NLMA Parental Leave Allowance
Frequently Asked Questions

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Benefits

  • When can my benefits start? Your benefits can start at anytime, provided it is no earlier than the date of birth or adoption, is completed during the first year, and is consecutive. Annual leave, sick leave, and other parental leave program benefits maybe be used before or after your NLMA Parental Leave Allowance period.
  • How much can salaried physicians receive from the allowance? Salaried physicians can receive up to $1,200 per week, but this amount is reduced dollar-for-dollar by Employment Insurance (EI) benefits. In this case, the benefit is essentially a “top-up”. EI benefits must be applied for before applying for the NLMA Parental Leave Allowance, and proof of such may be requested.

Employment Insurance

  • How is the "top-up" calculated? The "top-up" is calculated based on the maximum employment insurance (EI) benefit of $543 gross per week (effective January 1, 2017 and amended as necessary). In other words, the NLMA Parental Leave Allowance for these physician parents is $657 per week ($1,200 minus $543). It is assumed that all such applicants are eligible to receive the maximum benefit. If this is not the case, further explanation will be requested of the applicant.
  • Are Professional Medical Corporation (PMC) physicians eligible to receive employment insurance (EI) benefits while they are on parental leave? Typically anyone who owns a corporation, which is the case for PMCs, does not qualify for EI benefits. They are also not required to make EI contributions. In order to qualify for EI benefits, a physician would have to voluntarily register with the Canadian Employment Insurance Commission prior to leaving on parental leave. Members who have previously voluntarily registered are entitled to receive EI benefits if they have reduced the amount of time devoted to the business by more than 40%. For more information, members are encouraged to contact Service Canada.

Reporting

  • When should I start reporting? You may start submitting the Report Form once you receive confirmation that your application has been reviewed and approved. If your leave start date has past, you should immediately submit for any period in arrears. If your leave start date has yet to arrive, you must wait until that time. The form covers two weeks (the first Monday to the second Sunday; unless you use the special version for EI recipients which can cover up to seventeen weeks) and to simplify the process, it is recommended that you start with the first Monday following your leave start date. This avoids having to prorate your first and final weeks.
  • Is my birth/adoption date the same as my leave start date? Maybe, but not necessarily. Your leave start date is the date you consider yourself off for parental reasons. This may coincide with your birth/adoption date, or it may precede it. For example, you may be off in the previous weeks for medical reasons. It is important to note that the date of your first Report Form may be a different date again. For example, you may have stopped work on July 15, gave birth on August 1, with your first day of NLMA Parental Leave Allowance being the following Monday.
  • Do I report what I earned or what I received? You must report what you earned during the reporting period, not what you necessarily received. As you know, payments tend to lag well behind the dates service was delivered. This will help you keep weekly income below the thresholds for benefit reduction.
  • What types or income are exempt and need not be reported? While all sources of income during your benefit period should be reported to avoid possible repayment later, some income is exempt and need not be reported. These include rural retention bonuses, other parental leave program allowances, the federal government's Universal Child Care Benefit (UCCB), and the provincial government's Progressive Family Growth Benefit and Parental Support Benefit.

Payments

  • Can payments be made to a Professional Medical Corporation (PMC)? The Canada Revenue Agency (CRA) considers these benefits as part of each physician’s membership in the NLMA. As individuals they are members, rather than their PMCs, and thus benefits should be paid as such. If benefits are paid to the PMC, the plan may not be considered to be a wage loss replacement plan. This could require additional tax withholdings.
  • How and when are payments made? Payments are by direct deposit only, and must be set up using a Direct Deposit Form. Deposits are made every second Thursday. However, it is important to note that the total time between Report submission and direct deposit may be up to four weeks. An e-mail notification will be sent to you on the day of deposit, but may not actually appear in your account until later in the day.

Taxes

  • What are the tax implications of receiving the allowance? The Canada Revenue Agency (CRA) considers these payments to be a “wage loss replacement plan” as discussed in Paragraph 6(1)(f) of the Income Tax Act. A T4A will be issued by the NLMA in January or February of each year for each individual who receives allowance payments in the previous tax year.
  • Will taxes be deducted from my payments? Under Paragraph 200(2)(f) of the Income Tax Regulations, there is no requirement to withhold income tax on a wage loss replacement plan. Thus, tax will not be deducted at the source.
  • How will the T4A cover retroactive payments? The T4A will cover payments on a cash basis. In other words, when payments were received, not for the periods which they covered. Should you receive retroactive payments from a previous year, these will be reported on the T4A for the year in which you actually received the payment.

Assistance For assistance, please contact J. David Mitchell, Director, Administration & Membership at (709) 726-7424 (301), (800) 563-2003 (301) or dmitchell@nlma.nl.ca.

Newfoundland and Labrador Medical Association
NLMA House, 164 MacDonald Dr., St. John's, NL, Canada, A1A 4B3
Telephone (709) 726-7424 | Toll Free (800) 563-2003 | Fax (709) 726-7525
E-mail nlma@nlma.nl.ca | Web www.nlma.nl.ca