OTTAWA – A new study says the Liberal government should rethink federal parental benefits and overhaul a system that leaves out too many families and women, while ditching the idea of dedicated time off for new dads.
As is, the study says, there is a cohort of new parents, particularly mothers, who don’t qualify for benefits because employment insurance rules require them to have worked a specific number of hours in the previous year.
Other can’t qualify because they are self-employed or freelancers — a problem likely to increase with the widening of the “gig” economy. Self-employed parents can voluntarily opt-in to the employment insurance system in order to qualify for parental benefits, but the study says the take up is low.
Looking even closer at the numbers, the study released Wednesday by the Institute for Research on Public Policy found that parents from lower and modest income homes — those the federal government would consider as hoping to join the middle class — don’t take benefits for a full year.
The study’s author said it all leads to questions of how inclusive the parental leave system really is and whether a change in rules would mean parents aren’t forced back to work sooner than they are meant to in order to make ends meet.
“Access to paid benefits, job-protected leave and then child care means that woman can move back into the workforce after having kids,” said Jennifer Robson, an assistant professor of political management at Carleton University.
“But I think there’s also this issue of, is the system right now working in a way that gives equitable coverage both on getting into the system but also being able to actually maximize the use of the benefits?”
Robson said the federal government should consider taking parental benefits out of the employment insurance system and give it a new federal program to ensure that more parents can qualify for benefits. The paper also suggests the government look for ways to not force new parents to totally sever themselves from the labour force in order to receive the EI benefits.
The timing of the study comes as the Liberals explore changes to the federal parental leave program, including extending federal parental leave to 18 months, although without a similar increase in benefits, and providing specific paid leave to new fathers.
The federal parental leave program pays out benefits for up to 15 weeks for new mothers and allows parents to split an additional 35 weeks. The paper suggests merging the two leaves into one parental leave that can be shared between new parents to give families more choice and flexibility.
The paper suggests there is some merit to extending benefits to 18 months, including allowing two-parent families to split the leave, but presses the federal government to ensure changes don’t leave out low-income parents as critics have warned.
As it is, people receiving parental benefits earn on average of $427 a week for a year. Spread over 18 months, that works out to $305 a week, or a little over $1,200 a month.
Robson said the Liberals could look at boosting the family supplement, an extra $41 a week paid to the bottom 4.5 per cent of income earners on EI. The government could also find a way to better align the Canada child benefit, which is calculated off a parent’s last income tax return that could be higher or lower than their current earnings.
Robson said she was less enthused about the idea of dedicated leave for fathers. Her paper argues that absent “more pressing reforms” to the EI program, adding dedicated paternity benefits could exacerbate inequalities between low and high-income families.
Couples with annual incomes under $40,000 are less likely that higher-income couples to have both parents qualify for EI benefits, or be in jobs that include employer tops ups that make time off more affordable. Research internationally shows that fathers with higher education and incomes are most likely to make use of paternity leave, even when it is offered on a use-it-or-lose-it basis.
“Based on the available evidence to date, the case for introducing dedicated leave and benefits for fathers is not robust,” Robson writes in her study.
New parents account for one out of every five EI claims filed, a statistic that wasn’t foreseen when the system was set up in 1971 and designed as a niche add-on to employment insurance, Robson said.
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