Can you pay your bills for sixteen weeks on $561 per week, before taxes? This is an important question to ask yourself if you work in New Jersey, and you are planning a pregnancy. New Jersey has some of the richest state mandated disability benefit programs for pregnancy and maternity leave. You are covered for four weeks before your delivery, and at least six weeks after you give birth. Plus, you get an additional six weeks to bond with your baby.
But not every couple can afford to miss almost four months of work with a significant pay cut. The NJ benefit represents a 50% pay cut for a woman making $58,000 per year. You can close the gap by purchasing supplemental short term disability insurance before getting pregnant.
NJ Temporary Disability Insurance
The New Jersey Temporary Disability Insurance program mandates that people who work in the state for a private employer must be covered. The program replaces up to two thirds of your income, or $561 per week whichever is less.
For normal pregnancy, benefits are payable for up to four weeks prior to delivery and six weeks after delivery. You may additional benefits if your doctor certifies you are unable to work due to complications, Caesarian delivery, or because of a simultaneous disability.
New Jersey Paid Family Leave
The NJ Paid Family Leave provides an extension of the temporary disability benefits for up to an additional six weeks for you to bond with your newborn baby. It can be taken once your doctor certifies that you are able to return to work after your delivery.
Add the two together, and you get at least sixteen weeks of benefits. Your benefits may last longer if you experience complications, c-section delivery, or a sickness and/or injury.
So, back to our original question; can you afford to miss sixteen weeks with at least a one third pay cut or more? If your income is $43,758 per year or less, you get the one third pay cut. If your income is above that figure, you hit the $561 per week cap, and your pay cut will be much bigger.
Supplemental Short Term Disability
Purchase supplemental short term disability insurance before getting pregnant. Your benefit for normal delivery may greatly exceed the premium you pay, creating additional maternity leave income. Use this extra income to fill the hole in NJ's temporary disability program. Give yourself a bigger financial cushion so that you can enjoy each of your sixteen weeks away from work, without worrying about how to pay your bills.
You may experience also experience complications, or delivery by c-section. This means you will be away from work for more than sixteen weeks. In addition, you may have some unexpected medical bills. Your supplemental short term disability insurance will cover these events as well, helping you feel more secure. If you experience a difficult pregnancy, the last thing you want is financial stress.
All of the above make purchasing supplemental short term disability a smart thing to do. Get started before getting pregnant.