Lump sum child care benefit of about $500 per child hits parents’ bank accounts and mailboxes, totalling $3 billion in a single day
Saskatchewan – Employment and Social Development Canada
David Anderson, MP for Cypress Hills – Grasslands, celebrated the first installment of the Harper Government’s boosted Universal Child Care Benefit (UCCB) today. The newly increased child care benefit pays almost $2000 every year for each child under 6 and $720 for each child aged 6 through 17. With a retroactive payment from January 1, 2015, the Harper Government transferred almost $3 billion to 3.8 million families today—the largest single-day direct payment to families in history.
Starting today, payments of $520 for each child under 6, and $420 for each child aged 6 through 17 will be delivered to families across Canada. That means a family with two kids should receive as much as $1,000 today. Parents can spend this money on anything they choose, including child care services, back-to-school supplies, sports activities and much more, boosting the economy and creating jobs across Canada.
About 3.8 million families will benefit from the boosted UCCB—double the number of families that previously qualified. While the majority of families in Canada are waking up to this welcomed boost to their bank accounts, an estimated 200,000 families may have missed out because they did not apply. Families that are not currently receiving the UCCB, that have never received the UCCB, or that have never applied for the Canada Child Tax Benefit and have children under 18 in their care are encouraged to go to www.canada.ca/taxsavings to find out how to apply.
In addition to the boosted UCCB, families recently received nearly $2 billion in tax refunds this spring 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. Payments to families will also continue under the Child Tax Benefit, which remains unchanged.
- Approximately $110 million in UCCB payments sent today to about 129 000 families in the province of Saskatchewan.
- All families with children will benefit from the new Family Tax Cuts and Benefits Plan, which includes the Family Tax Cut, the increased UCCB, the Child Care Expenses Deduction and the Children’s Fitness Tax Credit.
- The UCCB has increased to $160 per month from $100 per month for each child under the age of 6, and a new benefit of $60 per month has been introduced for each child aged 6 through 17.
- Combined with tax relief and other measures for families introduced by the Government of Canada since 2006, a typical family of four can receive up to $6,600 in tax relief and enhanced benefits in 2015.
- Approximately 1.2 million cheques were sent to families across Canada. The remaining UCCB payments were made via direct deposit, for a total of more than 3.8 million payments.
- Low- and middle-income families will receive two-thirds of the overall benefits provided by the Government of Canada’s new family measures.
- The Family Tax Cut will eliminate or significantly reduce the difference in the federal tax payable by a one-earner couple relative to a two-earner couple with a similar family income.
“Ninety-two percent of Saskatchewan families have signed up and today are getting a welcome boost from the increased UCCB payment. This benefit will give families more flexibility in choosing the childcare options that best fit their individual needs.”
– The Honourable Pierre Poilievre, Minister of Employment and Social Development
“The UCCB will help every single Canadian family with children under the age of 18 as they try to balance work and family life, by supporting their child care choices through direct financial support. Our Government’s Family Tax Cuts and Benefits Plan puts more money in the pockets of everyone with kids.”
– David Anderson, MP for Cypress Hills – Grasslands
Supporting Canadian Families
Universal Child Care Benefit
In 2006, the Harper Government introduced the Universal Child Care Benefit (UCCB), which provides all families with $100 per month for each child under the age of six. The UCCB currently provides direct federal support to approximately 1.7 million families with young children.
The Government is proposing to enhance the UCCB by increasing the $100 monthly amount to $160 for each child under the age of six. In a year, parents will receive up to $1,920 per year for each child under the age of six.
The Harper Government is also introducing a new benefit of $60 per month, or up to $720 per year, for children age six through 17.
Enhanced payments for the UCCB will take effect as of January 2015 and will begin to be reflected in monthly payments to recipients in July 2015. Approximately four million families are expected to benefit from the enhancements under the UCCB.
The enhanced UCCB will replace the existing Child Tax Credit for the 2015 and subsequent taxation years. The enhanced UCCB, combined with the repeal of the Child Tax Credit, is expected to cost the federal government about $0.7 billion in 2014-15 and $2.6 billion in 2015-16.
The Family Tax Cut
The Harper Government is proposing a new Family Tax Cut of up to $2,000 for couples with children under the age of 18, effective for the 2014 tax year.
The proposed Family Tax Cut will take the form of a federal non-refundable tax credit that will allow the higher-income spouse to effectively transfer up to $50,000 of taxable income to a spouse in a lower income tax bracket, up to a maximum benefit of $2,000. Tax relief is calculated on the basis of a difference in federal tax before and after the transfer of income.
The Family Tax Cut will apply for the 2014 and subsequent taxation years. Couples were already able to claim the credit when filing their 2014 tax returns. To benefit from the credit, each spouse must file a tax return. Either spouse may claim the credit.
This measure is estimated to reduce federal tax revenues by approximately $2.4 billion in 2014-15 and $1.9 billion in 2015-16. More than 1.7 million families are expected to benefit from the new Family Tax Cut. This proposal will not affect provincial or territorial tax revenues.
Child Care Expense Deduction
The Child Care Expense Deduction (CCED) allows child care expenses incurred to earn employment or business income, pursue education or perform research, to be deducted from income for tax purposes. Generally, only the lower-income spouse can claim the CCED.
Currently, the maximum amount that can be claimed under the CCED each year is limited to the least of:
- The total amount spent on child care expenses;
- Two-thirds of the lower-income taxpayer’s earned income; and,
- The total of the maximum dollar limits for all children, that is $7,000 per child under age seven, $4,000 for each child aged seven through 16, and $10,000 for children who are eligible for the Disability Tax Credit, regardless of their age.
To better reflect the cost of child care expenses, the Government will increase the dollar limits of the CCED by $1,000 – i.e., to $8,000 from $7,000 per child under age seven, to $5,000 from $4,000 for each child aged seven through 16 (and for infirm dependent children over age 16), and to $11,000 from $10,000 for children who are eligible for the Disability Tax Credit.
These changes will apply for the 2015 and subsequent taxation years, and will reduce federal revenues by an estimated $15 million in 2014-15 and $65 million in 2015-16. More than 200,000 families are expected to benefit from the increases in the CCED limits.
Doubling the Children’s Fitness Tax Credit
The Government has doubled the Children’s Fitness Tax Credit (CFTC) and made it refundable to further help families making the choice to put their children in fitness activities. Making the tax credit refundable will ensure that families with incomes too low to be taxable can benefit from this measure.
Parents were able to take advantage of the new $1,000 maximum limit when filing their tax returns for 2014. The credit will be refundable as of the 2015 tax year, which will increase benefits to low-income families.
Together, the enhancements are expected to cost the federal government approximately $25 million in 2014-15, and $35 million annually thereafter.
The CFTC was introduced by the Government in Budget 2006 to help promote physical fitness among children by making it more affordable for Canadian families to register their kids in fitness activities. The proposed enhancements to the CFTC fulfill a commitment made by the Government in 2011. The enhancements will deliver additional tax relief to about 850,000 families who enroll their children in eligible fitness activities.