The ‘Canada Child Benefit’, called the ‘CCB’ in this article, is a tax-free monthly payment to parents to help with the cost of raising children under 18 years of age and is administered by the Canada Revenue Agency. On July 1, 2016, the Government of Canada, replaced the former ‘Canada Child Tax Benefit’ and ‘Universal Child Care Benefit’ with the CCB.
How much is the Canada Child Benefit?
A parent with an annual income of less than $31,120 will receive the CCB, while those with higher incomes receive a declining amount. In 2020, the CCB was $6,639 per year ~($553 per month) for each child under the age of 6 years of age and $5,602 per year (~$466 per month) for each child aged 6 to 17 years of age. The CCB increases annually and is indexed to inflation. The CCB drops as income rises. In the past, the CCB amount dropped when the income was higher than $31,120. The reduction was ~23%. These amounts and calculations change every year.
Who is Eligible for the Canada Child Benefit?
You must meet all of the following 4 conditions to get the CCB. You are a resident of Canada (1); you are a Canadian citizen (or a permanent resident, or a protected person, or a temporary legal resident who has lived in Canada for the previous 18 months, or are of the First Nations)(2); you live with a child who is under 18 years of age (3); and you are ‘primarily responsible’ for the care and upbringing of the child (4).
Who is primarily responsible for the Canada Child Benefit?
The parent who is primarily responsible for the care and upbringing of the child is entitled to the CCB. That parent meets the criteria if they supervise the child’s daily activities and needs, make sure the child’s healthcare needs are met and arranges for their childcare. Since only one CCB payment is granted per household, when two parents reside in the same home as the child, the female parent is presumed to be primarily responsible for the children.
Shared parenting
If the parents are separated and do not reside together, and if the child lives with each parent equally but not less than 40% of the time over the course of the year, then both parents are entitled to the CCB. In that case, both parents should apply for the CCB and each parent will receive 50% of the CCB based on their own income level.
When is the Canada Child Benefit calculated?
Every July, the CCB is recalculated based on each parent’s income from the previous year. For example, the CCB is recalculated for the period from July 2022 to June 2023 based on each parent’s 2021 income. In other words, a change in the 2021 income will be reflected in the CCB starting in July 2022.
Do the provinces also have their own Canada Child Benefit?
Some provinces and territories offer additional financial assistance to parents and may be added to the CCB payments. In Ontario, the Ontario Child Benefit is a tax-free amount paid to low-income parents. The Ontario Child Benefits are paid with the CCB in a single monthly payment. In 2023, this was $125 per month for each child under 18 years of age provided the parent’s income was less than $23,044.
Does Spousal Support affect the CCB?
Because spousal support is taxable income to the support recipient and tax deductible by the support payor (child support is not taxable nor deductible), the CCB and GST/HST Credits will be affected by the amount of spousal support received and could reduce the CCB.
Canada Child Benefit & Shared Parenting
For those with shared parenting using MySupportCalculator or Divorcemate, the software will automatically share the CCB and GST/HST credits between the parents. Therefore, each parent’s entitlement will be determined based on their respective incomes, and each will receive one half of their annual CCB entitlement, paid out on a monthly basis, and the GST/HST Credits paid quarterly. There is no need to input the income from the CCB or the GST/HST Credits as the software includes the CCB in the calculation of support based on the parents’ income and the parenting schedule.
Conclusion
The ‘Eligible Dependant Credit’ is not the same as the CCB. It used to be called the ‘Equivalent-to-Spouse Credit’ and is available to a parent who is divorced and who is supporting a child under age 19 years old who is related to the parent by blood, marriage, common-law partnership or adoption. The ‘Eligible Dependant Credit’ cannot be claimed by more than one parent for the same child in the same year. It cannot be claimed if the parent is remarried or has a new common law spouse and is claiming the spouse for the ‘Eligible Dependant Credit’.
Details of this and further information can be obtained at the CRA website at www.cra-arc.gc.ca or by calling toll-free 1-800-387-1193.
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