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What is the Canada Child Tax Benefit?

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This article is brought to you by Insurance For Children and the creator of Child Plan ™ the fastest growing alternative to the RESP. Child Plan, One Plan For Life. 

What if you could receive free money from the Government deposited in your bank account every month until your child turns 18? Where you don’t have to work one day to earn it, there are no restrictions on how to use it and you don’t have to pay taxes for it. Sounds amazing right? 

That’s what it feels like when you receive your Canada Child Benefit. It’s a great feeling when you are given free money without restrictions or strings attached to help you provide for your child today and for their future. 

Now let’s consider that instead of using the money to cover daily expenses or spending it, you decided to use the government’s tax free gift to invest for your child’s future? There are so many things you need to pay for today and this could really help but you know that you will one way or another also need to plan for your child’s future.

Canada Child Benefit (CCB)

The Canada Child Benefit (CCB) is a tax-free monthly benefit to eligible families to help with the cost of raising children under 18 years of age. 

If eligible, the Canada child benefit payments you receive can include additional benefits for your children, including a child disability benefit and provincial and territorial benefits.

For families with children under age 18 the Canada Child Benefit:

  1.  Is paid to couple or single parent families with children until they’re 18 years old.
  2.  You have complete freedom to use the funds for any purpose.
  3. The CCB is completely tax free! (you don’t pay any income taxes on the money you receive each month and no taxes are deducted from the payments you receive).
  4. The CCB is not a refund for children expenses, like child care, medication or anything.
  5. You don’t need to pay an accountant to complete any complicated forms. Your annual amount is tied directly to your income tax file at CRA so they know every year how much to pay you.

The Canada Child Benefit is a program that tells parents: you know what’s best for your child’s future, so here is the money to help you…

What is the Difference Between Child Tax Benefit and Canada Child Benefit?

The Canada Child Benefit (CCB) replaced the Canada child tax benefit (CCTB) and the universal child care benefit (UCCB) July 1, 2016. The government made this change to provide more generous benefits to parents with lower incomes and to simplify the process from filing separate forms to receive the benefits. In addition, rather than the parents applying for the benefits the government tied it to the income tax filing of the parents, so that each year it’s adjusted up or down depending on the parents family income. 

Who is Eligible for Child Tax Benefit in Canada

The Canada Child Benefit is based on your family’s net annual income reported every year on your tax returns. To receive your Canada Child Benefit every year, you must file your taxes. If you don’t file your taxes they will discontinue your benefits the following year.

The Canada Child Benefit is automatically deposited into the bank account of the parent who claims the children as dependents on their tax return. The Canada Child Benefit (CCB) is typically deposited into your bank account on the 19th or 20th of each month except for December when it will be deposited on the 13th.

Summary

Imagine not having to stress every month, after working long hours, paying taxes on the income you worked so hard for and then paying all the expenses of finding money somewhere to save for your child’s future?

In today’s pandemic world, where there are so many unknowns and feelings of lack of stability, it’s best to plan for any financial situations in your child’s life. 

To allow them to feel confident in their career choices, or buying a home, and even maybe starting their own business because they are financially covered to succeed. 

To learn more about how to invest for your child’s future and request a Child Plan™ personalized illustration, click here , and find out how to invest your free CCB money wisely for their future.

FAQ

How Much Do You Get for Canada’s Child Tax Benefit?

Monthly CCB payments are for each child and based on the number of children in your care, the age of the children, your marital status, and your adjusted family net income (AFNI) from the previous year’s tax return.

The CCB is meant to deliver assistance to families, so payments start to decrease if your AFNI exceeds $32,028. Additionally, if you’re over this income threshold, the CCB is reduced for each additional child you have.

However, a typical family with one child under the age of 1 to age 6 and a family income of $80,000 per year will receive $323 per month or $3,878 per year in 2022. The monthly CCB benefit will be reduced from the child’s age of 6-18.

Families with a total AFNI of over $200,000 per year don’t receive any CCB benefits. 

CCB calculations and adjustments can be a bit complicated. However, the Government of Canada has an online CCB calculator that can help you estimate exactly how much CCB you’ll receive each month. However, we’ve found a much simpler CCB calculator at https://ativa.com/canada-child-benefit-calculator/.

What is the Universal Child Tax Benefit in Canada?

The Universal Child Care Benefit (UCCB) assists Canadian families, as they try to balance work and family life, by supporting their child care choices through direct financial support. The UCCB is for children under the age of six years and is paid in installments of $100 per month per child. 

How can we access Canada’s child tax benefit?

To get your benefit and credit payments, you must do your taxes every year, even if you have no income. The information from your tax return is used to calculate your payments. You can sign up for either direct deposit or check by mail. 

To apply for the CCB, you can apply online using the Automated Benefits Application. The information needed for the ABA services can be found in the provincial/territorial birth registration pack provided by your province.

What Should You Do With Your Canada Child Benefit?

The government of Canada doesn’t want to dictate to you what you should do with your CCB benefit, but their hope is that you use a portion of the funds to invest in your child’s future.

Since 1998 the only savings plan parents were told existed was the RESP. A government program with government rules on where your child goes to school, what they study and how the money you saved can be used.

Another option that’s been used by parents to invest for their children’s future since 1847 is a Child Plan ™ Participating Whole Life Plan. Participating whole life is the only tax-free investment parents and grandparents can open for their children and grandchildren in Canada.

From the day you open a Child Plan TM, your child or grandchild will receive a tax-free annual dividend for life, and they have the freedom to use the cash value in their plan for:

  • Any education they wish, anywhere in the world without restrictions
  • Buy their first home
  • Start their own business if that’s their dream
  • For any financial need in life

At Insurance For Children, we educate and empower parents how to use their tax-free gift from the government to build a tax-free investment for their children’s futures.

As one parent said once. I’ll open a Child Plan ™  for my child, use up to 50% of the government’s tax-free Canada Child Benefit (CCB) and one day when I transfer their Child Plan ™ tax-free to them and use their plan to buy their first home, they can send a thank you note to the government for the house.

To learn more about Child Plan ™ for Grandchildren, please visit insuranceforchildren.ca.

Sample illustration of Child Plan™ Cash and Insurance Values

Based on a Monthly Deposit of $250 per month

Age Accumulated Cash Value Life Insurance Value
20 $82,568 (Education) $612,728
35 $177,953 (House) $1,115,297
45 $303,299 (Security) $1,115,297
65 $834,276 (Retirement) $1,666,824

Sample illustration is based on a monthly contribution of $8.32 a day/$250 a month for twenty years, starting when the child is less than 1 years old. Cash and life insurance values are based on the current dividend interest rate of 6% from a Canadian life insurance company. This example is strictly for illustrative purposes only, the annual dividend scale is not guaranteed and values may differ.

Personalize Your Child Plan™

Request a Child Plan™ Illustration and see how much cash value your child will have for their education and for life.

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*illustrations are reflective of the annual premium amount

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