The availability of maternity leave is one of the best social security measures for working women. The government recently mooted a law that makes a 26-week maternity leave for women mandatory. While on this leave, you would be entitled to your full salary without having to report for work, subject to your company’s HR policy.
While you may get your full pay, maternity and raising a newborn child come with costs which can drain your finances in the short run. Therefore, planning is necessary to pass these little hurdles and maintain financial stability.
Let us look at the various aspects of maternity leave and how you can go in and come out of your maternity leave in the best possible health – not just physically, but also financially.
Know the policy
As a woman employee of either public or private establishments with 10 or more employees, expecting mothers are entitled to get a 26-week maternity leave. This limit is up from the earlier 12 weeks. In case of surrogacy or adoption of a child under the age of three months, the limit continues to be 12 weeks. Women who have two or more children will also get only 12 weeks. The leave may begin eight weeks before the expected date of delivery, and it could be extended as per a company’s policies. Some companies may even allow a work-from-home policy for their female employees beyond this 26-week window. Whether maternity leave could be mixed with other forms of leave would be decided as per a company’s policy. As a general rule, as a female employee, you become eligible for maternity leave only if you have worked for a minimum period of 80 days for your existing employer in the last one year. The actual timeline for association with the employer may vary as per a company’s HR policy.
Know your entitlements
Maternity leave in India is governed under the Maternity Benefit Act, 1961. Daily wage employees get an average daily wage calculated using the average of wages during the three-month period before the maternity leave. Regular employees are entitled to full salary including DA, HRA, provident fund, and all other allowances.
Opt for maternity insurance
Your employer’s group health plan may cover your maternity costs. Check your policy details to understand what is covered under the policy. Even male employees can avail maternity benefits for their wives under such a policy. If you are without a group insurance cover, there is still hope as you can avail maternity insurance offered by almost all insurers. Such covers will significantly reduce your cash outgo during hospitalisation. However, these may come with a waiting period in which maternity expenses specifically cannot be claimed. Therefore, if you’re planning your maternity in the long term, it may be sensible to get a policy with maternity benefit now so you may finish the waiting period at the earliest.
Check your savings
Your financial planning should start from the time you consider starting a family. While maternity leave means you will keep getting your regular monthly income, you must budget for the high charges of hospitalization and any medical treatments that may follow. While your insurance policy may cover some of your expenses, maintain a financial corpus beforehand to ensure you have all emergencies covered including the extra financial strain you may experience after the birth of your toddler.
Budgeting for your child
Your maternity leave is a good time to reassess your family budget. A childbirth brings added financial responsibilities therefore you must make sure you are ready for them. You will have to provide for their health, education, nutrition and lifestyle. It is difficult to budget for a newborn; you never know how much you’ll end up spending, and when. But you can certainly start planning their long-term finances, the primary requirement for which would be in your child’s education. You can start a savings account in the child’s name, and lay the basis to begin investing in their name, which would hopefully grow up to be a sizeable corpus by the time they’re ready to go to college.
Insure your child—and yourself
You will have to provide a health cover to your child. This you can do by getting them an individual policy or by including them in your family floater plan and your employer’s group health plan. It’s also important for you to get a term insurance cover, now that you have a dependent. A traditional endowment insurance plan may not be enough for the long-term financial security of your child. Hence consider getting a sizeable term cover that would secure your family for the long term.
Extending your leave
If you need additional leave owing to bad health or any medical complication, you can avail 30 days’ additional leave under the Maternity Benefit Act. You will, however, need to support your claim with a proof of ailment and get the approval of your employer as per the HR policy.
The author is CEO BankBazaar.com