The following is an Op-Ed from MP of Prince George-Peace River Bob Zimmer. In the article he goes on to discuss the Universal Child Care Benefit and he discusses some concerns about it.
On July 20th the Government of Canada sent approximately $3 billion to over 3.8 million families across Canada through the enhanced Universal Child Care Benefit. Canadian families received a lump-sum payment of $520 for each child under 6 and $420 for those 6 through 17. This is the biggest, single, one-time payment to families by the Government ever.
I know there have been a lot of questions and misinformation surrounding the enhanced Universal Child Care Benefit and how it will affect you family. I’d like to take this opportunity to address some of those concerns.
What was the Universal Child Care Benefit before it was changed?
In 2006, our Government introduced the Universal Child Care Benefit. It provided all eligible families with $100 per month for each child under the age of 6. The Universal Child Care Benefit provided direct federal support to approximately 1.6 million families with over 2 million young children.
How has the Universal Child Care Benefit been changed?
The Universal Child Care Benefit has been increased from $100 to $160 per month for each child under the age of 6 and has been expanded to include $60 per month for each child aged 6 through 17. Over the course of a full year, parents will receive almost $2,000 for each child under the age of 6 and up to $720 for each child aged 6 through 17. Approximately 4 million families are now benefiting from the enhanced Universal Child Care Benefit.
Is the enhanced Universal Child Care Benefit taxable?
Yes, the enhanced Universal Child Care Benefit is a taxable benefit and is taxed in the hands of the lower-income spouse or common-law partner. For single parents, the enhanced Universal Child Care Benefit can be included in the income of one of their children.
What are you doing to the Canada Child Tax Benefit?
The Canada Child Tax Benefit has not been changed. Parents who are eligible for this benefit will continue to receive it in addition to the enhanced Universal Child Care Benefit. The Canada Child Tax Benefit is a non-taxable amount and may include the national child benefit supplement and the child disability benefit.
Why are you eliminating the Child Tax Credit?
The Government has merged the Child Tax Credit with the enhanced Universal Child Care Benefit. While the enhanced Universal Child Care Benefit replaces the old Child Tax Credit, every family with children under 18 is better off because of this change. The old Child Tax Credit was not a “$2,255 non-taxable benefit” as some have suggested, it was a tax credit. It provided up to $338 per child per year and only went to families with children under 18 that paid federal income tax. That means that individuals with no taxable income did not benefit from the Child Tax Credit. For example, families with incomes under $30,000 only received two per cent of the benefits of the Child Tax Credit, compared to around 27 per cent for theUniversal Child Care Benefit.
To be clear, with the new enhanced Universal Child Care Benefit, all families are receiving more money to support the costs of raising a family. If you have children under the age of 18, there is no situation where you will be worse off than preceding years because of these changes.
Are you eliminating the ability to claim an eligible dependent?
No. Parents who are eligible to claim this amount can continue to do so.
In addition to the enhanced Universal Child Care Benefit, this spring families received nearly $2 billion in tax refunds through the Family Tax Cut. The Family Tax Cut allows couples with children under 18 to split their income and reduce their tax burden by as much as $2,000. We have also increased the maximum dollar limits that can be claimed under the Child Care Expense Deduction by $1,000. In addition, we have doubled the Children’s Fitness Tax Credit and made it refundable.
Through these initiatives we are ensuring that more money goes directly into the pockets of hard-working Canadian families.
Member of Parliament
Prince George-Peace River
Chair, BC/Yukon Caucus