Some things expectant parents must keep in mind

The arrival of a new baby is priceless. But soon-to-be parents need to be mindful of the big financial implications that come with a wee one. To prevent money woes from keeping you up at night — Melissa

Leong outlines five must-know things for anyone preparing for maternity and parental leave.

1.

The Canadian government will offer new parents support. Moms, you get up to 15 weeks of employment insurance maternity benefits. Meanwhile, moms and dads are entitled to take or share 35 weeks of EI parental benefits. How much do you get? It depends on how much you make. For most, and if you’re eligible, EI represents 55 per cent of your average weekly earnings, up to a maximum of $537 per week (you’ll hit the maximum if you earn $50,800 or more a year). Apply for EI right after you stop working because you could risk losing your benefits if you wait more than four weeks to apply. Also, there’s a two-week waiting period before any benefits are paid. Before baby comes, start saving and practise living on a reduced income. 2.

If you earn anything while on leave, the Canadian government will take its money back. If you work while receiving EI maternity benefits, the government will deduct the money you earn dollar for dollar from your benefits. If you work while receiving EI parental benefits, you can earn up to $50 per week or 25 per cent of your weekly benefit (whichever is higher) before any deductions are made. But, until Aug. 6, a pilot project is in place, Working While on Claim, where you’re able to keep 50 cents of your benefits for every dollar you earn, up to 90 per cent of the weekly earnings used to calculate your EI benefits.

3.

Your employer may top up your EI. According to Statistics Canada, the average company top-up in 2008 lasted an average of 19 weeks, with average weekly payments of $300. “(Your employer) may say, ‘We’ll top up your EI benefits to a maximum of 70 per cent of your salary,’ as an example,” Ramona Packham, owner of RP HR Consulting, says. You may also want to continue paying into your pension and your group insurance policies for health and dental coverage.

4.

Savings will come in super handy if your employer or the government want cash back. Thinking of staying home with baby after your leave ends? Or got pregnant while on maternity leave? Some companies require that you return and stay employed for a certain period of time after your leave, or else you must pay back the top-up. That’s thousands of dollars that you’ll need to have ready. Also, be aware that if you’re getting a top-up, you may owe taxes when your maternity leave is over.

5.

New parents can get carried away, so determine what you can spend on one-time purchases and regular expenses. You might also want to get your name on a waiting list for a coveted daycare space and calculate how much you can afford for child care. Finally, don’t forget to include savings in your budget. Consider putting your Canada Child Benefit into an RESP. You can receive up to $500 a year in federal government grants when you contribute the $2,500 annual maximum (the federal government matches 20 per cent of the first $2,500 contributed each year for eligible children) to a lifetime limit of $7,200.