Canada Child Benefit (CCB): Everything You Need To Know (Case Study)

The aim of the Canada Child Benefit or CCB is to provide parents in Canada with financial assistance in raising their children. The CCB amount you’ll receive annually is derived from the tax return each individual files each year and includes other considerations, such as related provincial and territorial benefits and disability benefits due to children.

Even though the CCB payments remain fixed annually, It is important here to know that – the Canadian Child Benefits payments are paid out on a monthly basis and on a particular date every month.

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What Is The Canada Child Benefit (CCB)?

In case you did not know – The Canada Child Benefit (CCB) evolved from the Canada Child Tax Benefit. If you are parenting any child under 19 years of age, calculations are made every July on your tax return for the previous year. Based on your income filed, your Canada Child Benefit is determined for the next fiscal year.

If your income is above a certain level, you will not receive this benefit. Mind you, by income I mean both husband and wife or family income together.

For example – If you make $50,000 and your wife made $35,000 in the previous year, your total income is $85,000 and that’s the amount which will determine how much of CCB payments you’ll receive monthly.

Of course, there are various other factors too but income is the main. This also highlights the importance of filing taxes each and every year, even if you had absolutely no income in the year prior.

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Typically, the Canada Child Benefits payments are made by direct deposit to your bank account, on or before the 20th day of the month. The calculations are complex, and depending on the age of the child/ children and how many there are.

The website of the Government of Canada (canada.ca) provides an awesome calculator for you to estimate CCB payments, with reasonable accuracy, what your benefit payable could be.

It also takes into account all the related benefits as noted above, so it may actually be a better point of reference than your personal tax accountant.

Canada Child Benefits In 2020 and Beyond 

Canadian Government is constantly working on increasing the Canada Child Benefits payment amounts to families keeping in mind the increasing inflation rates and rising costs to run families. 

The non-taxable CCB benefit was effective from July 1st, 2016. It quickly replaced the universal child care benefit (UCCB).In the financial year 2019, the child benefit payment amounts were $6,639 per child under the age of six and a maximum of $5,602 per child aged six through seventeen.

In 2020, the maximum CCB benefit amount per family is $6,765 – and that’s again per child under the age six and the benefit amount further decreases to $5,708 per child aged six to seventeen. 

Like I said, the numbers and payments are increasing every year to meet the inflation and cost of raising kids. Shout out to the Canadian Government for keeping this program alive, which is saving thousands of families and especially kids. 

CASE STUDY – Canada Child Benefits Payments

In order to give you an idea of the variance in dynamics, I will show you how this part of your tax return produces, with 2 fictitious families; one from the east coast, the other from the west.

Scenario 1: Family in Nova Scotia, with 2 children (ages 6 and 12)

Karen and her partner made $20,000 and $30,000 “net income” respectively last year.

Their 2 children were born in 2013 and 2007; both live in the home with their parents and neither would qualify as a disabled dependant. Let us assume they live in Nova Scotia all year.

Their previous year’s UCCB was $16,000 but had to pay back $100, due to some error they are still disputing. Ignoring Canada’s Workers Benefit (CWB), their total benefit payable this year would be:

1. Quarterly GST/ HST credit – $221.50
2. Quarterly NS affordable living tax credit – $42.50
3. Monthly CCB – $900.14
4. Monthly NS child benefit – $0

TOTAL BENEFIT FOR THE YEAR – $11,857.68

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Scenario 2: Single Parent Family in British Columbia, with 3 children (ages 2, 4 and 14)

Sharla made $30,000 “net income” last year. Her 3 children were born in 2017. 2015 and 2005; she shares custody with one of her ex-partners (the 2 younger ones) but not with the father of her oldest. The youngest is a disabled dependant.

She lives in British Columbia all year. Her previous year’s UCCB was $20,000 We will again ignore Canada’s Workers Benefit (CWB) for the sake of simplicity.

Her total Canada Childcare Benefit payable this year would be:

1. Quarterly GST/ HST credit – $221.50
2. Quarterly BC climate action tax credit – $88.62
3. Monthly CCB – $1020.08
4. Monthly Child Disability Benefit – $118
5. The Monthly BC early childhood tax benefit – $55

TOTAL BENEFITS FOR THE YEAR – $15,557.44

Canada Child Benefits (CCB) – Benefits Explained Further

Disability: A Disability Tax Credit (DTC) application can be initiated by parents or caregivers of individuals. Once a medical practitioner can verify (on the application form) an acceptable disability, the applicant can expect this calculation to go through. It also opens up the possibility of gaining credits or benefits from other disability programs, particularly through the province or territory of residence.

Examples of disabilities include (in general terms) diabetes, dementia, kidney disease, amputations and paralysis. Typical applicants are spouses or common-law partners, parents, and adult care-givers for their parent(s).

GST/ HST credit: This is a help based on the amount of GST/ HST paid in the previous year. It is generally available to Canadian residents (for income tax purposes) over 19 years of age who were a spouse/ common-law partner and/ or parent living with your child/ children the month before the payment is made. The payments are made quarterly.

Canada Workers Benefit: This replaced the Working Income Tax Benefit. The aim of this is to provide relief to families who are considered low income. It also has strong ties to the disability benefits available federally, provincially and territorially.

The new, re-vamped version has a goal of lifting around 70,000 Canadians out of poverty. It is automatically calculated on your annual return, and thus immediately applied, if any money at all is due under the program.

The Canada Child Benefit, with its ties to other benefit programs, has a noble purpose of assisting families who may otherwise have a hard time providing all the basic necessities for taking care of their loved ones. An all-encompassing benefit shows the depth of the government(s) in caring for the well-being of all Canadians and Canadian Residents.

Conclusion

In this article, I’ve gone through the Canada Child Benefit (CCB) and have also mentioned some real-life examples along the way.

We all need to thank the Canadian Government for helping families with raising children to meet the cost.

Even though the cost of living in Canada is really high, the CCB payments are really helpful to families with low-income levels.

Again, if you have any further questions, please let me know in the comments below. I’ll be more than happy to help you out with the information.

If you found the content of this article useful do share it on social media and help spread the word. Thank you.

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