EI / maternity - and not returning

[AndyL]

Ok, asking for the wifey, so she doesnt spend 3 more days getting double talk from government call centers who quote legislation; and won't interpret...

Wife's coming up on end of maternity, pondering not returning to work. (And her doctor's avised her not to - has back issues related to a car accident just before going on mat-leave; and complications from cesarean)

We didnt take the employer top-up; as it was a possibility going in. But google-fu tells me that pension and vacation payouts are deemed as income and subject to claw back... EI folks tell her if she quits her mat-leave may be considered an overpayment in entirety and lay claim all of her pension and vacation ???

I'm confused, I can somewhat understand clawing back part of accrued vacation, but not the pension payouts...

Anyone gone through this recently - how does it actually play out in real life vs. What EI legislation says?

She's spent countless hours on the phone with EI CRA her union and they all quote the same piece of legislation, but none will point her in a real direction. It's a little complicated by the fact that her doctor's saying she shouldnt return to work due to her back (not at fault car accident) and hernia from c-section (typical alberta medical system - specialist won't see her until september).

[sputnik]

She probably didn't get any taxable pension payouts considering she isn't retired and most corporate pensions are registered (RPP) and would just get moved into a LIRA after leaving the company.

Her vacation payouts (depending how they are accrued and paid out) could be income but that would just show up on her next T4 and will move your tax return accordingly.

I wouldn't sweat it.

My wife didn't go back to work afterwards and everything worked out fine.

[ExtraSlow]

Here's what I know from the little research i did when my wife went on Mat leave. if you plan on not returning to work, DO NOT tell your employer until your mat leave is almost done. If they wanted to be dicks, the could say your quit before your mat leave, and then you aren't entitled to EI benefits for the year.

You have to act like you will be returning to work.

Deciding not to return to work after mat leave is not the same thing as quitting before mat leave. Not sure what the legistlation says, but that's my understanding.

[clem24]

Originally posted by ExtraSlow
Here's what I know from the little research i did when my wife went on Mat leave. if you plan on not returning to work, DO NOT tell your employer until your mat leave is almost done. If they wanted to be dicks, the could say your quit before your mat leave, and then you aren't entitled to EI benefits for the year.

You have to act like you will be returning to work.

Deciding not to return to work after mat leave is not the same thing as quitting before mat leave. Not sure what the legistlation says, but that's my understanding.

BOOM. Here's your answer. Go back to work for a week, tender resignation, get your vacation paid out, done.

[gretz]

Not to derail, but I will lol
My wife went on mat leave, on contract with employee top up. In the contract, it states she must return to the Assistant Managers position for one full year or will have to pay them back. Here is the kicker, they dropped her back to one 5 hour shift a week from full-time hours and tell her they don't have room in the schedule and she feels like they might be "letting her go". WTF lol... What would Beyond do? Can anything be done

coles: -Went from full-time at company (40hrs+ / week) for 4 years
-went on mat leave on contract
-came back to work but wont allow her more than 5 hrs a week
-potentially letting her go with no notice

Is this something we should talk to her union rep about?

[FraserB]

Constructive dismissal, go right to the union. It sounds like her employer is trying to get her to quit, then they will force her to repay the mat leave.

[GTS4tw]

Originally posted by gretz
Not to derail, but I will lol
My wife went on mat leave, on contract with employee top up. In the contract, it states she must return to the Assistant Managers position for one full year or will have to pay them back. Here is the kicker, they dropped her back to one 5 hour shift a week from full-time hours and tell her they don't have room in the schedule and she feels like they might be "letting her go". WTF lol... What would Beyond do? Can anything be done

coles: -Went from full-time at company (40hrs+ / week) for 4 years
-went on mat leave on contract
-came back to work but wont allow her more than 5 hrs a week
-potentially letting her go with no notice

Is this something we should talk to her union rep about?

This is illegal, and should be easily dealt with by the union.

[Doozer]

Originally posted by clem24


BOOM. Here's your answer. Go back to work for a week, tender resignation, get your vacation paid out, done.

