EI Approved

My Maternity Leave officially started on January 21st and I'm so pleased to see that my employer issued by ROE quickly and my EI claim has already been approved!  I was planning on having to wait at least until beginning of March due to previous experiences with Employment Insurance - but this is going very quickly!

Once I get my first payment (I'm thinking Feb 8th likely), I'll submit that to work and my 70% top-up for 15 weeks will start which is a benefit that my employer pays for.

Everything is coming together....just waiting for this baby to arrive.

Money on Leave

The other day I mentioned that I've stripped back our budget to the bare bones in anticipation of waiting for Employment Insurance when I go on maternity leave.  We'll have several changes to our financial picture over the next 12 months or so. 

I'll be taking Maternity/Parental Leave for 6 months, then taking 3-5 weeks vacation (pending approval).  When I start vacation, Jordan's going to start his Parental Leave for the next six months.  The plan is to overlap for the month of August when baby is six months and Little Man is 3.5 years and really spend time as a family just connecting.  It will also serve as a transition before I go back to work full time.

Here's a rough ideal of the iterations we'll go through:

1. Prior to Maternity Leave - full salary for Jordan & I 
2. Maternity Leave Starts (wait for EI) - Jordan full salary, $0 for Jessie
3. EI starts - Jordan full salary, ~$500/week for Jessie (max benefit of $547 less taxes)
4. Work top-up starts - Jordan full salary, Jessie work tops up EI to 70% of salary for 15 weeks ~$1,700/month
5. Work top-up stops - Jordan full salary, ~$500/week for Jessie (max benefit of $547 less taxes)
6. Jessie Vacation Starts, Jordan Paternity Leave Starts - full salary Jessie, $0 for Jordan
7. Jordan EI Starts - full salary Jessie, ~$500 for Jordan
8. Jordan back to work - full salary Jessie, full salary Jordan

phew.

8 times.  8.

Employment Insurance...Coming to an End

It's hard to believe it's been almost a year since I started my Maternity Leave.  I had left work two weeks before my due date, and went two weeks over due.  So my leave ends with Little Man is just shy of 11 months old.  When I say left work, most of you know that it wasn't a mutual separation.  I was advised when my leave was starting that my department was shutting down and I wouldn't have a job to come back to.

So!

When my EI stops mid-September, my severance kicks in.  I haven't looked at the paperwork for a while, but it's about six months of my old salary.  I'm really looking forward to that - to help pay off some of the over runs of the renovations and to top up some of our savings funds.  It will feel good to go into the New Year on the right foot and that sure will help.

I've started looking for jobs in our new town - the first fell through, but I'm excited about a couple more contract opportunities that are on the horizon.

Wish our little family luck as our financial landscape changes, changes again, and changes some more.

EI Salary Top Up

I'm so happy to be writing two such positive posts in a row.  I checked my online paystubs this morning and found that my employer paid employment insurance top up has been approved and processed.

A small bonus here, is that when I did my calculations earlier in the year for planning - I forgot that I had already maxed out my CPP/EI premiums for the year - so the benefit is about $65/pay more than I thought it was going to be for the rest of 2015.  Woohoo!

If you read yesterday's post, you know that as part of my employer paid benefit maternity/parental leave benefit package, once approved for EI, I'm eligible for a top-up.  They 'top-up' my EI benefit to 70% of my pre-leave salary for 15 weeks.  Normally, in exchange for this benefit you have to guarantee that you'll work for them again for a minimum of 6 months after your leave of absence.  In my case, that requirement has been waived because of the termination.

So, 70% of my $78,750 salary is $55,125.   That divided by my employer's standard work week (1950) gives me an hour rate of $28.27.   My EI benefit (pre-tax) is $524 - to find an hourly rate I'll multiply that by 52 weeks and divide by 1950 hours which gives me $13.97/hour.

The difference between the two is $14.30 - so I take that and multiply it by 75 hours (two week pay period) to get my bi-weekly benefit of $1,072.19.  After taxes, we're left with just over $970 every two weeks for 15 weeks.

