CHILD BENEFITS INCREASED

In addition to the Family Tax Cut, the federal government introduced changes to other child benefits this fall.

The Universal Child Care Benefit [UCCB], a monthly benefit paid to parents for each child under the age of 6, has been increased from $100 to $160 per month. A second tier has also been created, for children ages 6 to 17 years old. Parents with children in this category will receive $60 a month.

The increase will take effect in June 2015, at which time eligible families will receive retroactive payments for the first six months of 2015. As long parents are registered to receive other federal child care benefits, no registration is required to receive these benefits.

As a consequence of this measure, the Child Tax Credit, which was federal non-refundable tax credit that a parent received for each child under the age of 18, has been eliminated as of 2015. The credit will be still available for 2014. The total tax credit is $2,234, and taxpayer can save up to $335 from this credit.

UCCB payments will continue to be taxable, as they have in the past. The income will be reported on the tax return of the lower earning spouse. Assuming that the recipient is in the lowest tax bracket, the total net payment that parent would receive in the year is $576. Combined with the $335 that is lost from the elimination of the Child Tax Credit, the net gain for each child would be $241

Receipt of these benefits have no effect on eligibility for the Basic Child Tax Benefit, as income received under the UCCB does not affect this program.

One benefit of the increase in the UCCB for low income families is that they may not have earned enough income to be able to use the non-refundable Child Tax Credit in the past, whereas they will receive a benefit through this program.