Using government benefits to ‘top up’ long absence leaves

In a post-COVID Canada, benefits are more important than ever

Using government benefits to ‘top up’ long absence leaves

The past year has been anything but easy, with COVID wreaking havoc on our working and personal lives. If one consideration emerged from the pandemic, it’s the overwhelming importance of authentic support organizations should offer to their employees – in particular the need for personal benefits.

HRD spoke to Kelly Higgins, assistant vice president at Aon and speaker at our upcoming webinar - Using benefits to enhance employee financial and mental health. Higgins revealed the considerations HR leaders must take in ensuring their benefits plans are provincially compliant – and explained how to use governmental aid to top up longer leaves.

“The first order of business is to ensure that you're complying with the legal requirements for employee leave – whether that’s maternal or parental,” explained Higgins. “Both are typically lengthy – and so an employer has to go beyond in supporting their worker whilst they’re absent. It’s essential that HR helps the employee maintain an attachment to the workforce, so that person is encouraged to come back and to reintegrate later on.

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“Due to the compliance aspect of these leaves of absence there's often a requirement that group benefits are continued through the entire leave, subject to cost sharing rules. If the employee agrees to continue paying their share of the cost, then they can continue to participate in group benefits. However, not all Canadian jurisdictions require that benefits actually continue. As such, if an employer is in one of those areas, they should look at whether or not they want the benefits to end.”

Benefits are essential to an employee experience. Whether they be health, virtual care, mental wellness or financial advice – when an employee is on leave for a long time, these plans turn into lifelines. Supporting your people through these critical life transitions is key to not only fostering an authentic culture, but to actually having your employees return to you at the end of their leave. 

In the upcoming webinar, Higgins will advise employees on how to leverage governmental benefits to enhance insurance programs. As she told HRD, there’s several initiatives which offer support and monetary help to workers on longer periods of leave.

“When a person is off on one of these protected leaves, they may be eligible for government benefits - if they've been contributing to the federal employment insurance program,” Higgins explained. “These programs provide a degree of income replacement, but it's not 100% of their wage. For instance, the maximum weekly benefit for 2021 is $595 a week, which for some employees may be a considerable drop in their take-home salary. This is where top up plans come in.”

A top up plan is a formal initiative which coincides with government programs. Essentially, it’s a permitted income supplement that allows an employer to ‘top up’ the government benefit to bring the employees earnings up to where they might be if they hadn't taken a leave of absence. And, according to Higgins, they’re increasingly popular.

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“We’ve seen a lot of top ups for maternity leave for a couple of decades now,” she added. “Less common are top ups for parental leaves, however they're growing in popularity. The  range of government benefits available has expanded in recent years. Four years ago, the federal government increased the number of weeks of benefits available to new parents. There’s now a two-tier system, whereby employees could enjoy 55% of their normal weekly earnings for 35 weeks, or they could select a lower benefit rate of 33% of their wages collected over a longer period of time.” The advent of parental sharing benefits in 2019 created even more options for new parents.

The benefits landscape is forever changing in Canada, not least due to the ongoing pandemic. As such, its’ more important than ever that employers are cognizant of the governmental programs open to them. To better understand how to leverage benefits to enhance your employees’ financial wellness, register for Aon’s upcoming webinar here.

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