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Friday, March 21, 2003

Benefiting from extended parental leave


Since the extension of parental benefits two years ago, qualifying mothers are staying home longer with their newborn infants, and more fathers are claiming benefits. According to a new study, mothers receiving benefits increased their time off work from 6 months to 10.

Amendments to the Employment Insurance Act in December 2000 increased parental leave benefits from 10 weeks to 35 weeks, effectively increasing the total maternity and parental paid leave time from six months to one year. In addition, the threshold for eligibility was lowered from 700 to 600 hours of insurable employment.

This study, using data from the Employment Insurance Coverage Survey, a supplement to the Labour Force Survey, showed that in just one year, the amendments had a major impact on new mothers and fathers.

A monthly average of 4,900 parents who would not have qualified under the old program received parental benefits in 2002. These people - 4,700 mothers and 200 fathers - received benefits after having worked between 600 and 700 hours in the year before they requested benefits.

The proportion of all new mothers receiving maternity or parental benefits increased from 54% in 2000 to 61% in 2001. The 39% of mothers in 2001 who did not receive birth-related benefits consisted of those who were not in the labour force (23%), were paid workers who were ineligible or did not apply for benefits (12%), or were self-employed (5%).

Note to readers

This release is based on an article that examines the labour market behaviour of a sample of employed mothers who gave birth before and after the parental benefit amendment in 2000. The analysis covers births in 1999 or 2000, and 2001. Complementing this article is a note providing some statistics on the use of the new benefits.

In December 2000, Bill C-32 amended the Employment Insurance Act regarding paid parental leave. Starting December 31, 2000, paid benefits for employed parents increased from 10 to 35 weeks. To qualify, parents must have worked for 600 hours in the previous 52 weeks, down from 700.

The 35 weeks of benefits can be taken by one qualifying parent, or split between both qualifying parents, with only one waiting period required between them. The benefit entitlement remains at 55% of average insured earnings, up to a maximum of $413 per week.

Maternity leave benefits, administered in the same way as parental leave, can be claimed for 15 weeks by women only, and up to eight weeks before the birth. The combination of maternity and parental benefits now enables parents to receive up to one year of paid leave to care for their infants.

Data for this study came from the Employment Insurance Coverage Survey, a supplement to the Labour Force Survey. The sample included roughly 1,350 mothers with children less than 13 months of age in both the 2000 and 2001 surveys. However, almost 500 of those interviewed in 2001 had given birth or adopted their child in 2000 and were, therefore, excluded from the analysis. Beneficiary statistics are compiled from administrative data provided by Human Resources Development Canada.

Some of the events analysed, such as returning to work, are based on both actual and intended behaviour.

Time off nearly doubles for benefit recipients

Over 80% of all employed mothers in 2000 and 2001 returned or planned to return to work within two years. However, only those receiving maternity or parental benefits substantially extended their stay at home following the parental benefit amendment.

The median time at home for mothers with maternity or parental benefits increased from 6 months in 2000 to 10 months in 2001. Employed mothers not receiving benefits took about 4 months off work in both years.

Although the majority of mothers with benefits in 2001 took nine or more months off work, one-quarter were re-employed within eight months. Significant factors linked with a shorter leave from work included a father's participation in the parental benefit program, a mother's job being non-permanent, and low employment earnings.

If fathers claim some of the 35 weeks of benefits, mothers would have less than a year of paid leave for themselves, and thus a shorter stay at home.

Also, despite receiving benefits, mothers with non-permanent work were almost five times more likely to return to work in less than nine months than those with a permanent job. Similarly, lower earnings were associated with a quicker return to work. For example, those returning within four months had median earnings of $16,000, compared with $28,000 for those returning between 9 and 12 months.

One in 10 dads take formal leave to care for a newborn

Not only were newborns receiving full-time care by their mothers for longer, but many more children had a father at home for some of the time as well.

The average number of fathers receiving parental benefits each month reached 7,900 in 2002, five times more than the average of 1,600 two years earlier.

In 2000, only 3% of fathers claimed or planned to claim paid parental benefits. By 2001, this proportion had more than tripled to 10%. This is not only a statistically significant increase, but a socially significant one as well.

This claim rate for fathers moves Canada ahead of many other countries, but still leaves it considerably behind those that offer non-transferable leave to fathers. In Norway, for example, almost 80% of fathers take parental leave.

Previously, fathers were required to serve a two-week waiting period if they wished to share benefits with the mother, who also had to serve a two-week period at the beginning of her claim for maternity benefits. The father is no longer required to serve the second waiting period.

The articles "Benefiting from extended parental leave" and "New maternity and parental benefits" are available in the March 2003 online edition of Perspectives on labour and income, Vol. 4, no. 3 (75-001-XIE, $5/$48).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Katherine Marshall (613-951-6890;, Labour and Household Surveys Analysis Division. For more information on Employment Insurance data, contact Gilles Groleau (613-951-4091;, Labour Statistics Division.

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Date Modified: 2003-03-21 Important Notices