# Universal child care benefit (UCCB) - Actual value



## avrex (Nov 14, 2010)

Someone shared the photo below with me.
I don't have children, so I've never bothered to dig deeper into these specific taxation rules/calculations.

Can someone tell me if *this calculation* is legit or simply political propaganda.


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## stardancer (Apr 26, 2009)

I think the ad is trying to say...
You get $720/year for a child 6 to 18; from that you lose tax owing as UCCB is taxable income (based on your specific total income); you lose any Child Tax Benefit you might have received (non-taxable) again depending on your specific total income.

So yes, any increase in the UCCB means more tax $$ in the government's pocket, as it is taxable income. It will hurt the lower income earners more than the higher ones, as they will have to pay more taxes in April, and will lose some of the CTB.


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## Woz (Sep 5, 2013)

Yeah, that’s right. 

The increased UCCB was $720 per year and is a taxable benefit so if you make $50k per year in Ontario you’d pay an additional $224.28 of taxes. The Child Amount Tax Credit was removed which was a non-refundable tax credit worth 15% of $2,255 in 2014 indexed to inflation ($338.25).

It does leave out the income splitting though…


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## Just a Guy (Mar 27, 2012)

And the fact that government money came from you in the first place...or the fact that everyone can't magically get more back from the government than they pay in.


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## nobleea (Oct 11, 2013)

Isn't the UCCB now 160/mo or 1920 a year? For children under 6. Was there even a UCCB for kids above 6 before?


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## Just a Guy (Mar 27, 2012)

I believe it used to be $100


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## gibor365 (Apr 1, 2011)

We gonna benefit from it, we get $720 gross, we've nevet got CTB, so no deducation here.... yes, we gonna pay taxes on this amount, but we can imply this amount to lower-income spouse.... and after I just gonna invest it into RESP and get 20% government grant, so practically it will be untaxable


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## Woz (Sep 5, 2013)

gibor said:


> We gonna benefit from it, we get $720 gross, we've nevet got CTB, so no deducation here....


The Canada Child Tax Benefit (CCTB) hasn't been changed. The Child Amount Tax Credit which everyone with children was eligible for is what was removed so you have lost out on that amount ($338.25).

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns360-390/367-eng.html
http://www.taxtips.ca/filing/childamounttaxcredit.htm


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## VideoTaxJoe (Jun 24, 2015)

The common misconception is that the Child Tax *Benefit* has been eliminated, however, it is actually the Child Tax Credit. They are completely different things.

Elimination of the *Benefit* would have been really devastating to some families since it could be worth up to just under $4,000 in a one kid family(if you include the national child supplement). But again, this is still there. 

Elimination of the *Credit* is calculated just like Woz indicated. Loss of it is really only a loss of $338.

The enhancement to UCCB puts an extra $720 in people's pockets but then taxes it down. There is only one group of people in Canada that is worse off for this change...and that is parents in New Brunswick where both spouses earn more than $250,000. This is because tax in that bracket will turn the $720 into about $330. So they would get $330 but lose a $338 credit.

Everyone else will be in a net positive situation with the change, other than the taxpayers that indirectly have to pay for this extra spending. 

The most common scenario is Woz's example where the lower income earning spouse has $50k in income. That person would have a net benefit of $158 ($720 - $224 (in tax) - $338 (loss of credit)).

It isn't that some win and some lose, it's that some (lower income earners) win more than others (higher income earners).


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## gibor365 (Apr 1, 2011)

> The common misconception is that the Child Tax Benefit has been eliminated, however, it is actually the Child Tax Credit. They are completely different things.


 OIC  , even though I'd prefer that Child Tax Benefit will be eliminated, but Child Tax Credit will stay  ... in any case better to get something than nothing...
btw, I liked CTB much more in Israel, where benefit paid regardless of parents' salary


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## Woz (Sep 5, 2013)

The majority of families with children are getting more money (albeit not a lot more for many) and they essentially replaced a flat benefit with a progressive benefit which was something the income splitting was being criticized for. I think it's tough to criticize the change too much unless you're against tax breaks for families in general (which I could understand).


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## BoringInvestor (Sep 12, 2013)

Woz said:


> The majority of families with children are getting more money (albeit not a lot more for many) and they essentially replaced a flat benefit with a progressive benefit which was something the income splitting was being criticized for. I think it's tough to criticize the change too much unless you're against tax breaks for families in general (which I could understand).


The other 'valid' criticism is the funds could be better spent, on a societal level, by offering a national daycare program.


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## gibor365 (Apr 1, 2011)

BoringInvestor said:


> The other 'valid' criticism is the funds could be better spent, on a societal level, by offering a national daycare program.


I'm against it... you get money and you may spend it on daycare or take care of your children in other way.
Would agree that better to spend it on free universities like in Europe.


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## Robillard (Apr 11, 2009)

I don't understand the case for creating a national daycare program. Is it that the provinces and/or the private sector are failing to create adequate daycare spaces, or is it that daycare is generally too expensive? Can someone please explain this? In either case, putting extra money in the hands of parents, ought to make a small dent in the overall budgetary cost of placing children in daycare, and there should be an overall incentive to daycare providers to increase capacity in response to increased demand. Arguably, since subsidised daycare allows all parents to benefit from the same low-cost daycare, and this benefit is not means-tested/limited, the overall effect is more beneficial for middle and upper income families than poor families when compared to alternative policies, like the UCCB, which is effectively means-limited through progressive taxation. 