This would be my thoughts too, if it wasn't for the doctor's note. Is it more of a "suggestion" from the doctor, or would he write a note to support?

One option would be go back to work with a note from the doctor saying you can't work, take a leave of absence for a few weeks, then quit? That way the mat leave issue is completely removed from the equation, and the company will have to be pretty delicate how they handle severance from someone who was purely on a medical leave.

[ExtraSlow]

Go back and work a week, then give notice. Much cleaner.

[nzwasp]

I have a tax question relating to Mat Leave too.

My wife spent the first 6 months of the year on mat leave and as such has had EI and has been taxed accordingly - shes going back to work mid june and will start earning her 130k less taxes again.

Come tax season next year would she be in for a shock? - owing more taxes than her coming would of taken out ? i dont really understand why she would.

Same question with me too - Ive worked for 6 months and im just about to take 5 months PAT leave getting taxed hardly anything by the government - I would think im not going to face a massive tax bill seeing as though i've paid all my cpp and ei for the year.

[sputnik]

Originally posted by nzwasp
I have a tax question relating to Mat Leave too.

My wife spent the first 6 months of the year on mat leave and as such has had EI and has been taxed accordingly - shes going back to work mid june and will start earning her 130k less taxes again.

Come tax season next year would she be in for a shock? - owing more taxes than her coming would of taken out ? i dont really understand why she would.

Same question with me too - Ive worked for 6 months and im just about to take 5 months PAT leave getting taxed hardly anything by the government - I would think im not going to face a massive tax bill seeing as though i've paid all my cpp and ei for the year.

You forgot the #humblebrag tag.

[nzwasp]

Originally posted by sputnik


You forgot the #humblebrag tag.

Oh i forgot to mention shes an engineer - i think thats pretty standard pay.

Its not me earning that much :(

[Doozer]

My guess is you'll be in for a surprise bill.

Our second child was born in Feb a few years back. My wife worked January, plus got the previous year's bonuses, etc, which were paid around Feb as well. All counted as income for that year. Wasn't a ton, but when combined with her maxed EI for the rest of the year, we ended up having to pay a couple grand the following year because she'd been "under taxed".

[clem24]

Originally posted by nzwasp
I have a tax question relating to Mat Leave too.

My wife spent the first 6 months of the year on mat leave and as such has had EI and has been taxed accordingly - shes going back to work mid june and will start earning her 130k less taxes again.

Come tax season next year would she be in for a shock? - owing more taxes than her coming would of taken out ? i dont really understand why she would.

It won't make much of a diff.

Let's assume $1500/month from EI, so 6 months at 1,500 = $9k and 6 months at 130/yr = $65k for total of $74k/year. That puts her in bracket #2 @ 22% marginal. I ASSUME her work will be deducting bracket #3 tax which is 26% marginal based on her annual salary. EI would've deducted at bracket #1 which is 15%. Then add 10% AB tax on top. We can work out both scenarios depending on how much tax her work is withholding.

The approximate effective rate for $74k/year is about 29% (federal and provincial). So her actual tax bill for 2013 will be about $21.5k.

So.. In WORST cast scenario, she'll be taxed too much and she'll receive a refund (yes, refunds are bad). Why?

Because her employer is deducting her taxes @ 130k/yr, and she's paying taxes at a 3rd bracket effective rate of about 31%. So her employer holds back 65k @ 31% = 20k + what EI held back which is 9k @ 25% = 2k for total deductions of about $22k. She'll get back $500.

Inversely, best case scenario: employer held back 2nd bracket (meaning 65k) at effective rate of 29%:

65k @ 29% = $19k + 2k for EI = $21k. She'll pay $500.

Still.. Factor in other credits and what not, and she'll more than likely get a refund in the end. But point is, her EI is a but a blip on her salary. You can always talk to her employer to see how much they are deducting. As for Doozer, sounds the employer screwed up and didn't take enough taxes off (likely from the bonus). My employer annualizes my bonus to determine the amount of taxes to take off that one payment, so it's quite shocking what is left over.