Quebec Parental Benefits for Self Employed Workers
In Canada parental benefits are administered by Service Canada. Since they fall under the EI program, self employed workers must opt in to the EI plan for self employed individuals to receive benefits. In Quebec,however, unlike the rest of Canada, parental benefits are administered by the Quebec Parental Insurance Plan (QPIP), which does not specifically require opt in. Instead all workers in Quebec whether self employed or employees are required to pay premiums, based on their insurable earnings up to maximum insurable earnings of $76,500. . For the self employed, premiums are payable at a rate of 0.934% , and are calculated on your annual tax return (tax software will do this automatically for small business who report their income on the T2125). As such all workers in Quebec are eligible for Parental Benefits.
Criteria for Eligibility
In order to be eligible for the parental plan, first you need to verify that you are in fact self employed. Other criteria for eligibility are:
Be the parent of a child born or adopted on or after January 1, 2006
Be a resident of Québec on the start date of your benefit period and on December 31 of the year preceding the start date of your benefit period
Have ceased your business activities or reduced the time spent on them by at least 40%
Have at least $2,000 in insurable income (income taken into account for benefit calculation purposes) during the qualifying period
Pay premiums under the QPIP regime.
Type and Amount of Benefits
Parents can apply for regular or accelerated benefits. The benefits are based on maximum insurable earnings of $76,500 for 2019 and $74,000 for 2018 and are calculated on average weekly income.
The choice of plan is determined by the first of the two parents to receive benefits, which binds the other parent, even in cases of shared custody. Once you have begun receiving your benefits, you can no longer change plans. The choice of plan is irrevocable and applies for the entire duration of the benefit period.
Maternity benefits are for 18 weeks at 70% or 15 weeks at 75% (of average weekly earnings). These apply exlusively to the mother who gave birth.
Paternity benefits: 5 weeks at 70% or 3 weeks at 75%
Parental benefits: 7 weeks at 70% +25 weeks at 55% or 25 weeks at 75%
(available in addition to maternity and paternity benefits)
Adoption benefits: 12 weeks at 70% +25 weeks at 55% or 28 weeks at 75%
Qualifying Period:
The qualifying period i.e. the period which is considered when setting benefits is the calendar year preceding the benefits period. If you were not self employed in the prior year, then the current year is used. Depending on your situation you will need to provide actual or estimated business income.
A request can be made to adjust the qualifying amount if certain conditions are met.
If your net income is less than $25,921 you may be entitled to an increase in benefits.
Benefits received are subject to deductions at source. Also benefits are reduced for any income earned during the benefits period.
Application Process
Each parent must file individually
Applications cannot be made in advance. The earliest an application can be made is during the week within which you want your benefit period to begin. Conversely delays in application can reduce your benefit period.
You can file once you cease your business activities or reduce them by at least 40%
Applications can be filled out online or by calling client services
Processing time is about 2 weeks after the application date.
Benefits are paid biweekly, on Sundays.
For more detailed information the QPIP website for Self Employed is quite straightforward and even has a handy benefits calculator.
Ronika Khanna is an accounting and finance professional who helps small businesses achieve their financial goals. She is the author of several books for small businesses and also provides financial consulting services.
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