Let’s start with a heartfelt apology to all the parents currently at home. Before motherhood, I had never paid attention to the term “parental leave”. Anyone who has experienced it can testify that the only vacation offered as part of this “leave” is probably limited to the absence of the need to set the alarm clock. After all, babies and children will be responsible for an alarm clock that always goes off very early, every morning, without exception.
At the heart of this slice of life, we find a real question, complex and generalized. In many couples, the decision in favor of who will stop working to take care of the newborn does not arise for long. The mother, having carried the baby and breastfeeding him often, is generally more inclined to take it. But more and more, dad shares the weeks of benefits offered thanks to the generous Quebec Parental Insurance Plan (QPIP). Our society has evolved in its conception of parenthood, and that is magnificent.
But, behind this undeniable progress, there is still a financial blind spot. Because parental “leave”, which is leave in name only, also means further reduction in income, limits to professional development and additional financial burdens.
Every couple has their own financial reality
So who should pay for parental leave? Is it up to the parent who stays at home to bear the financial repercussions alone, or should the parent who maintains their salary and employment status reduce their personal cost of living to compensate? The answer will certainly depend on an even more basic state of the situation. Where are you in your marital budgeting journey? This is the first question all future parents should ask themselves. It is normal for the sharing of expenses to evolve according to the cycle of life together, often with a form of increasingly marked commitment: new couple, purchase of a house and starting a family.
At the stage of becoming parents, the spouses have probably already started a form of sharing expenses, which can be based on the traditional 50-50 or in proportion to income. The 50-50 mode could be maintained with the arrival of the baby, but, ideally, only in situations where the parents’ incomes are equivalent (which is not statistically widespread). Pro rata sharing can potentially be explored as soon as a spouse commits to family life. For example, if the total household income (after taxes) is $150,000 and Mom earns $60,000, she could pay 40% of the common expenses and Dad, 60%.
During the baby’s first year of life, since employment income will be lower for the parent receiving QPIP benefits, each couple will establish their budgetary priorities according to the impact this leave has on their cash flow. In all cases, the new family situation requires reviewing the definition of joint expenses. If they were previously limited to food and housing, for example, it is often natural to include other expenses.
And even with pro rata sharing of income, the parent with the lowest income does not always benefit from an equal situation. For example, if the joint expenses are inspired by the lifestyle of a spouse with increasing income (luxury car and stroller, numerous outings and restaurants), it is true that the other spouse would only pay 40 %, but he will probably spend more than his own means, which will force him to limit his investments.
Test common values
In fact, true recognition of the value of work at home and its contribution to the domestic economy would invite you to even consider the savings of the parent at home in your common family expenses, or even to include a personal allowance. basic. Surprising, in this period of equity? No way. Remember that tax benefits and social programs are based on family income. The state assumes that you will share family expenses by pooling your resources. So, if your mode of operation does not take this into account, one parent risks becoming poorer than the other.
Whether for the common expenses of life as a couple or those associated with the family, the fundamental question could well be that of shared values. Beautiful conversations on this subject should be held even before the plan to get married or start a family. Many apologies for this excess of pragmatism, but why be in denial? What are your priorities when it comes to spending on children: will you want to move and offer more space to your family, travel by car or otherwise, what do you think about elite sports, private school, countless opportunities to pay to encourage the development and well-being of your offspring?
Be careful, keep in mind that it is easier to establish theoretical common expenditure items than to agree on the resulting consumption choices. Obviously, as long as the status of parent is not formally committed, it is possible to be wrong about preferences, but this discussion makes it possible to determine the sources of consensus or negotiation.
Let us end by recalling that confusion reigns in many minds regarding the protection of de facto spouses. Even if they have children born from their union, de facto spouses do not benefit from any protection in the event of death or breakup. For unmarried couples, the cohabitation agreement is of capital importance to protect the parent who will assume domestic and family life. As Belleau and Lobet point out in Love and money. Survival guide in 60 questions (Remue-ménage), the majority of Quebecers choose not to marry and they have no control over their tax and legal status as common-law spouses. It’s up to you to take responsibility for creating this family contract of commitment and protection.
Financial planner, Sandy Lachapelle is president of the independent firm Lachapelle Intelligent Finances.