What Child and Family Benefits Are Available?

By Randall Orser | Personal Income Tax

 

ChildrenThe government is making many changes in the child and family benefits that people receive as non-refundable tax credits and refundable tax credits on their taxes. They are also changing the monthly stipend that people receive for having kids under the age of 16.

Based on proposed legislation, a new Canada child benefit (CCB) will replace the universal child care benefit (UCCB) and the Canada child tax benefit (CCTB) in July 2016. The Canada child benefit (CCB) will be a tax-free monthly payment based on adjusted family net income.

If you now receive the UCCB or the CCTB or both, you do not need to apply for the new CCB. However, you and your spouse or common-law partner, if applicable, must file a 2015 income tax and benefit return, even if you don’t have income, so the CRA can calculate your payment.

The CRA will issue the last regular UCCB and CCTB payments on June 20, 2016. The CRA will issue the first CCB payment on July 20, 2016. If the CRA currently deposits your payments into your bank account, this will continue. If you don’t have direct deposit, it is highly recommended that you do. CRA will eventually stop issuing cheques in the very near future.

Example

Robert and Mary are married with three boys Jonos (13), Jamie (9), and Peter (2) living in Vancouver, British Columbia. Their combined family income before taxes is $60,000, and receive $3,600 for the UCCB at the moment. The estimated Canada child benefit is $12,843.96 for the year July 2016 to June 2017, or $1,070.33 per month. This is made up of $1,015.33 for the Canada child benefit and $55.00 for the British Columbia early childhood tax benefit amount.

To continue receiving the benefit and credit payments that you are entitled to, you have to file your income tax and benefit return on time every year, even if you do not have income in the year. If you have a spouse or common-law partner, they also have to file a return every year.

Will you be eligible?

The eligibility rules for the CCB are generally the same as the CCTB. To be eligible for the CCB, you must meet all of the following conditions:

  • You must live with the child, and the child must be under 18 years of age.
  • You must be primarily responsible for the care and upbringing of the child.
  • You must be a resident of Canada for tax purposes.
  • You or your spouse or common-law partner must be:
    • a Canadian citizen
    • a permanent resident
    • a protected person
  • a temporary resident who has lived in Canada for the previous 18 months, and who has a valid permit in the 19th month

Do you share custody?

You share custody if the child lives with you and another individual in separate residences on a more or less equal basis. The child may regularly alternate between residences in the following cycles:

  • four days with one person and three days with the other
  • one week with one person and the next week with the other
  • any other regular alternating cycle

Both individuals must be primarily responsible for the child’s care and upbringing when the child lives with them. Each eligible individual will get 50% of the payment he or she would have received if the child lived with him or her all of the time. If you have just entered into a shared custody situation you have to apply for benefits.

Although a court order might state which individual should receive the CCB, the CRA is bound by the Income Tax Act, which is the legal authority the CRA uses to determine who eligible individuals are.

There are also two other credits for children: Children’s Fitness Credit and Children’s Arts Amount. Rumour has it that these credits will be eliminated for either the 2016 tax year or the 2017 tax year. We’ll keep you posted once we know more.

Children’s Fitness Tax Credit

The Children’s Fitness Tax Credit allows you to claim eligible fees paid in the year up to a maximum of $500 per child (an additional amount of $1,000 is available if the child is eligible for the Disability Tax Credit and a minimum of $100 has been paid for eligible fees in the year). Eligible fees include an amount paid related to the cost of registration or membership for your or your spouse’s or common-law partner’s child in a prescribed program of physical activity. The child must have been under 16 years of age (or under 18 years of age if eligible for the disability tax credit) at the beginning of the year in which an eligible fitness expense was paid.

This credit has been changed in 2015 from a non-refundable credit (reduces the amount of tax you pay) to a refundable tax credit (you actually get the credit itself). You only get 15% of the amount you claim, so if you claimed the maximum of $1,000 then you get $150 refunded to you.

Children’s Arts Amount

You can claim to a maximum of $500 per child the fees paid in 2015 relating to the cost of registration or membership for your or your spouse’s or common-law partner’s child in a prescribed program of artistic, cultural, recreational, or developmental activity.

The child must have been under 16 years of age (or under 18 years of age if eligible for the disability tax credit) at the beginning of the year in which an eligible arts expense was paid. You can claim this amount if another person has not already claimed the same fees and the total claimed is not more than the maximum amount that would be allowed if only one of you were making the claim.

Children with disabilities – If the child is eligible for the disability tax credit and is under 18 years of age at the beginning of the year, you can claim an additional $500 if a minimum of $100 is paid for registration or membership fees for a prescribed artistic program.

To qualify for this amount, a program must:

  • be ongoing (last at least eight consecutive weeks, or in the case of children’s camps, five consecutive days);
  • be supervised; and
  • be suitable for children.

The program also has to meet at least one of the following criteria:

  • it contributes to the development of creative skills or expertise in an artistic or cultural activity;
  • it provides a substantial focus on wilderness and the natural environment;
  • it helps children develop and use particular intellectual skills;
  • it includes structured interaction between children where supervisors teach or help children develop interpersonal skills; or
  • it provides enrichment or tutoring in academic subjects.

An activity that develops creative skills or expertise is eligible only if it is intended to improve a child’s dexterity or co-ordination or helps in acquiring and applying knowledge through artistic or cultural activities such as literary arts, visual arts, performing arts, music, media, languages, customs, and heritage.

The above are the credits for children currently available to you the taxpayer. Unfortunately, the non-refundable tax credit amount for children under 18 years of age has been eliminated and replaced by the enhanced universal child care benefit, which, of course, is now being replaced by the Canada child benefit.

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