How to Get Money During Maternity Leave

Navigating the financial aspects of maternity leave requires careful preparation and understanding of available resources. The period surrounding the birth of a child often involves reduced income and new expenses. Proactive financial planning and knowledge of potential income streams help families maintain stability during this transformative time.

Employer-Provided Financial Support

Many employers offer various forms of financial support that can supplement income during maternity leave. Employer-sponsored paid parental leave policies are becoming more common. These policies vary significantly, with some companies providing full or partial wage replacement for a specific duration. Employees should review their company’s employee handbook or consult with human resources to understand available paid leave, including eligibility and coverage length.

Short-term disability insurance can also provide wage replacement for the period a birthing parent is medically unable to work due to pregnancy, childbirth, and recovery. This insurance might be employer-provided, purchased independently, or a state-mandated benefit. The Pregnancy Discrimination Act requires employers to treat pregnancy and childbirth medical conditions similarly to other temporary disabilities. Short-term disability covers a percentage of wages, often 50% to 60%, for six to eight weeks postpartum, though it can extend longer for complications.

The Family and Medical Leave Act (FMLA) is a federal law providing eligible employees with up to 12 weeks of job-protected leave per year for specific family and medical reasons, including the birth and care of a newborn. To be eligible, an employee must work for a covered employer (generally 50 or more employees within 75 miles), have worked for at least 12 months, and accumulated at least 1,250 hours of service during the preceding 12-month period. FMLA guarantees job protection and continued health benefits but does not mandate paid leave. Any pay received during FMLA leave comes from employer-specific paid leave policies, accrued paid time off, or short-term disability benefits.

State-Administered Paid Leave Programs

Several states have implemented their own paid family leave (PFL) or temporary disability insurance (TDI) programs, which offer direct income replacement during maternity leave. As of early 2025, thirteen states and the District of Columbia have mandatory paid leave systems in place:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Massachusetts
• Maryland
• New Jersey
• New York
• Oregon
• Rhode Island
• Washington
• Washington D.C.

These programs are funded through payroll contributions from employees, employers, or both, and wage replacement rates range from 50% to 80% of an individual’s average weekly wage, often with a maximum weekly benefit cap.

Eligibility for state-administered paid leave programs depends on factors such as employment history and earnings thresholds. For example, some states require employees to have earned a minimum amount in wages subject to state disability insurance deductions within a specified base period, such as California’s requirement of at least $300. Programs also have requirements for the length of employment, such as working a certain number of weeks or hours for an employer. These benefits are specifically for qualifying reasons, including bonding with a new child after birth, adoption, or foster care placement.

Information Gathering for Application

Applying for state-administered paid leave benefits requires collecting specific documentation to support the claim. Applicants need to provide personal identification, such as a driver’s license, state ID, or passport, along with their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Details about the employer are necessary, including their Federal Employer Identification Number (EIN), which can be found on W-2 forms or pay stubs. Bank account information is required for direct deposit of benefits.

For claims related to childbirth, a medical certification from a healthcare provider confirms the birthing parent’s inability to work due to pregnancy and recovery. This can be a specific certification form provided by the state, a doctor’s note containing the required information, or a Family and Medical Leave Act (FMLA) form if applicable. For bonding leave, proof of relationship to the child is necessary, which might include the child’s birth certificate, adoption paperwork, or foster care placement records. State labor department websites or online portals are the primary sources for accessing official forms and detailed instructions.

The Application Process

Once all necessary information and documents have been gathered, the application for state paid leave benefits can be submitted through various methods. Most states offer convenient online portals for filing claims, which is the fastest way to apply. Applications can be submitted by mail using printed forms, and some states may offer in-person submission options. Applicants should ensure they file their claim no earlier than the first day their leave begins but no later than 41 days after, to avoid potential loss of benefits.

After submission, states notify the employer within a few days, allowing them a period, around 10 business days, to provide additional information relevant to the claim. Processing times for initial applications can vary, with some states reporting a timeframe of two to three weeks for review. Once approved, the first payment may arrive within two to four weeks after the leave commences. Many programs require applicants to file weekly claims after the initial approval to continue receiving benefits. Applicants can track the status of their application and payments through their online account or by contacting the state’s program directly.

Financial Planning for Maternity Leave

Effective financial planning manages the period of maternity leave, especially given potential income reductions and new expenses. Creating a detailed budget specifically for the leave period is a step. This budget should account for reduced income, considering any employer-provided benefits or state paid leave, and new expenditures such as baby supplies, medical co-pays, or potential childcare costs if applicable after the leave. Reviewing current spending habits and identifying areas for reduction can help align expenses with the adjusted income.

Building an emergency fund or dedicated savings for maternity leave provides a financial cushion. Setting a savings goal based on anticipated income shortfalls and new expenses can guide this effort. Some individuals aim to save enough to cover several months of living expenses or to bridge the gap between their regular income and any partial benefits received. This dedicated savings can be held in a separate, easily accessible savings account to prevent commingling with other funds and ensure its availability when needed.

Reducing expenses during maternity leave involves identifying and minimizing discretionary spending. This might include cutting back on non-essential purchases, dining out less frequently, or exploring more cost-effective options for groceries through meal planning and batch cooking. Utilizing second-hand items for baby clothes and gear can also significantly lower costs, as babies quickly outgrow many items. Optimize existing funds and alleviate financial pressure during a time of significant personal adjustment.

Understanding the tax implications of maternity leave benefits is an important aspect of financial planning. Family leave benefits received from state programs are included in an individual’s gross income for federal income tax purposes, although they are not considered wages for federal employment taxes and are reported on a Form 1099. The taxation of medical leave benefits can vary depending on whether the employee or employer contributed to the premiums. Any contributions an employer makes on behalf of an employee to a state paid family leave program are treated as additional taxable compensation to the employee.