So yay!   My next project is to update my budget sheets, and work out turning our savings plans back on.

Employment Insurance (EI)

It's finally come through!  Woohoo!

My recent employer took their sweet time to process my maternity leave, and didn't issue my Record of Employment (ROE) - which is required to get EI benefits - for five weeks!  Yes, yes, legally they are required to submit it to Service Canada within 5 days - but they didn't.  It's all sorted now, but I was getting super stressed out for a couple of weeks.

I've got my first EI payment and it was a titch higher than I had estimated a few months ago when I was building ur maternity leave budget.  I got the max benefit which works out to $464/week after taxes.

For my non-Canadian readers, Employment Insurance is a federal benefit that all employees and employer's pay into with premiums that are deducted from your pay/managed through your employer.  You can apply to receive EI benefits for a number of reasons, including maternity/parental leave.  You have to have worked to be eligible to receive benefits in the program.  The basic rate for calculating benefits if 55% of your average weekly earnings to a maximum of $49,500 - that means you can get a maximum of $524/week.  This is taxable income, and it looks like I'm being deducted $60/week - so my net is $464.

I've now submitted my application for employer top-up benefits, and should see that on the next regular pay schedule.  Employer paid top-ups are 100% at the employer's discretion.  My employer tops up my EI benefit to 70% of my pre-leave salary for 15 weeks to help with the transition.  To be eligible for this benefit, I first had to get approved for EI (otherwise, there is nothing to top-up).

I'm looking forward to being able to start some of our savings plans up again now that we have this bit of extra cash flow coming in.

Job Loss

I've written about it before, about Employment Insurance, about preparing for the worst - but I've never actually experienced it.

Many of you know that things are pretty rough in Alberta right now, with continued uncertainty around the oil & gas industry combined with mining - many organizations are struggling.  My employer is no different.

I've officially been let go.  It's a pretty strange sort of feeling.  I have known that things weren't great for a while now, but I had been hopeful that I would make it through.  I did in the 2008/2009 recession, and I made it through a variety of restructures, but this time it just wasn't in the cards.

So, here I am, starting my maternity leave a few weeks early, trying to figure out what to do with myself until baby arrives sometime next month.  I've been pretty busy my first week with setting in to our place in BC, and generally getting ready for baby - but I imagine as the days go by I'll start to get a bit bored.

We'll be alright financially, my employer has treated my really fairly and my maternity leave benefits won't be interrupted.  I've got a decent severance package which will, when combined with my Mat Leave, will take me into early 2017 as it doesn't start until mat leave ends.

I'm hoping to get writing a bit more frequently again, though I'm not sure how interested folks are in reading about baby stuff, but we'll see how it goes.

Income on Leave

In the last few months I've gone through countless iterations of our budgets for when I'm on maternity leave, for the new house, for carrying both mortgages for short time until our Alberta house sells....sooooo many budgets.

Before I delve into the current one, I thought I would share our income situation.

With Jordan's new job in BC, he got a bit of a raise.  Of course income taxes, benefit deductions and the like are all different too.  This has resulted in a larger than expected change to our net take home for him (woohoo) - a little more than $1,600/bi-weekly.

I'll be receiving my regular salary until I go on maternity leave in October - so we're banking a lot of that between now and then - but I will have benefits while on leave.

I plan on taking the full leave that I'm eligible for, which in Canada is 52 weeks.  For 50 of those weeks, I will receive Employment Insurance.

In Canada, Employment Insurance benefits is 55% of your average insurable weekly insurance, up to a maximum.  In 2015 that maximum is $49,500.  So, because my annual salary is larger than the maximum, and I have contributed fully to EI, I will receive the maximum benefit amount of $524/week.  Of course, there are income tax deductions on this.  I've used the Canada Revenue Agency's Salary Calculator to determine that my benefit will work out to be about $440/week or $880 bi-weekly.

I should also mention that my employer provides a generous top up.  They will top up, or supplement, my EI payment to 70% of my salary for 15 weeks.  This is an awesome benefit to help you transition down to EI benefits.

