Child Benefits in Canada and How They Can Impact Spousal Support
Navigating the system to arrange for child and spousal support can be difficult, particularly as child benefits have changed over the years. It is particularly important to understand what child benefits are available if you have a child and the relationship of child benefits with any spousal support that may also be available.
The Former Universal Child Care Benefit (UCCB)
The UCCB was established to assist parents with young children, regardless of the parent’s income level. The UCCB came into effect in July 2006, after the release of the Spousal Support Advisory Guidelines. Under the UCCB, parents received a taxable benefit of $100 per month for each child under the age of 6. The UCCB for a child who was a child of the marriage was also included in the income of the custodial parent in determining spousal support (found in line 150).
The Former Canada Child Tax Benefit (CCTB)
The CCTB was set up to assist lower-income custodial parents, typically the recipients of child and spousal support payments until it was replaced by a new program in 2016. In some, more limited circumstances, the custodial parent and recipient of these benefits and credits could also be the payor of spousal support.
The New Canada Child Benefit (CCB)
Introduced in 2016, the CCB which combined and replaced the former UCCB and CCTB. The CCB is a tax-free monthly payment that is made to certain eligible families to help them with the cost of raising children while they are under 18 years of age. The CCB might also include other benefits such as the child disability benefit or related provincial and territorial programs.
How is the CCB calculated?
The CCB is calculated on a yearly basis for the period of July to the following June. Factors considered in the calculation of the CCB are:
The number of children who live with the applicant;
Ages of the children;
Adjusted family net income (from line 236 of the income tax and benefit return)
Eligibility of child(ren) for the child disability benefit.
The family or marital status of the applicant can also factor into the CCB calculation because families that bring in more than $30,000 a year in net income will have less of the CCB benefit available to them. Likewise, any spousal support payments received by the applicant will also become part of the family income and might minimize the availability of the CCB.
The basic benefit for a family with a net income of less than $30,000 is roughly as follows:
- for every child under 6 years of age = $ 6,400.00/ year.
- for everychild between the ages of 6 and 17 = $5,400.00 / year.
- families with one eligible child: the reduction is 7% of the amount of AFNI between $30,000 and $65,000, plus 3.2% of the amount of AFNI over $65,000
- families with two eligible children: the reduction is 13.5% of the amount of AFNI between $30,000 and $65,000, plus 5.7% of the amount of AFNI over $65,000
- families with three eligible children: the reduction is 19% of the amount of AFNI between $30,000 and $65,000, plus 8% of the amount of AFNI over $65,000
- families with four or more eligible children: the reduction is 23% of the amount of AFNI between $30,000 and $65,000, plus 9.5% of the amount of AFNI over $65,000
The Relationship Between Child benefits and Spousal Support
Child support must be calculated first and given priority over spousal support. As well, the differential tax treatment of child and spousal support must be considered, complicating the calculations. Despite the CCB being a benefit meant for the child, it is reliant on the parent(s) income and therefore other support payments will play a role in the eligibility of the applicant receiving the full benefit.
The interesting thing about the usual relationship between benefits and supports meant for the children and those provided for the spouse is that child support is strictly for the benefit of the child. You can see the inverse, however, where spousal support can have an adverse effect on the amount received in the CCB. As a result, other support received by the applicant will affect the amount received by way of Canada Child Benefits.
Speak to Valerie M. Little, Family Lawyer for Burnaby, Coquitlam, Langley & New Westminster
If you need more information about the Canada Child Benefit as it relates to your specific situation, contact Valerie M. Little,family lawyer for Burnaby, Coquitlam, Langley & New Westminster. Your consultation with Ms. Little can be arranged by calling 604-526-3333 today.