Shorter Mat Leave Financially Better?

[ebhappydc]

Had an interview last nite for spot in spring and parents were debating going back to work after 18mnths mat leave or 12 months,. Spring would be 12 months. They have to make that personal decision on their own of course but I thought later that going back early doesn't get you much farther ahead financially does it? Mat leave you get about 60% salary but no childcare fees vs full salary but paying childcare. Is it even worth going back early then (I pondered to myself!)... Tx

[Suzie_Homemaker]

Mat leave provides about 55% of regular income but it has a life line. The extended mat leave was just an extension of time. There's no additional money. I am not clear of if the additional 6 months is without income entirely or if the payments which would normally be made over 12 months are spread over 18 months of smaller income but everything I've read has been clear that it's only additional time on the original income.

The net effect is that any parent opting for 18 months is doing so with ZERO income for the final 6 months and so of course, any return to work at the 12 month mark absolutely does get the parent(s) further ahead. They have full income for that six months vs nothing for 6 months.

Of course the benefits for having additional time with a new child are priceless but since this question is about the financial implications then every single parent who returns to work at the 12 month mark is 100% ahead, even with a child care bill compared to staying home, earning nothing.

The average price of child care in the Maritime provinces is $35 to $40 a day. The average min wage is about $11.00 an hour. Lower income households can apply for subsidy which lowers their child care costs. Higher income earners who don't qualify for subsidy of course aren't on min wage.

I imagine for city's where child care costs $60 a day then there's a balance of at what point child care fees wipe out income for lower earners but most people are not on min wage and paying the full $60 child care costs themselves.

In answer to the question - going back to work at 12 months and having full income from whatever that work may be, is always better financially that staying home for an additional 6 months and having zero income.

In terms of is it worth returning to work when there's a new cost for child care fees - that's entirely individual because it's about income level and child care costs in their area.