Conservative Government’s Enhanced Universal Child Care Benefit
July 20, 2015
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.
QUESTIONS AND ANSWERS
- How many payments were made by cheque versus direct deposit?
Approximately 1.2 million Universal Child Care Benefit cheques will be mailed out, totaling about $720 million. The remaining 2.7 million payments will be made by direct deposit totaling almost $2.3 billion.
- What will families receive on July 20?
On July 20, families should get a lump-sum payment of $520 for each child under six and $420 for those 6 through 17. Thereafter, monthly payments will continue at $160 for each child under six and $60 for each child 6 through 17.
- Can a family apply for the increased UCCB now?
Yes. Families can apply for the increased UCCB online by using “Apply for child benefits” through the CRA’s My Account service or by completing the Canada Child Benefits Application (Form RC66) and sending it to their tax centre with any required documentation identified on the form. You can find all the information you need by going to www.canada.ca/taxsavings.
- What should families do if they haven’t received their payment?
Although all payments will be sent July 20, those who do not receive payments via direct deposit may not receive their cheques until later in the month. If someone suspects there is an issue with their payment or to find out more about the UCCB, visit www.Canada.ca/TaxSavings or call 1 800 O-Canada.
- Is the UCCB taxable?
Yes, the UCCB is a taxable benefit. If you, or your spouse or common-law partner, receive the UCCB, you must report it on Line 117 of your income tax and benefit return. CRA will provide UCCB recipients with RC62, universal child care benefit statement.
- What was the Universal Child Care Benefit before it was changed?
In Budget 2006, the Government introduced the Universal Child Care Benefit, which provided all eligible families with $100 per month for each child under the age of 6. The Universal Child Care Benefit provided direct federal support to approximately 1.6 million families with over 2 million young children.
- How is the Universal Child Care Benefit being changed?
The Government has increased the Universal Child Care Benefit. The Universal Child Care Benefit now provides $160 per month for each child under the age of 6 and $60 per month for each child aged 6 through 17. Over the course of a full year, parents will receive almost $2,000 for each child under the age of 6 and up to $720 for each child aged 6 through 17. About 4 million families are benefiting from the increased Universal Child Care Benefit.
- When will families receive the increased Universal Child Care Benefit?
The increased Universal Child Care Benefit took effect as of January 2015, with Canadians seeing the increased payments starting July 20, 2015:
- Existing Universal Child Care Benefit recipients—i.e. parents of children under the age of 6—automatically received higher monthly benefits starting with the July 2015 payment of the Universal Child Care Benefit.
- Parents who are eligible for the new benefit for children aged 6 through 17 began receiving $60 per month for each eligible child starting with the July 2015 payment.
- Over the course of a full year, parents will receive $1,920 for each child under the age of 6 and $720 for each child aged 6 through 17.
- To qualify, parents have to complete the Canada Child Benefits Application form, which is available from the Canada Revenue Agency website. Parents who had already completed this form to access other child-related benefits do not have to re-submit the form, unless their family situation has changed.
The July 2015 payment includes up to six months of the increased benefit amounts to cover the January to June 2015 period as well as the July payment.
- Why are families receiving these back-payments only now, in July?
The Harper Government made the commitment to increase the UCCB once the federal budget was balanced. Therefore, the adjustment to the UCCB was made in the 2015 Economic Action Plan. In order for the new payments to be made, approval of the 2015 Economic Action Plan from the Parliament and the Senate was required. That approval was received at the end of June.
- What if a person has never applied for the UCCB before? Can they receive payments for previous years?
Yes, if they apply and meet the eligibility conditions for those previous years, UCCB payments can be calculated and issued retroactively as far back as July 2006.
- What is the process for a person to obtain retroactive payments?
A person needs to apply, and the Canada Revenue Agency (CRA) will determine the eligibility for a retroactive period up to 11 months.
They should not delay applying as their application is considered late if it includes a period that started more than 11 months ago. The Income Tax Act gives the Minister the discretion to extend the period for filing an application beyond the normal 11-month period. However, additional information may be required to support their extension request, which can be found on the CRA web Qs/As: http://www.cra-arc.gc.ca/bnfts/cctb/fq_qlfyng-eng.html#q6.
- Are Canadians living outside of Canada eligible to receive this benefit?
To be eligible to receive the UCCB, recipients must be a resident of Canada for income tax purposes (i.e., have established sufficient residential ties in Canada). Canadians living abroad, such as military families, Foreign Service employees, and embassy personnel, are still eligible to receive the benefit.
- How did you determine up to 200,000 families with children were at risk of not receiving the benefit unless they apply?
Finance Canada estimates that approximately 4 million families are eligible for the increased UCCB. And we also know that currently, the UCCB has a 95 percent take-up rate nationally.
Therefore, about 200,000 families with children who may be eligible for the increased UCCB may need to apply.
Simply, families are dynamic. There are children born every day, which means there are new families eligible for the benefit every day, while at the same time some children turn 18 and become too old for the benefit. Additionally, changes in residency and child custody arrangements also impact the number of eligible families.
- How are the regional numbers calculated?
To calculate the regional numbers, we apply provincial/territorial “non-take-up” percentages to the total number of families with children under 18 in various geographic locations. As an example, in Nanaimo, there are about 10,210 families, and to that we apply the 4.9 percent non-take-up rate for British Columbia. This leaves us with about 510 families with children under 18 who may need to apply to receive the increased UCCB.
- How many new families have been signed up since you started your campaign?
We continue to sign up new families every week. As a result over 3.8 million families will get their payments today. The final tally of newly signed up families will be done in the coming weeks.
- Will the increased Universal Child Care Benefit affect the recipient’s eligibility for the purpose of federal income-tested benefits?
No, the increased Universal Child Care Benefit does not reduce benefits paid under the Canada Child Tax Benefit and the Goods and Services Tax Credit. The increased Universal Child Care Benefit is also not considered income for the purposes of federal income-tested programs delivered outside of the income tax system, such as the Guaranteed Income Supplement, the Canada Education Savings Grant, the Canada Learning Bond, the Canada Disability Savings Bond, the Canada Disability Savings Grant and Employment Insurance.
- What if a family doesn’t sign up in time to receive the increased UCCB payment this July?
Families needed to submit an application before May 15, 2015, in order to receive the increased UCCB payment in July 2015. If an application is received after this date, families will still receive the increased UCCB payment, including any retroactive payments, in a later month.
- How much has the existing benefit cost the federal government?
From July 2006 through January 2015, the federal government has issued approximately $22.6 billion in UCCB payments.
- What is the annual value of the increased UCCB?
The pre-tax value is:
Fiscal year 2014-2015 $3.987 billion
Fiscal year 2015-2016 $7.734 billion
- How have other child and family benefits been affected?
- The Canada Child Tax Benefit remains the same and is not impacted.
- The increased Universal Child Care Benefit replaces the Child Tax Credit
- Does the UCCB reduce other benefits?
The UCCB does not reduce benefits paid under the Canada Child Tax Benefit and the Goods and Services Tax Credit. The increased UCCB is not considered income for the purposes of the:
- Guaranteed Income Supplement;
- Canada Education Savings Grant;
- Canada Learning Bond;
- Canada Disability Savings Bond;
- Canada Disability Savings Grant; and
- Employment Insurance.