Ask The Readers – Cut Short Maternity Leave To Save Money?

by Mike Holman

I recently received an email from a reader called Ermyntrude*.   She is having a baby (congrats) and is worried about the loss of income resulting from an extended maternity leave.

We are trying to plan our finances so I’ll be allowed to take a full year off but, since I earn at least double what my husband does, we might have to get creative to make that happen.  We are good savers, but the large disparity in our incomes concerns me and I am going to prepare myself for a 6-month mat leave after which time, maybe my husband could take his 37 weeks parental leave.

We discussed a number of EI-related rules*, but her big concern was having to shorten the mat leave.

I was sort of thinking I would be back to work after 6 months or so because I think most mat leave top-up periods are only 6 months (though if I could negotiate the full year, I sure would try!), and because my salary is considerably higher than my husband’s, we might find things a bit tight after the top-up is finished.  Ideally, though, I’m hoping that if we save enough by trimming costs and diverting a portion of my current RRSP contributions to more liquid savings vehicles (e.g. TFSA, other savings account once TFSA maxed), we might be able to swing it….more number crunching ahead!

My answer

If you want my honest advice – take as much time as you possibly can and don’t worry about the money.  You won’t regret it.

Readers – what do you think?  Should Ermyntrude take a year off and deal with the money later?  Or just take 6 months and keep the family finances on solid footing?

*Names have been changed for privacy.

[edit]
One of the rules we discussed is the most commonly misunderstood rule about maternity and parental leave in Canada – Parents do NOT have to share the time off.  Mommy can take a year off, Daddy can take 37 weeks.  They can do it at the same time or not.

Read my post about maternity and parental leave rules in Canada.

EI( Employment Insurance) payments on the other hand, have a total 50 weeks worth of payments which can be paid to one parent or shared between two.

Reader Mark sent me an email this morning asking why parents with twins aren’t eligible for 50 weeks of EI each?  Good question.

[end edit]

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