As a doctor, it’s never easy to know the “right” time to start a family: how will you plan a pregnancy or adoption, take time off with a newborn, and still care for patients and a career?
As a first step to a more stress-free parental leave, we’ve gathered tips to help you plan family finances and find balance as a physician and parent.
1. Tally up how to fund your time off
A combination of resources may help fund your planned parental leave, so add up all possible options:
Employment Insurance special benefits for self-employed parents. As an independent business owner, you could opt to access Canada’s Employment Insurance special benefits for maternity and parental leave. To be eligible, you must register 12 months in advance and contribute Employment Insurance (EI) premiums to an annual maximum of $858.22 in 2018. Note that the maximum benefit is currently $547 per week—perhaps not enough to meet your income needs. (In Quebec, the Québec Parental Insurance Plan (QPIP) covers all eligible residents of the province, including self-employed.)
Employment insurance. If you’re a medical resident or doctor in a salaried position, generally you are eligible for a range of employer- and government-sponsored benefits:
- If you have paid premiums into Canada’s EI program, you may qualify for pregnancy leave and parental benefits. For 2018, standard parental EI benefits pay a maximum of $547 per week for up to 35 weeks. An alternative option is for benefits of up to $328 per week for up to 61 weeks.
- If you are a resident of Quebec, the QPIP may cover up to 75% of your income (to a maximum of $1,067 per week in 2018) for up to 50 weeks.
As an employee, you may also qualify for supplementary payments, or “top-ups," to employment insurance through benefit plans or collective agreements. Ask your employer.
Your medical association member benefits. Provincial and territorial medical associations across Canada offer programs for physicians taking temporary leave for the birth or adoption of a child.
Some treat all doctors equally, paying for 17 weeks of parental leave, while others vary the payout depending on whether you earn a fee-for-service or salary, or have an alternative arrangement. Keep in mind that benefits may be reduced if you have income from other sources, including the EI program.
Consult with your regional association to find how much you may be eligible for, and when to apply.
Medical Association Members’ Maximum Weekly Parental Leave Benefit
The following weekly figures are for 2018, and are available for 17 weeks of parental leave:
- Alberta, $1,063
- British Columbia, $1,000
- Manitoba, $1,700
- Newfoundland and Labrador, $1,500
- Nova Scotia, $1,000
- Ontario, $1,000
- Prince Edward Island, $1,200
- Saskatchewan, $1,300
- Yukon, $1,000
Your personal savings. Practising physicians, like other entrepreneurs, typically need to save money to self-fund time away from work and cover baby-related expenses. One great way to save in advance is to regularly set aside a few dollars while you are still working, through automatic contributions. Instead of just saving in a regular bank account, you could consider a tax-free savings account.
Your corporation’s savings. If you are an incorporated physician, you could top up savings within your corporation to draw from later on. This can help to smooth out your income between high-earning and low-earning years, including during a maternity or parental leave. In those lower-earning years, while you are in a lower personal tax bracket, you can pay yourself from earnings that have been retained within your corporation.
2. Plan with your partner
Two parents can be more “resourceful” than one, if you coordinate benefits and financial resources as a family. Here’s how:
Divvy up leave time. If your partner or spouse is eligible for benefits under Canada’s EI program (or the QPIP in Quebec), or qualifies for more generous top-ups from an employer, consider how to divide up parental leave between you for the greatest financial benefit.
Lock down your insurance. It’s a good time to review your insurance coverage, if one or both of you have life and health insurance through an employer or have bought the insurance privately. Find out what you are covered for, such as health and dental benefits, and be sure to add your child as a beneficiary.
Give your family security. If you don’t already have them, create a will and powers of attorney for personal care and property (a mandate in Quebec) for yourself and your partner. If you already have them in place, update them. As parents, a will allows you to name a guardian to care for your child, if anything should ever happen to you.
3. Take care of business
Whether you work solo or as part of a group, there are unique financial considerations if your practice will still need to serve patients and pay for salaries, benefits, rent and equipment costs.
Cover your practice. Take into account the cost of hiring a locum to fill in during your parental leave. Locum rates vary depending on the type of practice, location and level of responsibility.
Set your timeline. Will you be away and out of contact until a certain date, formally keep tabs on work the whole time or return gradually? Could part-time work be a possibility?
Seek innovative arrangements. With more mothers in medicine these days, research suggests that women are leading the charge to find more flexible ways of working to balance work and caregiving responsibilities, according to a recent article in the Canadian Medical Association Journal.1 For example, it highlighted one Ontario practice in which seven family doctors split a government funding package designed for six physicians—allowing all of them to spend more time with their families.
4. Explore how MD can help
There’s more than one path to planning the details of a parental leave, and you don’t have to chart it on your own: Your MD Advisor can work out an income strategy and financial plan to prepare you and your family for that important period in your life.
An Action Plan for Parental Leave
Your planning for a worry-free parental leave
• Review personal financial resources, funding available through the EI program, and other top-ups available.
• Determine whether to share parental leave with your partner, if that makes sense for your lifestyle and/or financial needs.
• If you are incorporated, work with your tax advisor to determine the best way to save within, and draw funds from, your corporation.
• Revisit your financial plan once you have children to ensure you can properly protect them as your dependants.
• Create a budget, with the help of your financial consultant, to ensure you have adequate savings to meet your financial goals.
1 Wendy Glauser, “Medicine changing as women make up more of physician workforce,” CMAJ 190 (April 3, 2018):E404-5.doi: 10.1503/cmaj.109-5577.
All data is current as of October 31, 2018 and is subject to change.