[mickyc]

I think it is a great program. I don't plan on having another baby but I do pay into it just for the security that if something happens to me and I can't work then I still get the sick benefits.

[5 Little Monkeys]

I signed up for it to have mat leave and if I ever needed sick or disability leave. Reading this now makes me wonder if I made the right choice!

[gravy_train]

I think it's a great program and when you weigh the cost versus the benefits you will receive it makes sense if you plan on having a baby. I wanted to and will post a follow up when my benefits arrive because I really think more home daycare providers should take advantage of this program. Mind you, it doesn't make a lot of sense if your children are older and you don't plan on having more.
Don't stress 5 little monkeys - I think you did the right thing!

[5 Little Monkeys]

Thanks gravy!! I hope it comes in handy one day :)

[kidam]

You can opt out but only as long as you haven't yet received any EI benefits. Be careful though: if your business keeps on making money and providing you with any income while you're off work, that money will be subtracted from your EI benefits.

[gravy_train]

Hi everyone! As promised I am updating the threads on Maternity Leave benefits so that others can learn from my experience :-).
So, I registered online for EI benefits for self-employed people in June 2013, knowing that we were going to try to have a baby in the coming months. I was hesitant at first because when I read through the advice here a lot of people seemed to be against the program, however when I did the math and determined how much I would pay in premiums versus how much I would receive in benefits, there was no question that this program was right for me.

I applied for sick leave at the beginning of June - my midwife had no hesitation at all about writing me a letter recommending that I stop working immediately (working over 50 hours a week alone is justification for this, but add in the stress, the physical requirements, etc. and it makes sense). I found out today that my application was approved and that I will receive my benefits in 2-3 days. I will receive 15 weeks of sick leave, then 15 weeks of maternity leave, then 35 weeks of parental benefits. So a total of 65 weeks of paid benefits. The premiums and benefits are determined by your income as reported on your most recent taxes. My fiscal year runs from Jan 1 - December 31 so my rates are determined by my 2013 information. This is something to keep in mind and plan for as you would want your taxable income to be as high as possible so that your benefits are as much as they can be.

For the benefit of everyone, here's a financial breakdown:
My net (taxable) income for 2013: approx $30,000
EI Premiums I paid on my 2013 taxes: approx. $550
My weekly benefits: approx. $300 per week, total of $19,500

It would take me 35 years of paying EI premiums at the rate of $550 per year in order for me to break even, so for me this program was totally the way to go. If anyone has any questions about the specifics, please send me a private message and I'll try to help!

[torontokids]

Thanks for the update. I think the program makes sense for sure for most people for the following reasons

EI payments are quite small.
Most people when they leave home daycare they go back to work for a company where they would pay into EI anyways
Especially good for people who are doing daycare for the short term and plan to take the yr off then go back to the work place.

When it doesn't make sense
If you are a lawyer, Dr or other very high paid professional that opened a home daycare (or plan to go back to school to become one after daycare) to stay home with your kids. Your income will continue to get larger and larger and your EI is a percentage of what you make so this isn't a smart move.

That being said, I had not registered at the moment because I am unsure of my long term professional goals (I'm was a therapist before opening a daycare). If I go into private practice down the road or open my own business, this could be a significant loss for me.

[gravy_train]

Yes for sure, torontokids. The premiums you pay are capped at around $850 per year though so you will never pay more than that in premiums even if warranted by your income.

[playfelt]

I guess you also have to decide if getting only a portion of your pay for a full year is worth it in the sense that because you are home with your own child you can continue to breastfeed and snuggle and do all those things that moms are given a full year to do and still do daycare making more than the amount you would get on EI. And if you are starting to pay in very young and receive for your first do you not have to continue to pay in meaning unless you have several children and use the program again and again at what point do you no longer even break even.

[abcdaycare]

This is interesting to read as I am planning on having another baby within the next year. Hopefully timed for next summer. :)

Does anyone have any feedback who has now been through this?