Canada Child Benefit – How will it affect my family?
Jun 14, 2016
There were many changes in this year’s Federal Budget and Canadians families should pay attention specifically to the new Canada Child Benefit (CCB). Starting July 2016, this will replace both the former Universal Child Care Benefit (UCCB) and the Canada Child Tax Benefit (CCTB).
The Canadian Government envisions that the new policy will be:
- Simpler
- Tax-free
- Better targeted
- Much more generous
Let’s review the details of the new plan and identify exactly how it will affect your family.
New Plan
Under the rules of the new plan you can get:
- Up to $6,400 per year ($533 per month) for each child under the age of 6
- Up to $5,400 per year ($450 per month) for each child aged 6 to 17
- An additional $2,730 per year if your child qualifies for the disability amount
Households with an annual net income below $30,000 will receive the maximum payment.
The total payment you will actually receive is dependent on:
- Your household net income
- The number of children you have
- Your children’s ages
Want to know how much you may be entitled to? The Government has provided a calculator to provide an estimate:
http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html
Conclusion
The majority of Canadians will benefit from an increased payment relative to the old rules. However, this does not mean that everyone wins. High-income earners will potentially be cut out from receiving any child benefit dollars.
Here is a situation where RRSP planning becomes especially important for families. As the amount you get is based on 2015 family net income, the deduction of your RRSP contribution will help reduce family net income levels, along with potential deductions from child care expenses and carry charges on investments.
If you have questions regarding the new Canada Child Benefit, please contact your Rogers Group Financial advisor.
