Paying into EI

[Mamma_Mia]

Hello!

I think I remember reading someone mention that they paid into EI so that they can qualify for some sort of a Maternity Leave/EI.....

Anyone have more information on this?

Please & Thank you!

[Inspired by Reggio]

http://www.servicecanada.gc.ca/eng/s..._workers.shtml

DO LOTS OF RESEARCH ON THE RULES OF THIS!

If you are planning on being self employed long term it would likely be CHEAPER to just SAVE UP ... the premiums you have to pay as both employer and employee are HUGE and you only get paid 55% of your 'taxable income' which well for us is MINIMAL to begin with so it would not be hard to save up 55% of that on your own

[Inspired by Reggio]

In 2012, for every $100 you earn, you will need to contribute $1.83 in EI premiums up to a defined maximum—the same amount that employees pay. This means the most you will pay in EI premiums for 2012 is $839.97.

So for math examples .... if your taxable income is around the $12,000 - $15,000 mark after your expenses you would be getting only $6600 ~ $8200 in mat leave benefits for the course of a year which sounds awesome for sure.... however my understanding is that once you opt IN to this EI plan for self employed people you cannot opt OUT so if you are planning on being self employed for the next 10-30 years you will wind up paying at LEAST 8399.70 in premiums so way more than you get 'out' of the program and well up to a total of $25,119 in premiums for that measly $6600 you got way back when and that is assuming RATES do not go up on you over the course of the years which you know they will cause they have consistently been going up!

Seriously IMO if I were planning on having a baby I would put 1 child's FEES away a week for the nine months of my maternity leave and FUND my own maternity leave ... and than you can put your $900 a year away for the next 10 - 30 years of your working life and fund your RETIREMENT plan earning compound interest and so forth on that savings!

[Mamma_Mia]

Thanks for all the information Reggio!!

Lots of valid points for sure!

[Inspired by Reggio]

Yup welcome ... so are you guys already expecting or just in the discussion planning 'what if' stages?

[Mamma_Mia]

10 weeks along and super excited!!

[Inspired by Reggio]

Congrats

[Momof4]

We already knew that you were having a baby but I think it's great that you are going to look into EI and a proper mat leave rather than just taking off a few weeks and going back to work with a tiny newborn. So many caregivers try to do that instead of taking the time to take care of their own health. We have to survive financially though don't we?

[Daycare123]

I totally agree with Reggio. After having my daughter we started putting away money - planning for another maternity leave. It really made more sense-this way I know how much I will have and can make my own budget. I wouldn't like to be unable to opt out!

[Inspired by Reggio]

Agree Daycare123 .... I think for me my concern is that you have to pay into it for a WHOLE YEAR first before being able to make a claim ~ so it would not even work for poor Mamma_Mia this time anyway since she has already conceived and does not have a year to invest before her maternity leave arrives

Than assuming you are planning ahead type and have that full year invested in the program before you 'need it' when you do want to use it your eligibility is based your previous tax year only ... so since our business has ebbs and flows or feast or famine years where you are either full and turning people away or it is dry as the desert out there and so if that year SUCKED and you had open spaces and so forth your 'benefits' would be the 55% of that extra tiny sucky years income even if the years prior you had had AWESOME years being full and so forth

Also worth looking into having your own 'disability' insurance and if the premiums on that would be 'more or less' than the EI one and whether having a baby would be covered under 'short term disability preventing you from working' at least for the 6 week 'recovery' time of having had a baby or c section and so forth ... many of them come with a 'investment' pay back AKA if you never USE the plan when you decide to close it out you can buy back a portion of your premiums to transfer to an RRSP or what not ... personally I would be more inclined to do THAT than invest in a government run program!