FEDERAL BUDGET INTRODUCES A NEW CANADA CHILD BENEFIT

FEDERAL BUDGET INTRODUCES A NEW CANADA CHILD BENEFIT

Topic: Family Law April 1, 2016 by Carol Cochrane

On Tuesday, March 22, 2016, the Minister of Finance delivered the new federal budget which provided for the elimination of the Canada Child Tax Benefit (“CCTB”) and Universal Child Care Benefit (“UCCB”) and replaces them with a single, non-taxable Canada Child Benefit (“CCB”).

 

The CCB will provide a maximum benefit of $6,400.00 per child under the age of six and $5,400.00 per child ages six through seventeen.  In addition to the CCB, the government will continue to provide up to $2,730.00 per child eligible for the disability tax credit.

 

This new change will come into effect in July, 2016.  Payments under the CCTB and UCCB will conclude with the June, 2016 payment.

 

Payments for the July, 2016 to June, 2017 benefit year will be based on adjusted net family income reported for the 2015 taxation year.  The CCB will be phased out based on adjusted family net income as follows:

 

Phase out rates % by income

Number of Children $30,000.00 to $65,000.00 Over $65,000.00
1 child   7.0 3.2
2 children 13.5 5.7
3 children 19.0 8.0
4 or more children 23.0 9.5

 

The rules governing the CCB will generally be based on the existing CCTB rules.  Specifically:

 

 

  • The CCB will be paid monthly to eligible families.

 

  • The CCB will not be taxable and will not reduce benefits paid under the Goods and Services Tax (“GST”) credit.

 

  • The CCB will not be included in income for purposes of federal income-tested programs delivered outside of the income tax system, including the Guaranteed Income Supplement and the Canada Education Savings Grant, among others.

 

  • To be eligible for the CCB an individual must be a resident of Canada for tax purposes and must live with, and have the primary responsibility for the care and upbringing of the qualifying dependent(s). The handling of the CCB in a shared custody situation will remain the same as under the CCB.

 

For more information as to how the federal budget will impact on your child tax benefits and family, please contact a member of the Family Law Practice Group.

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