Is it worth it to be self-employed in Canada and getting maternity or sick leave benefits?
As a self-employed person living in Canada, I pretty much assume the following:
- If I am sick while on contract, I lose money (I charge by the hour; no show, no pay)
- If I have to take time off work (as in refuse contracts) because I have a kid, I lose money
- If I need to go to the dentist or the ophthalmologist, it comes out of my pocket (100%)
- If I go to the doctor, it’s covered by the government (phew!)
While I am working, I am not allowed to get sick, and I should plan having kids AROUND contracts (yeah like that’s going to happen).
Anyway, so when I heard they I would POSSIBLY be able to get maternity benefits while being self-employed on Employment Insurance (EI) in Canada, I got excited.
Exactly my reaction.
Then I read this Money Sense article by Gail VO:
- You have to earn a minimum of $6222 a year
- You pay about 1.83% of your money towards Employment Insurance (EI)
- The maximum you pay towards EI is $839.07 a year (works out to $24,000 salary)
- EI is taxable income
I agreed with these points until I read the next ones:
- Once you sign up, you’re in it for good — can’t “opt out”
- If your business goes under, you can’t collect unemployment insurance
- If you make money while self-employed, your EI cheque decreases
Gail basically lays it out in the post exactly the way I would have written it with these final words:
Of course hardly anyone who is self-employed has the luxury of taking a year off from their business.
If you take only the first 15 weeks, you’ll be coughing up a lot of money for $7,275 in benefits. You’d have to have three mat leaves and some sick time off just to break even.
Thank goodness for Gail.
Now I don’t have to do the math, because navigating the Government of Canada website is a mess.
I’d also basically need to pop out 3 kids at 15 weeks each, and call in some “sick time” while on contract just to break even.
Sounds like a scam to me. I’m just going to have to save up a motherlode of cash for when I do have kids, and I will most likely take as little time as possible off while on maternity leave if there are contracts waiting to be filled.
Otherwise, I’ll spend the time with the baby until I get another contract.
(Or take a job at a company THEN get pregnant.)
(This might very well be me one day in the future while working at a company on maternity leave.)
I’m curious how other self-employed people have dealt with this, not necessarily just in Canada. 🙂