On January 1, 2006, the government of Quebec will launch its new Quebec Parental Insurance Plan (QPIP), which will replace maternity and parental benefits paid under the federal Employment Insurance Program. The QPIP will provide higher benefits and broader coverage for Quebec employees and self-employed workers.
As with the federal EI program, QPIP benefits consists of a percentage of covered earnings for a period of weeks, subject to an earnings cap. However, QPIP benefits differ from the EI benefit in several ways:
- Individuals can choose a basic or special plan. Under the basic plan, the income replacement rate is lower than for the special plan, but the benefit period is longer;
- The maximum insurable income will be increased;
- The two-week waiting period prior to the start of benefit payments will be eliminated;
- Paternity benefits are available for fathers;
- The new program provides for income replacement for self-employed workers and salaried employees alike who have accumulated at least $2,000 in insurable income.
For more information on QPIP, visit the Quebec Parental Insurance Plan website.
QPIP as it relates to your pay cheque
With the transfer of the parental insurance plan from the federal Employment Insurance program to Quebec commencing January 1, 2006, you will see the following small impact on your pay cheques:
The 2006 EI rate across Canada will be 1.87% of one's employment income limited to $39,000. In Quebec, your EI rate is reduced to 1.53% with the same maximum. However, the EI reduction is offset with a new payroll deduction identified as QPIP which will be 0.416% of your employment income limited to $57,000. Between the EI and QPIP deductions, your overall deduction will be slightly more; however, this is offset with improved benefits as explained above.
Any questions concerning this new tax should be addressed to the Payroll office at 514-398-3751.