Under the previous government I had three different calculators to figure out how much people would receive as tax credits and benefits related to their children but this has all disappeared with the new Liberal budget.
Previously, families received the Universal Child Care Benefit (“UCCB”) of $160 per month per child under the age of 6 and $60 per month per child aged 6 to 17. These amounts were taxable and included in the income of the lower earning spouse.
Families received the tax-free Canadian Child Tax Credit of $1,471 per year per child in 2015/2016 that was clawed back completely if your family income exceeded $118,251 (if you had one or two children) or $157,601 if you had three or more children.
There was also a National Child Benefit Supplement of $2,279 per year for the first child, $2,016 per year for the second child that was also clawed back if family income exceeded $26,021.
Finally, each family was eligible for the Children’s Refundable Fitness Tax Credit of $150 per year and Children’s Non-Refundable Arts Credit of $75 per year. These are each being cut in half for 2016 and will be gone by 2017.
To further complicate things, I was usually trying to figure out these amounts so that divorcing couples could figure out how to split these amounts that the government was going to be giving them for their children. These would then need to be outlined in their separation agreements.
Under the new Liberal government, this has all changed and I have to say hooray.
The budget states that families will receive $6,400 per year per child under the age of 6 and $5,400 per year per child aged 6 to 17. These amounts will slowly get clawed back based on adjusted family net income and will disappear completely for families with income exceeding $140,000.
Here is a link to the Liberal’s calculator.
So while I’m happy about the simplicity of the new Liberal Canadian Child Benefit, most families will be happy because they will be receiving more money with this new benefit. The fact that the entire benefit is tied to a family’s income makes it more fair than the system under the old regime where everyone got the UCCB and Fitness and Arts Credits regardless of how low or high their family income was.