How to Use the Canada Child Benefit to Invest in Your Child’s Future
Information about the Canada Child Benefit and how parents can use it to invest in their child’s financial planning.
The Canada Child Benefit (CCB) replaced the Canada Child Tax Benefit (CCTB) and the Universal Child Care Benefit (UCCB) as of July 1, 2016, and is the most advanced government program created to help Canadian families since the introduction of the first Federal Family Allowance in 1944.
How is the Canada Child Benefit different from the Canada Child Tax Benefit?
Unlike previous family allowance programs which ranged from cash allowances, to tax credits, to expense refunds, the Canada Child Benefit is straightforward. For families with children under the age of 18, the Canada Child Benefit;
- Is paid to couple or single parent families with children until they’re 18 years old.
- You have complete freedom to use the funds for any purpose.
- The CCB is completely tax free! (you don’t pay any income taxes on the money you receive each month and no taxes are deducted from the payments you receive)
- The CCB is not a refund for children’s expenses, like child care or medication.
- You don’t need to pay an accountant to complete any complicated forms. Your annual amount is tied directly to your income tax file at CRA so they know how much to pay you every year.
The Canada Child Benefit is a program that says to parents: you know what’s best for your child’s future, so here is the money to help you help them!
How does the Canada Child Benefit work?
The Canada Child Benefit is based on your family’s net annual income reported every year on your tax returns. To receive the Canada Child Benefit every year, you must file your taxes. If you don’t file your taxes they will discontinue your benefits the following year.
The Canada Child Benefit is automatically deposited into the bank account of the parent who claims the children as dependents on their tax return. The Canada Child Benefit is typically deposited into your bank account on the 19th or 20th of each month except for December when it will be deposited on the 13th.
The table below will give you an idea of the average amount you can expect to receive monthly, annually, and in total over 18 years for each child.
|Under 6||Age 6 to 17||Annual <6||Annual >6||Total|
|$ 80,000||$ 317||$ 229||$ 3,813||$ 2,748||$ 54,789|
|$ 85,000||$ 304||$ 216||$ 3,648||$ 2,592||$ 51,936|
|$ 90,000||$ 291||$ 203||$ 3,492||$ 2,436||$ 49,128|
|$ 95,000||$ 277||$ 189||$ 3,324||$ 2,268||$ 46,104|
|$ 100,000||$ 264||$ 176||$ 3,168||$ 2,112||$ 43,296|
|$ 105,000||$ 251||$ 163||$ 3,013||$ 1,956||$ 40,493|
|$ 110,000||$ 237||$ 149||$ 2,844||$ 1,788||$ 37,464|
|$ 115,000||$ 224||$ 136||$ 2,688||$ 1,632||$ 34,656|
|$ 120,000||$ 211||$ 123||$ 2,532||$ 1,476||$ 31,848|
|$ 125,000||$ 197||$ 109||$ 2,364||$ 1,308||$ 28,824|
|$ 130,000||$ 184||$ 96||$ 2,208||$ 1,152||$ 26,016|
|$ 135,000||$ 171||$ 83||$ 2,052||$ 996||$ 23,208|
This blog is for information purposes and is part of our continuing series of articles on financial planning for children.
Child Plan™ is a tax-free investment parents and grandparents can open for their children and grandchildren in Canada. From the day you open a Child Plan™, your child or grandchild will receive a tax-free annual dividend for life, which will give them the freedom to study any program at any college or university around the world without restrictions, down payment on their first home, start their own company if that’s their dream, or to follow any ambitions in life they may have.