Our 2005-2006 Results

Achieving Our Benefit Programs Strategic Outcome

Eligible families and individuals receive timely and correct benefit payments, contributing to the integrity of Canada's income security system

With the introduction of the Goods and Services Tax Credit program in 1989, and the Child Tax Benefit program in 1993, the CRA became the federal delivery agent for non-taxable, income-based benefits and credits to individuals and families.

Spending for Benefit Programs in 2005-2006 totalled $669.5 million (1,677 FTEs).

Figure 7 Spending for Benefit Services

Our approach to achieving this strategic outcome

Our work in achieving our strategic outcome plays an important role in the efforts of federal, provincial, and territorial governments to provide support to families and children and to help reduce the depth of child poverty. In addition to the Disability Tax Credit, under which entitlements are delivered at the time of processing individual tax returns rather than as direct cash payments, the CRA currently administers three federal programs that issue benefit payments:

• the Canada Child Tax Benefit (CCTB);
• the GST/HST credit; and
• Children's Special Allowances (CSA).

In addition, our mandated flexibilities as an agency and the adaptability of our systems enable us to leverage our federal delivery infrastructure to administer a range of ongoing benefits, one-time payment programs, and other services on behalf of provinces and territories.

We believe Canadians are more likely to access benefit programs if they are informed about them and clearly understand what they need to do to meet eligibility requirements and receive their entitlements. The CRA provides benefit recipients with information, tools, and services that are accessible through a variety of channels. By doing this, we enable recipients to give us the information we need to register them on our benefit rolls and help to ensure that they receive timely and accurate benefit payments.

We use a variety of communication tools to attempt to maintain awareness of program requirements and take-up. Our most important vehicle is the CCTB application form; it is available on our Web site and it is also intended to be included in the kits that hospitals across the country give to new parents.

Ensuring timely and correct payments for millions of recipients, based on the accurate determination of program eligibility takes continuous planning and effort; it is not automatic. Changes to our payment processing systems are thoroughly planned, monitored and tested before implementation. New or revised programs are carefully negotiated with program owners to ensure that their requirements can be accomplished without interrupting existing program delivery commitments.

It is important that the payments we issue be timely and correct. For some recipients, tax-free benefit payments make up a substantial portion of their monthly income. For example, although the CCTB was paid to over 80% of families as of June 2005, the maximum annual benefit goes only to those with net income below $21,480. Over 933,000 families—almost 29% of all families receiving the CCTB—receive the maximum benefit. For these low-income families, receiving the expected payment on time (on the 20^th of each month) is essential if immediate household expenses are to be paid.

We believe that the majority of potential recipients apply for benefit programs only when they are likely to qualify. To ensure this is so, we conduct review activities to verify that benefits and credits are issued only to recipients who are eligible for them, and that they receive the correct amounts in accordance with applicable legislation.

Our validation work targets accounts that have been identified as high-risk for potential overpayments—for example, where we note inconsistencies in reported marital status or other information in our records. By reviewing 5% of CCTB accounts, we demonstrate a credible enforcement presence to benefit recipients. We devote resources to further developing our techniques and monitoring tools to better select accounts for review, with a view both to recouping overpayments and identifying instances where benefits have been underpaid. We continue to improve our knowledge of non-compliance and our ability to target areas of highest risk.

When our efforts are successful, eligible recipients can count on receiving the right benefit at the right time, and on knowing where the benefit came from and why.

In using the federal delivery infrastructure to administer a range of services on behalf of provinces and territories, our objectives are to improve service and eliminate duplication. For example, parents need to file only one application to be considered for income-based child benefits from both levels of government. Individuals need only “tick the box” when they complete their annual tax and benefit return to be considered for sales tax credits offered from both levels of government. Our aim is to maintain current programs and services administered for provinces, territories, and other government departments and expand them, where feasible.

For these reasons, our strategic outcome for Benefit Programs and the measures we employ to evaluate our success focus on the timeliness and correctness of the payments we issue, as well as on the contribution we make to provinces and territories as a key service provider.

