The Quebec Parental Insurance PlanLinkedIn
There, in black and white
NB Bulletin Vol. 8 N. 15, December 2005
The Quebec Parental Insurance Plan (QPIP) will come into effect on January 1, 2006. This is a follow-up to our March bulletin (Vol. 8, No. 5, March 2005) and updates the information concerning the benefits payable and the premiums paid by employees, employers and self-employed workers.
Future parents must choose between the basic plan and the special plan in the calendar week when they wish to start receiving benefits. The choice of plan is determined by the first parent to receive benefits. The choice cannot be modified, and applies to all benefit types for the same event. For example, if the first parent selects the basic plan for maternity benefits, the basic plan will also apply for paternity benefits and parental benefits.
Under the basic plan, for a birth, the mother may receive benefits for up to 50 weeks whereas under the special plan, the maximum is 40 weeks. The level of benefits depends on which plan is chosen.
Parents may take their weeks of benefits consecutively or simultaneously.
(1) Benefits are a percentage of income up to a maximum annual income of $57,000.
As set out in the Canada-Quebec Agreement, the premium rate paid by Quebec workers and employers to the federal employment insurance plan will be reduced for the parental insurance portion effective January 1, 2006. However, on the same date, Revenue Quebec will start collecting the new QPIP premiums from employees (through deductions at source), employers and self-employed workers. One important change is that when maternity and parental benefits came under employment insurance, self-employed workers were not eligible to receive benefits.
(1) Insurable income includes taxable benefits; the maximum is $39,000
However, for employees whose insurable income exceeds $39,000, the QPIP premiums will cost the employee and employer more. This is because the maximum insurable income under the employment insurance plan is $39,000 per year while the maximum under the QPIP is $57,000.
For more information about the QPIP, you can go to the following address: www.RQAP.gouv.qc.ca.
IMPACT ON OTHER BENEFIT PLANS
The QPIP will have very little impact on group insurance plans since they rarely include the payment of disability benefits during maternity and parental leaves. For plans that do pay disability benefits during maternity or parental leaves, the disability benefits could be integrated with the QPIP benefits.
The cost of Supplemental Unemployment Benefits for maternity and parental leave will go down for employers that already supplement maternity and parental benefits for their employees. This is because the QPIP income replacement rates are higher than the current rate for employment insurance (55%) and the maximum insurable income is higher with the QPIP than with employment insurance. However, as we mentioned above, for employees whose insurable earnings exceed $39,000, QPIP premiums will cost them more.
Please feel free to contact us for additional information.
630, René-Lévesque Blvd. West, 30th floor
Montreal, Quebec, H3B 1S6