Friday, March 04, 2011

Things They Should Invent: compressed parental leave

Maternity and parental leave currently pay 55% of your income up to $468 a week, and give you up to 15 weeks of maternity leave and 35 weeks of parental leave.

It is possible that this might not be enough money to support you in your year off work. If you're renting in Toronto and your apartment is big enough for your kid to have their own room, it might not even be enough for rent. I'm sure some parents have to go back to work earlier than they'd like simply to avoid running out of money.

Obviously the ideal solution would be to increase the government benefits to a more realistic level, but in the interim here's a zero-cost solution: allow new parents to compress their maternity and parental leave, so they get more dollars per week over a period of fewer weeks.

For example, the total maximum maternity and parental benefits payable is $468x50 weeks, which totals $23,400. For mathematical simplicity, let's say you've determined you need $1,000 a week. Under this proposed system, you'd be able to draw $1,000 a week for 23.4 weeks. So instead of getting a year off with insufficient money, you can have just over five months off with sufficient money. That would be far more useful!

This is beneficial to new parents because they can still take time to be with their new child, but they wouldn't have to worry about money. It would cost nothing to the government (it's possible they might even save a tiny bit of money by not having to send out cheques/direct deposits and do paperwork for as many weeks), and it would also be beneficial to employers because their employees might come back from parental leave earlier. Better for everyone, no cost, no downside.

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