One case I can think of is that a national daycare program might have a positive effect on the birth rate. I think some European countries (France in particular) have seen national daycare programs have a positive influence on this. Then again, France's personal tax system also provides a lot of incentive for getting married and having children since staying single is costly. Daycare might not be the whole story.


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## Woz (Sep 5, 2013)

I think the motivation behind national daycare is mostly driven by the high cost to parents. The cost to the government for Quebec’s program is $60 per day which is about on par with daycare in most places so there doesn’t seem to be any savings through efficiencies.

The $15/day probably does a better job of convincing people to have kids then simply giving parents the money. When deciding to have kids, few people consider how much they’ll receive in tax credits but they do (sometimes) consider daycare costs. With a national program, daycare costs ~$300 per month per kid or $7k per year if you have two kids versus $29k per year with no program. That $29k per year is a pretty big number which I’m sure convinces many people not to have kids.

I struggle with supporting national daycare, partially because it wouldn’t benefit me and it’s quite a large subsidy. However, I do think the daycare related costs of raising children is an issue that needs to be addressed and if I try to be impartial I think a national daycare program would probably be a net positive for the country. However, I’d be more partial to instead increasing the amount you can deduct for child care expenses to $18k per year per kid to reflect the actual cost of daycare.


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## blin10 (Jun 27, 2011)

gibor said:


> We gonna benefit from it, we get $720 gross, we've nevet got CTB, so no deducation here.... yes, we gonna pay taxes on this amount, but we can imply this amount to lower-income spouse.... and after I just gonna invest it into RESP and get 20% government grant, so practically it will be untaxable


hey gibor, how does implying amount to the lower-income spouse work? few questions:
1. wife by default receives benefits, I was reading husband can receive it instead, if so how to do that? that brings it to question #2
2. if husband earns more then his wife, receives benefits, invests in his RESP account, at the end of the year how do you claim it on wifes taxes (since it's in husbands account)?


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## Echo (Apr 1, 2011)

blin10 said:


> hey gibor, how does implying amount to the lower-income spouse work? few questions:
> 1. wife by default receives benefits, I was reading husband can receive it instead, if so how to do that? that brings it to question #2
> 2. if husband earns more then his wife, receives benefits, invests in his RESP account, at the end of the year how do you claim it on wifes taxes (since it's in husbands account)?


UCCB is taxable in the hands of the lower-income spouse.


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## CPA Candidate (Dec 15, 2013)

What they've done is really make the system a lot more progressive, increase the taxable portion and take away the credit that is applied regardless of tax bracket. The lefties would love it if the NDP came up with the idea, but it was Harper, so it is awful.


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## uptoolate (Oct 9, 2011)

This just seems like another angle to ensure full employment and great pensions for a certain segment of the population. Let's see if I have it right, I will go out and try to earn a living while paying all kinds of fees and taxes which you will employ people to administer and collect, you will then take a not insignificant portion of the money I am left with and employ a large number of people to administer and collect this money, you will then have some other group of your employees give me a portion of this money back and you will then take some of that money back again. Then if I am left with any money left over to spend, I get to give you 13% of that if I decide to spend any of it. Of course you will have someone sending my children a check for 103.50 every 3 months to rebate some of this money.... I just fail to see how this is all going to have a happy ending.


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## gibor365 (Apr 1, 2011)

blin10 said:


> hey gibor, how does implying amount to the lower-income spouse work? few questions:
> 1. wife by default receives benefits, I was reading husband can receive it instead, if so how to do that? that brings it to question #2
> 2. if husband earns more then his wife, receives benefits, invests in his RESP account, at the end of the year how do you claim it on wifes taxes (since it's in husbands account)?


Doesn't matter who gets UCCB, lower-income spouse pays tax on it ....If you use turbotax soft, it will be done automatically by program. If you invest it into RESP, you get 20% goverment grant


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## blin10 (Jun 27, 2011)

does husband need to feel up any forms ? or just deposit wife's check into his account ?



gibor said:


> Doesn't matter who gets UCCB, lower-income spouse pays tax on it ....If you use turbotax soft, it will be done automatically by program. If you invest it into RESP, you get 20% goverment grant


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## Guban (Jul 5, 2011)

blin10 said:


> does husband need to feel up any forms ? or just deposit wife's check into his account ?


If the cheque is in her name, she needs to deposit it. 

If he is the lower income spouse, he needs to claim it as taxable income in his return.


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## gibor365 (Apr 1, 2011)

Guban said:


> If the cheque is in her name, she needs to deposit it.
> 
> If he is the lower income spouse, he needs to claim it as taxable income in his return.


if account is joint, anyone can deposit ... no need to fill out any forms


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## blin10 (Jun 27, 2011)

gibor said:


> if account is joint, anyone can deposit ... no need to fill out any forms


and what id it's not joint account?


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