What does the new Canada Child Benefit do for you?
The Canada Child Benefit (CCB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under 18 years of age. For those deemed eligible for the CCB, the Canada Revenue Agency (CRA) uses information from your last year’s income tax and benefit return to calculate the benefits to be paid over the next July to June cycle. To obtain the CCB, you have to file your return every year, even if you did not have income in the year; the same applies to your spouse or common-law partner should you have one.
First introduced in July 2016, the CCB simplifies the family benefit program that pre-existed it by replacing the Child Tax Benefit, the Universal Child Care Benefit (a benefit which was not tied to income), the National Child benefit Supplement and the Child Disability Benefit.
Upon the introduction of the new program the Liberal government proclaimed that 90 per cent of families will be better off with CCB than the pre-existing combination of benefits. The government also stated that families would see an average child benefit increase of $2,300 in 2016-17.
Example:a typical family of four with an annual household net income of $90,000 will receive approximately an extra $2,575.00 per year or $214.00 per month more than with the old program.
There are a number of factors at play including, age and number of children in the family. The Key to maximizing the CCB is to minimize your household net income. You can get up to: $6,400 per year for each child under the age of 6 $5,400 per year for each child aged 6 to 17 The federal government offers an online calculator to help people assess the impact of the change. Visit http://www.cra-arc.gc.ca/benefits-calculator/ . If you would like to see how much you are currently being paid log into your CRA My Account at http://www.cra-arc.gc.ca/myaccount/ .Please reach out to us at Insight with any questions on the CCB, or for advice on how to minimize your household net income.
Closing Fact: Other Family Benefits were also eliminated with the introduction of CBB, for example, income splitting for families and Fitness & Art Tax Credits for children.
DISCLAIMER: THIS ARTICLE deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.