Anticipated Result: Non-compliance is identified and addressed

To ensure that entitled clients get the proper amount, we devoted significant resources to our validation and controls program.

Based on sampling 1 , we estimate that 95.5% of CCTB accounts for 2001-2002 (the benefit year of our most recent study) had complete and accurate payment and account information, compared to our 95% benchmark, an indication that we maintained high overall compliance. This study, selected by random sample, compares favourably to the results of our study for 2000-2001, which reported that the CCTB rolls had complete and accurate information for over 94% of clients.

We also target our various validation projects towards accounts we have identified as high-risk. Further refining our criteria for selecting accounts contributed to a third consecutive increase in validation adjustments and adjustment rates, which rose to 51.4% among selected accounts in 2003-2004 (Figure 16).

Figure 16 Number of Cases Reviewed – Number and Percentage of Adjustments

In total, we expanded the number of reviews we conducted this year to 168,400, over 5% of the CCTB recipient population. As our random sample indicates that high overall compliance has been maintained, the increase in adjustment rates from our validation reviews seems to show that our account selection criteria are effective. To ensure that clients are notified in a timely manner of the results of the reviews that we initiate, we have also developed a service standard for validation activities that was formalized in the summer 2004 edition of the CCTB and GST/HST credit pamphlets.

During the year, we implemented the new validation case management application which we had piloted in April 2003. Although the statistical package that will help us measure our results by providing, for instance, the dollar value of adjustments will not be fully functional until 2004-2005, the application should increase our efficiency when processing compliance projects.

For the second consecutive year, the growth in CCTB overpayment debt has been reduced, another indication that payments are being properly controlled. Overpayments occur, when, for example, the CCTB is paid to clients who delayed telling us that they no longer have children in their care, or through our validation efforts. Net CCTB overpayments were $23.2 million in 2003-2004, representing 0.28% of the $8.1 billion issued during the year. This compares to $29 million in 2002-2003 (0.37% of program payments made that year). Accumulated debt from CCTB overpayments since the beginning of the program in 1993 stands at just over $199.2 million (net of write-offs), which represents 0.29% of the $69.4 billion in payments made under the program.

We also reviewed the claims of over 233,000 individuals for the Disability Tax Credit. The number of claims that were denied dropped to 10.8%, down from 20% in 2002-2003. This decrease is at least in part attributable to the changes we made to simplify the DTC certificate, which allowed applicants to self-identify and make more informed judgements on potential eligibility.

1 Compliance Levels Exhibited by Recipients of Canada Child Tax Benefits – Final Results (April 19, 2004) – target population as of November 2001.

Date modified:

2004-10-28