Life being what it is, it’s never easy to figure out the “right” time to start a family. How will you plan a pregnancy or adoption, take time off with a newborn, and still keep up with your medical studies, finish your residency, or continue to care for your patients or your career?
Obviously, there is plenty to think about. This is not a decision to be made lightly, especially by those working in the medical field. You would be well advised to do your research, make preparations, and start planning your finances before the biological clock begins to tick.
Figuring out the types of parental leaves and benefits available in Quebec
Students, residents, family physicians, specialists, salaried/non-salaried — there are as many unique situations as there are babies. Here’s an overview of the financial resources available to you.
FMOQ and FMSQ maternity and adoption leave allocation program
Fee-for-service, hourly, sessional or per diem general practitioners and specialists are eligible for the maternity and adoption leave allocation program (French-only link) under the Québec Health Insurance Plan if they have accumulated a minimum of 10 weeks of practice. Benefits are payable to eligible physicians for a period of 12 weeks according to the following conditions:
Basic benefits — 67% of weekly earnings
Maximum of $1,809
Maximum of $2,400
Lump-sum amount — 33% of weekly basic earnings in practice
Maximum de $802
Maximum of $1,000
For more information, FMSQ members should visit the members-only section of the Federation’s website.
Québec Parental Insurance Plan
The Québec Parental Insurance Plan (QPIP) provides income replacement benefits to all eligible salaried and self-employed workers who have paid into the plan. Incorporated physicians must pay themselves a salary to be eligible for the plan.
Individuals can choose between the basic plan (50 weeks) and the special plan (40 weeks). The plan chosen by the first parent to apply for QPIP benefits also applies to the other parent for the entire benefit period. The parents’ situation should thus be given careful consideration.
The amount of maximum insurable earnings used to calculate benefits is adjusted each year. For 2021, this amount is $83,500.
As the name suggests, maternity leave is exclusively for the woman who gives birth. A weekly benefit of 70% (basic plan) of the average weekly earnings is paid for a maximum of 18 weeks.
Depending on the chosen plan, the parent named as the father on the birth certificate is eligible for three or five weeks of benefits. Weeks of leave may be taken during the first 18 months following the child’s birth. Medical residents are also entitled to five days off with full pay from their employer.
The QPIP offers three types of adoption benefits: welcome and support benefits shareable by the parents (13 weeks at 70%), exclusive adoption benefits for each of the parents (5 weeks at 70%) and shareable adoption benefits (7 weeks at 70% and 25 weeks at 55%). These figures are for the basic plan.
Bill 51 has brought many changes to adoption leave. Visit the QPIP site for full details.
This leave extends maternity, paternity or adoption leave for a maximum of 32 weeks. Under the basic plan, if both parents use at least 8 weeks of parental leave, they can take 4 additional weeks of leave (at 55% of their earnings). Under the special plan, if the parents use at least 6 weeks of parental leave, they can share 3 additional weeks of leave (at 55% of their earnings).
Maternity benefits are generally not payable for more than 20 weeks after the birth of a child. Think carefully when coordinating benefits from several plans, such as those of the FMOQ/FMSQ.
It can be hard to keep all these numbers straight. The QPIP simulator can give you a clearer idea of the amount of benefits you may be entitled to.
Earning income while receiving benefits
QPIP beneficiaries who choose to work part time during their leave can earn a certain amount of income without their benefits being reduced. The amount of the income exemption they are entitled to is the difference between their average weekly earnings and the amount of the benefits.
As long as their weekly earnings do not exceed the amount of the exemption, the amount of benefits will stay the same. However, if the exemption amount is exceeded, the benefits will be reduced accordingly.
Provincial government employer program
Salaried physicians employed by Quebec government institutions, as is the case for medical residents, are eligible for an indemnity for a period of 21 weeks that, combined with QPIP benefits, is equivalent to 95% of their pay.
Student loans/bursaries and financial assistance program
If you are a student, you probably haven’t paid into the QPIP yet and are not, therefore, eligible for QPIP benefits. If you are studying full time and are at least 20 weeks’ pregnant, you may be eligible for supplementary financial assistance. Moreover, if you decide to temporarily interrupt your studies after the 20th week of your pregnancy, you may be eligible for a deferral of your student debt payments for up to 12 months.
The information provided above about potential sources of income will help you in planning your leave. However, as the income of a practising physician is usually higher than the average income, benefits available to you will probably not be enough to allow you to maintain your lifestyle for several months.
Other financial resources available to you
There are several other financial resources you can turn to during your parental leave, so why not combine all of the options?
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 some money 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 also help to smooth out your income between higher-earning and lower-earning years, including during a maternity or parental leave. In those lower-earning years, while you’re in a lower personal tax bracket, you can pay yourself from earnings that have been retained within your corporation.
A great adventure is best shared
Two parents can be more “resourceful” than one, and it may be a good idea to coordinate benefits and financial resources as a family. This is also a good time to update your financial planning.
Divvy up leave time – If your partner or spouse is eligible for QPIP benefits, or qualifies for more generous top-ups from an employer, consider how to divide parental leave between you for the greatest financial benefit. If you work in a clinic or hospital, there is a good chance that your employment contract sets out your available leave. Be sure to check this when planning your parental leave.
Lock down your insurance – This is 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 – Create or update a will and protection mandate for yourself and your partner. As parents, you can use a will to name a guardian to care for your child, if anything should happen to you.
Organize your return to work – It’s best to plan your child’s care arrangements well before your return-to-work date. You’ll have to take your atypical schedule, long working hours and on-call shifts into consideration. Will you be able to count on your family’s help? Will your schedule allow you to opt for childcare services? Will you need help at home?
Plan for the future – You will probably start planning for your child’s future as soon as he or she is born. Make opening a registered education savings plan (RESP) part of your to-do list. Set up automatic monthly contributions and let the RESP grow until your child is ready to start post-secondary studies!
Taking 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 operating costs such as 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. You could be eligible for subsidies to help cover your operating activities in certain circumstances. Some professional associations also offer premium holidays during this period.
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?
How MD can help
There’s more than one path to planning the details of a parental leave, and you don’t have to work out all the details on your own: at MD Financial Management, we’ve been helping physicians with financial planning since 1969. Your MD Advisor* can help you work out an income strategy and tax-optimized financial plan to prepare you and your family for that important period in your life.
Note: The figures in this article were current as of January 2021, and are subject to change.
* MD Advisor refers to an MD Management Limited Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.
The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.