I'll also be eligible to apply for the Canada Child Benefits which include:

• Canada Child Tax Benefit (CCTB)\
• Universal Child Care Benefit (UCCB)
• GST/HST credit, and
• Any other applicable provincial programs.

Phew!  I think I'll save writing about those for another day.

CPP & EI Max Out

Last year I wrote about maxing out my CPP and EI contributions and I was pleasantly surprised when I realized that my Christmas budget was going to get a significant boost at the end of the year.

A lot of people in my office start talking about their deductions tapering off around June/July - to which i think those people must make about double what I do! I thought I'd do the math for this again to see when the CPP and EI contributions will stop this year.  I got a really great raise back in April so I'm hopeful that it will make a big difference (can you tell i'm writing this before doing the math).

on to the math...

So...this is awesome!

In the last pay in September i'll see a $40.39 increase on my pay and then On my October 28th pay I'll see a net increase of $146.45 - hizzah!!!

You know what I'm going to go do now? I'm going to go update my monthly budgets!

CPP & EI - Do you max out?

Last year, in December, I was pleasantly surprised on my last pay of the year with a bit of an increase.  It wasn't much, but it had me interested enough to look into it a little deeper.  As it turns out, I had maxed out my CPP contributions for the year.  As I got a raise this past April, I thought that I would hit the maximums sooner rather then later...so I did a few calculations.


Before I get into them, perhaps I should give a bit of background on CPP & EI and what the maximums mean for those folks who have no clue what I'm talking about.

Canada Pension Plan (CPP)

The Government of Canada established the CPP program in 1966. It is an earnings related social insurance program that provides basic benefits when a contributor to the plan retires or becomes disabled. When contributors die, the Plan provides benefits to their survivors. The benefit is meant to supplement an individuals personal savings, investments and retirement portfolio. The employer is required to contribute the same amount of CPP that is deducted from an employees pay to a maximum amount every year.

A CPP retirement pension is a monthly benefit paid to people who have contributed to the Canada Pension Plan. The pension is designed to replace about 25% of a person's earnings from employment.  Every employer is required to deduct CPP contributions from an employee's pay if that employee meets certain requirements (age, is in pensionable employment, is not currently receiving CPP benefit through retirement) to the annual maximum, which can change from year to year.

Employment Insurance (EI)

Employment Insurance provides temporary financial assistance for unemployed Canadians while they look for work or upgrade their skills.Typically, you will not be approved to receive an EI benefit if you quit or are fired your job with cause.  If you are laid off, this benefit is available for you to apply for.

Canadians who are sick, pregnant or caring for a newborn or adopted child, as well as those who must care for a family member who is seriously ill with a significant risk of death, may also be assisted by Employment Insurance.

Every employer is required to deduct EI premiums from their employees insurable earnings on every dollar up to the yearly maximum. All employers must also contribute 1.4 times the EI premium withheld for each employee.

Back to the Math

I will max out my EI contributions on my second October pay.

I will max out my CPP contributions on my first November pay!

So, what does that mean?   It means that I'll net an additional $380.22 by Christmas.  

Combine that with savings from my recent insurance premium deduction, and we're not looking to shabby!

My EI Budget

I dediced to mock up a budget in case I were to get laid off. I'm assuming a few things:

1. I would qualify for EI


2. I would get at least 2 weeks severance ($1700 less taxes)


3. My severance would pay off my credit card entirely (which it would if you include the banked OT I have and vacation time owed to me).


4. I would get about $380/week after taxes in EI payments or $1500/month (see below)


5. I would have enough in my emergecny fund to get me through the first month. I'm almost there, I would need another $400.

There are some things that just wouldn't change. My Rent, utilities, car insurance, cell phone and student loan debt. However; I could probably lower my student loan payments.

If i could manage, I would not want to stop putting money away into savings - however; it would be significantly less (expect my house fund, I beleive I mentioned before that's non-negotiable for me at this point).

I would have about $300/month or $75/week for food, personal & other. Could be doable.

I think it would be alright to survive on that because I know that Jordan would help out wherever he could.

