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Canada Child Tax Benefit

July 2001

CCTB07/01

The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under the age of 18. It includes a basic benefit and the National Child Benefit Supplement.

What is the National Child Benefit initiative?

The National Child Benefit initiative is a federal, provincial, and territorial government program to help low-income families with children. It has two goals: to help prevent and reduce the depth of child poverty and to help families move from welfare to work. Through the CCTB, income support is increased for all children in low- and modest-income families. This means that as families leave social assistance for work, they continue to receive financial assistance for their children. As part of the National Child Benefit initiative, provinces and territories also provide complementary benefit programs and services for children in low-income families, such as provincial and territorial child benefits, child-care support, health benefits, and early prevention programs for children at risk.

Who can receive the Canada Child Tax Benefit?

To be eligible for the CCTB, you have to live with the child and be a resident of Canada for income tax purposes. In addition, you or your spouse has to be one of the following:

• a Canadian citizen;
• a permanent resident (landed immigrant) under the Immigration Act and Regulations;
• a Convention refugee and Humanitarian Designed Classes refugee under the Immigration Act and Regulations; or
• a visitor to Canada or a holder of a minister's permit under the Immigration Act and Regulations who has lived in Canada throughout the previous 18 months and has a valid permit in the 19^th month (other than one that states "does not confer status").

You also have to be the person who is primarily responsible for the care and upbringing of the child. If the mother lives with the child, we usually consider her to be this person. However, it can be the father, a grandparent, or a guardian.

How do we calculate the amount of your benefit?

Benefits are paid over a 12-month period from July of one year to June of the next year. To continue receiving the CCTB, you and your spouse have to file income tax returns each year, even if you have no income to report. Your returns should be filed by April 30^th to prevent any interruption to your benefits. We calculate the amount of your CCTB based on the following factors, most of which we have on record from your and your spouse's previous years' income tax returns, and from your CCTB application form:

• the number of children you have under the age of 18, and their ages;
• your province or territory of residence;
• your family net income (the total of net income from line 236 of your income tax return and net income from line 236 of your spouse's income tax return); and
• your or your spouse's deduction for child-care expenses.

The CCTB includes a basic benefit and an additional benefit called the National Child Benefit Supplement (NCBS) for lower-income families. We calculate the benefits as described below.

Basic benefit

The basic benefit is the total of the following amounts:

• $1,117 a year ($93.08 a month) for each child (the amount is different for residents of Alberta);
• $78 a year ($6.50 a month) for the third and each additional child; and
• $221 a year ($18.41 a month) for each child under the age of seven. (This amount is reduced by 25% of any amount claimed for child-care expenses on your or your spouse's income tax return).

We reduce the basic benefit if family net income was more than $32,000. For a one-child family, the reduction is 2.5% of the amount of family net income that was more than $32,000. For families with two or more children, the reduction is 5%.

Note
The Alberta provincial government has chosen to vary the amount of the basic benefit their residents receive. The basic monthly benefit is $85.41 for children under 7; $91.25 for children 7 to 11; $102.08 for children 12 to 15; and $108.08 for children 16 or 17.

National Child Benefit Supplement (NCBS)

The NCBS is calculated as follows:

• First child: $1255 a year ($104.58 a month)
• Second child: $1055 a year ($87.91 a month)
• Third and each additional child: $980 a year ($81.66 a month) per child

The supplement is reduced at the following rates when the family net income exceeds $21,744:

• 12.2% for a family with one child
• 22.5% for a family with two children
• 32.1% for a family with three or more children

If you are on social assistance, the NCBS may affect the amount of your social assistance payments. Most provinces and territories will consider the NCBS you receive as income when they calculate the amount of your social assistance. Others may adjust the basic social assistance rates by using the maximum NCBS amount.

Do clients need to apply for the benefit?

Clients have to apply to the CCRA for the benefit when they have a new child, or when they become the primary caregiver of a child. Application kits are available by calling 1-800-387-1193 for service in English, or 1-800-387-1194 for service in French.

Since July 2000, a pilot project called "Canada Child Tax Benefit Application by Telephone" offers a fast alternative to the paper application process for CCTB recipients residing in Alberta. By calling 1-888-290-7292 for service in English or 1-888-290-7833 for service in French, individuals in Alberta are now able to provide specific information to an agent to register their second or subsequent newborn child. Once the registration is confirmed, the CCRA issues a notice showing the amount of the next CCTB payment. This telephone application service is available Monday to Friday, from 8:00 a.m. to 5:00 p.m. local time.

Children's Special Allowances

The Children's Special Allowances (CSA) program provides payments to federal and provincial agencies and institutions (e.g., children's aid societies) that care for children. Children's Special Allowances replace the payments that the CCRA would otherwise have made to parents under the Canada Child Tax Benefit program.

As part of the National Child Benefit initiative, the amount of the CSA payable per child per month from July 2001 to June 2002 is $197.67.

Related provincial and territorial child benefit and credit programs

The CCRA administers the following provincial and territorial child benefit and credit programs:

• Alberta Family Employment Tax Credit (AFETC)
• BC Family Bonus and BC Earned Income Benefit
• New Brunswick Child Tax Benefit, including New Brunswick Working Income Supplement
• Newfoundland and Labrador Child Benefit
• Northwest Territories Child Benefit, including Territorial Workers' Supplement
• Nova Scotia Child Benefit
• Nunavut Child Benefit, including Territorial Workers' Supplement
• Saskatchewan Child Benefit
• Yukon Child Benefit

There is no need to apply separately to qualify under these programs. The CCRA will use the information from your CCTB application to determine your eligibility. If you are eligible, the amount of any payments will be calculated automatically based on information from the income tax returns you and your spouse file. Benefits from these programs, except for AFETC, are combined with the CCTB into a single monthly payment. AFETC payments are issued twice a year, in January and July.

What happens if you move?

Individuals who move must inform the CCRA immediately to ensure that their CCTB payments are not disrupted, even if they use direct deposit and their bank account information does not change.

More information

More information is available in the pamphlet called Your Canada Child Tax Benefit, (including related provincial and territorial child benefits and credits). The pamphlet is available at any tax services office or tax centre. Addresses and telephone numbers are listed in the government section of telephone books.

Information on the Canada Child Tax Benefit can also be found on the CCRA's Web site at: www.cra.gc.ca/benefits.

Canada Child Tax Benefit

Guideline Table effective July 2001 - June 2002

1. These amounts assume that all children are seven years of age or older. There is an additional supplement of $221 for each child under the age of seven. This additional supplement for children under the age of seven is reduced by 25% of the amount of child-care expenses claimed by the client or his or her spouse.
2. Slight variances exist for the basic benefit amount for residents of Alberta.
3. These amounts are for the federal CCTB program (basic benefit plus National Child Benefit Supplement), and do not include any amount to which a client may be eligible under any existing provincial or territorial child benefit or credit program.

These amounts are only to be used as a guideline. All clients must keep the Canada Customs and Revenue Agency informed of any changes to their family income, marital status, number of dependent children, and current address, even if benefit payments are sent by direct deposit.

Date modified:

2001-07-19