Benefit Programs Strategic Outcome Measures

Payment timeliness

We know the importance of the payments we make to millions of recipients each month. To maintain our strong performance in payment issuance, our processes are designed with safeguards and checkpoints to contain the risks of delays or interruptions. These processes have allowed us to issue over 99.9% of payments on time under the CCTB, GST/HST credit, and the various provincial and territorial programs that we administer, meeting our target for 2005-2006 of 99%.

Benefit payments are correct

To contribute to the fairness and integrity of Canada's tax system, we work to ensure that individuals and families receive the proper entitlement—no more and no less. Based on the annual random sample of accounts we conduct to measure overall benefits compliance with program legislation, we estimate that approximately 95.1% of CCTB accounts had complete and accurate payment and account information in 2003-2004 (the benefit year of our most recent study) meeting our target of 95% (Figure 8) ¹ .

Figure 8 Percentage of Families Receiving Proper Entitlement, Based on Random Sample

We also conduct validation work which targets accounts that have been identified as high-risk. In 2005-2006, 62.2% of accounts selected for review were adjusted, exceeding our target of 50%. The results of our validation and controls program are discussed in detail on .

Provinces, territories and other government departments rely on the CRA as a key service provider

In 2005-2006, in addition to the four federal programs we delivered, we also administered 17 ongoing child benefit and credit programs for nine provinces and territories. Entitlements under all of these programs (with the exception of the Alberta Family Employment Tax Credit program) are combined with federal program entitlements into a single payment, either delivered monthly (with the CCTB) or quarterly (with the GST/HST credit).

In 2005-2006, we built on our reputation as an effective service provider by delivering two one-time payment programs for clients: the Alberta 2005 Resource Rebate, and the federal Energy Cost Benefit program. Additional details concerning these new programs can be found on . These are the sixth and seventh one-time payment programs we have delivered since 2000.

The fact that most jurisdictions have adopted the use of the CRA's delivery system strongly suggests that it offers important efficiencies in delivering a cash benefit, as it is cost-effective compared with the theoretical cost of developing independent provincial and territorial administrative systems. ² Two jurisdictions—Saskatchewan and the Northwest Territories—have specifically noted the advantages of this approach. ³ Our reputation as a service provider was further demonstrated by the expansion of our Income Verification data exchanges with our clients. Provinces, territories, and federal government departments have also increasingly come to depend upon CRA data to support the large variety of income-tested benefit and payment programs that they administer, such as social assistance, student aid, or extended health benefits. Sharing of a limited amount of data, done with taxpayer consent, simplifies administration of programs and minimizes the burden on applicants, since they do not need to contact CRA offices to get the required information themselves. Four new provincial partners were added in 2005-2006, implementing a File Transfer Protocol methodology that uses a secure, two-way online electronic data exchange. We now support 17 provincial programs with Income Verification data exchanges. See for more information about the new services implemented this past year.

In total, the CRA administered 66 different programs and services for provinces, territories, and other government departments, up from the 58 administered in 2004-2005.

Conclusion

By achieving strong performance against each of our strategic outcome measures, we believe that we have met our strategic outcome for Benefit Programs: Eligible families and individuals receive timely and correct benefit payments, contributing to the integrity of Canada's income security system . Our legislative flexibilities as an agency, our business expertise and the adaptability of our automated systems enable us to deliver income-tested benefit and credit programs, not only for the Government of Canada, but also for provinces and territories.

1 Compliance Levels Exhibited by Recipients of Canada Child Tax Benefits – Final Report, August 18, 2006 (target population as of November 2003).

2 Evaluation of the National Child Benefit Initiative – Synthesis Report, June 6, 2005, available at www.nationalchildbenefit.ca

3 NCB Progress Report 2004, published November 2005, available at www.nationalchildbenefit.ca

Unaudited

Date modified:

2006-11-23