Based on proposed legislation, a new Canada child benefit (“CCB”) will replace the universal child care benefit (“UCCB”) and the Canada child tax benefit (“CCTB”) in July of 2016. The first CCB payment will be made on July 20, 2016. The CCB is a tax-free monthly payment based on adjusted family net income. There is no need to apply for the new CCB if you already receive the UCCB or CCTB.
- You must live with the child (under 18);
- You must be primarily responsible for the care and upbringing of the child;
- You must be a resident of Canada for tax purposes; and
- You or your spouse/common-law partner must be a Canadian citizen, permanent resident, protected person, or temporary resident (for the previous 18 months) with a valid permit.
The amount of your monthly payment depends on the number and ages of the children in your care and your adjusted family net income. The maximum amount payable under the benefit is $6,400 per year for each child under the age of 6 and $5,400 per year for each child aged 6 through 17.
If you have shared parenting of your child (child lives with each parent at least 40% of the time) and therefore both parents are primarily responsible for the child’s care and upbringing, then each eligible individual will receive 50% of the payment he or she would have received if the child lived with him or her primarily.
According to the Income Tax Act, you cannot contract out of the requirement to split the CCB in shared parenting arrangements even if you have a written agreement or Court order. If you attempt to contract out of the 50/50 division of the CCB, then you are at risk of a reassessment by the Canada Revenue Agency of all benefits paid.