The new EI parental sharing benefit means more flexibility for parents


New parents get to share some amazing moments: babies first words, babies first steps and babies first tooth. Sometimes, parents share a little too much and you have to unfollow them on Instagram. But many parents aren’t aware that they can share tax credits between each other when it comes to their new family member!

The new 2018 federal budget amended the Employment Insurance (EI) parental sharing benefit, allowing parents to take up to five additional weeks of time off, starting in March 2019 after the birth or adoption of a child. This comes three months earlier than before, in an effort to provide greater flexibility to families.

Why the change? According to Employment and Social Development Canada (and good old fashioned common sense), when women have equal opportunities to succeed, they are powerful agents of change that can help improve the quality of families and communities. This is a big step towards promoting greater gender equality at home and in the workplace.

You must now be wondering if you’re eligible. Well, you’re eligible for the EI parental sharing benefit if you meet the following criteria:

• Parents with children born or placed for adoption on or after March 17, 2019 will be eligible for the benefit.
• Parents including same-sex and adoptive parents, are eligible for this credit only if both new parents share the time at home with the new baby.
• Parents selecting the standard duration of parental leave could receive up to 40 weeks of parental benefits (an increase from the current 35 weeks).

Parents selecting the extended duration of parental benefits could receive up to 69 weeks of parental benefits (an increase from the current 61 weeks). A wonderful reason to exercise a little teamwork, right?

In addition to the Employment Insurance (EI) parental sharing benefit, parents have another reason to celebrate. The Working While on Claim rules now apply to sickness and maternity benefits. This one can get a tad complicated, so stay with us. Some women on maternity leave choose to return to work early, before their EI benefits end. As a result, it means an adjustment to how much they receive in EI benefits. A claimant receives 55% of their weekly salary as their EI benefit, but when they return to work early, they must subtract 50 cents of each dollar they earn. This amount will then be subtracted from their overall EI benefit.

For example: Before mat leave, Michelle earned $600/week, and her EI benefit is 55% of this, so she receives $330/week while on maternity leave. She returns back to work part time, for a total of $400/week salary. She needs to subtract 50 cents of each dollar earned ($200) from her EI benefit. Now her EI benefit is $130/week, plus she keeps her weekly salary, so her total earnings will be $530. Still with us, right? If you’d like to learn more about how the Working While on Claim rules work, the CRA website includes more examples, an outline of eligibility and information about how you can get started.

If you’d like to speak with a tax expert about the tax implications of the new EI parental sharing benefits or Working While on Claim, drop by an H&R Block office near you.