Do you have an EI budget? Do you think mine is realisitc?

Unemployment Insurance - Would I qualify?

Regarding the ‘fear’ of unemployment post the other day – I decided one way to combat that, is to know what would happen should I lose my job. If I already have a plan, a budget, and know what’s going to happen – then I will be more prepared and more calm.

I didn’t realize when I started writing that this post was so long.

So to be eligible for regular benefits (EI) I must show that:

• you have been without work and without pay for at least 7 consecutive days
• in the last 52 weeks or since your last claim ( called the qualifying period), you have worked for the required number of insurable hours

Okay, so what is the required number of insurable hours. Apparently, in Canada, this depends on what ‘economic region’ I am in.

When you show that you have at least 490 hours related to employment in the labour force during the labour force attachment period (the year prior to the qualifying period) you will need between 420 and 700 insurable hours (depending on my economic region – see below) to qualify for regular benefits. Otherwise, you will need a minimum of 910 hours to qualify regular benefits.

The Required number of hours for my region if I have worked at least 490 hours related to employment during the labour force attachment period is 665 hours.

Now, thankfully, in my case, I have worked full time for the last 52 weeks – which means I have about 1900 of employment hours. If I were to lose my job at this point – I wouldn’t have to worry about the labour force attachment period. That said; I would probably meet the minimum hours requirement of the labour force attachment period – although I was a student so it could be sketchy.

Okay – so I’ve learned that If I lose my job, I need to be unemployed and without pay for 7 consecutive days, and I know that I have worked enough hours to qualify for EI.

Next thing I learned was that:

• You must serve a 2-week unpaid waiting period before your EI benefits begin to be paid. Generally, this period is the first 2 weeks of your claim. This is like a deductible for any kind of insurance.


• If you have provided all the required information and if you can be paid EI benefits, your payment will be issued usually within 28 days from the date of filing your claim. If you cannot be paid, we will notify you of the decision made on your claim.

What that means is that you have to wait about a month to SEE ANY MONEY, and it will only be about two weeks worth of pay as you lose the first two weeks in the unpaid waiting period.

Okay.

So I would have to have one month’s expenses (at a minimum) to hold me over. Which I do! That’s great ($1000 in my E-fund currently).

But how much money would I get and for how long? Well you can receive EI in my economic region for 20 to 43 weeks!

They have a weekly benefit rate, which have a lot of different rules if you are low income or have children. For me the following would apply:

The basic benefit rate is 55% of your average GROSS insured earnings up to a yearly maximum insurable amount of $42,300. This means you can receive a maximum payment of $447 per week. Your EI payment is a taxable income, meaning federal and provincial or territorial, if it applies, taxes will be deducted.

This is how the payout is calculated *Note they always use the gross amounts*

1. We look at the total earnings you have been paid in the last 26 weeks ending with your last day of work.


2. We take into consideration the number of weeks in which you have worked in the last 26 weeks.


3. We determine the unemployment rate in your region and the minimum divisor that applies at that unemployment rate.


4. We determine your average weekly insured earnings by dividing your total earnings in the last 26 weeks by the greater of: a) the number of weeks you have worked in the last 26 weeks; orb) the minimum divisor number.Important: The divisor cannot be less than 14 or greater than 26.


5. We then multiply the result by 55% to obtain your weekly benefit.

Using my after tax income this is my calculation:

1. Total GROSS earnings in last 26 weeks = $22,500
2. Number of weeks worked in the last 26 weeks = 26
3. Current minimum divisor that applies (see above image of a spreadsheet) = 21
4. Determine average weekly insured earnings
a. $22,500/26 = $865.38
5. $865.38 X 55% = $475.96

So on the surface, my weekly benefit would be $475.96 However, I’ve already said that there is a maximum benefit of $447/week. So that’s what I would have to budget with.

Weekly Benefit = $447 (less taxes)

Which according to an online calculator would be about $380 after tax/week.

Do you know if you would qualify for EI Benefits, how much would you get?

Note:
I got most of this information from the Service Canada website.