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The Daily. Monday, October 25, 1999

Employment Insurance support to families with newborns

After increasing at the onset of the decade, income support payments through the Employment Insurance (EI) program to families with newborn children have remained essentially unchanged during the rest of the 1990s, according to a new analysis of EI data. This support is addressed to those families in which the mother had sufficient work experience to qualify for the program, with the result that about half of families received some benefits.

The total income support given to families qualifying for benefits increased by over 70% between 1990 and 1992 with the introduction of parental benefits, and has been constant at about $7,000 since.

The fraction of mothers of newborns receiving income support through EI grew steadily during the 1970s and 1980s, but stopped growing during the 1990s. In 1998, about 49% of families with newborns qualified for and received maternity benefits, essentially the same proportion as in 1989.

Last year, the EI program paid an average of about $277 a week in benefits to those families who qualified, down slightly from $297 six years earlier.

EI support rose sharply with the introduction of parental benefits

EI support to families with newborn children increased sharply with the introduction of parental benefits in 1990 to supplement maternity benefits, which had been introduced in 1972.

Throughout the 1970s and 1980s, maternity benefits collected by families who qualified were relatively constant between $3,700 to $4,000 per claim.

The introduction of parental benefits resulted in a substantial increase in the amount of money paid. In 1990, the EI program paid an average of almost $4,000 in maternity benefits to mothers who qualified. Two years later, with both maternity benefits and parental benefits in force, the program paid on average about $6,800 per claim, a 73% increase. However, since that time the average amount of benefits has shown no sustained trend, varying between $6,600 and $7,600.

Benefit payments have been roughly constant during most of the 1990s despite the fact that the average number of weeks of maternity and parental benefits paid per EI claim actually increased. In 1998, EI payments lasted an average of about 24.5 weeks per claim, compared with 21.9 weeks in 1991.

Note to readers This release describes trends in income support that families with newborn children received under the Employment Insurance (EI) program from the mid-1970s to the late 1990s. It also explains changes in levels of support during this period. The EI program provides support to families experiencing an interruption of earnings because of the birth of a child through three types of benefits: maternity benefits, parental benefits, and adoption benefits. Maternity benefits were first introduced in 1972. Parental benefits came into effect in 1990, and adoption benefits in 1984. All income figures are expressed in constant 1998 dollars, using the Consumer Price Index to adjust for inflation.

Mothers of newborns can collect maternity benefits for up to 15 weeks if they meet the eligibility requirements of the program. Either parent can collect another 10 weeks of parental benefits. If the child suffers from a physical, psychological or emotional condition that requires extended care, parental benefits can be increased to 15 weeks.

Steady growth in coverage of maternity benefits has stopped

The proportion of mothers with newborns who were eligible for and received maternity benefits increased steadily from 30% in 1976 to a peak of 53% in 1992. During the 1990s, however, this steady growth in coverage has halted. In 1998, the proportion of mothers of newborns receiving maternity benefits was 49%, the same as in 1989.

Income support to families with young children through the EI program is directed to those in which the mother was actively engaged in the labour market before birth. Currently one half of families receive no support for their newborns through this program; the other half receive an average of about $6,800.

This halt in the growth of coverage reflects the labour market activity of women. The growth in the labour force participation rate of women of child-bearing age follows the same pattern as the growth in the proportion of new mothers eligible for maternity benefits. Participation rates increased throughout the 1970s and 1980s, but flattened out during the 1990s. Slightly less than 60% of women of child-bearing age were active in the labour market during 1976. This participation rate increased in every year from 1976 to 1990. However, during the 1990s there has been essentially no change, with the participation rate remaining at just over 75% throughout the decade.

Average weekly benefits decline slightly during the 1990s

Average weekly benefits collected by eligible families have decreased slightly since 1992. This has been a factor in the standstill in the amount paid out in maternity and parental benefits for each claim.

The average benefit rate varies with the business cycle, changes in rates of pay, and the composition of those applying for benefits. As a result it declined from a high of $305 per week in 1976 to a low of $257 in 1982 during the recession, then recovered to $297 in 1992. However, by 1998, these benefits had dropped again, back to $277 a week on average.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Miles Corak (613-951-9047), Family and Labour Studies.

Employment Insurance support to newborns

1976 to 1998