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The Child Benefit You Got was Not an Error

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The Child Benefit You Got was Not an Error

So a lot of people are wondering why money showed up for the Canada Child Benefit (CCB) yesterday (May 20) when they normally don’t qualify.

The CCB “one-time payment” for COVID-19 relief is actually formula driven but it is created by adding $3,600 for each additional child (not $300)… you’ll see in a minute why this is.

Step 1 – Add up the number of children that were under 6 years old in 2018 and multiply by $6,639.00

Step 2 – Add up the number of children that were between 6 and 17 years of age in 2018 and multiply by $5,602.00

This is your normal ANNUAL Canada Child Benefit entitlement before reductions.

However, for your May 2020 payment only, the formula adds $3,600 per child to bring the numbers to $10,239 and $9,202 per child based on age respectively.

If you have less than $31,120 of adjusted household income, you will get the full $300 extra, congrats, no more math for you.

For the rest of you it gets interesting or complicated, depending how you view math.

Any amount of adjusted household income between $31,120 and $67,426 causes your ANNUAL entitled CCB to be reduced by the following:

  • 7% of the amount of household income if you have 1 child
  • 13.5% of the amount of household income if you have 2 children
  • 19% of the amount of household income if you have 3 children
  • 23% of the amount of household income if you have 4 children or more

This is called the “first reduction”.  The maximum amount of household income subject to the first reduction formula is $36,306 more than the base $31,120 (meaning an income of $65,976)

Those of you over this number, you are not done yet.

Any amount of adjusted household income over $67,426 causes your ANNUAL entitled CCB to be reduced by the following:

  • 3.2% of the amount of household income if you have 1 child
  • 5.7% of the amount of household income if you have 2 children
  • 8% of the amount of household income if you have 3 children
  • 9.5% of the amount of household income if you have 4 children or more

This is called the “second reduction”.  There is no maximum amount of household income subject to the second reduction formula.  You keep calculating until you hit zero.

For example.   If you have one school-aged child in 2018, and your adjusted household income is $100,000 the formula would be this:

NORMAL MONTHLY BENEFIT:

  • First reduction: 67,426-31,120 = $36,306 x 7% = $2,541.42
  • Second reduction: 100,000-67,426 = $32,574 x 3.2% = $1,042.37
  • 1 child: $5,602
  • $5,602.00 minus $2,541.42 = $3,060.58 minus $1,042.37 = $2,018.21
  • $2,978.21 divided by 12 = $168.18/month CCB as a Normal Benefit

COVID19 MAY 2020 BENEFIT:

  • The first two reduction steps are the same but that 1 child is $3,600 more
  • 1 child: $9,202
  • $9,202.00 minus $2,541.42 = $6,660.58 minus $1,042.37 = $5,618.21
  • $5,618.21 divided by 12 = $468.18/month CCB as a one-time Benefit  (an extra $300 like promised)

So yes… an extra $300 per child for those already getting the benefit already… but for those that were not getting it before, but filed in 2018… and had an eligible child… the formula is recalculated with the $3,600 ($300 per month) change, and so many more households in Canada will be seeing some sort of amount.

For example, the lowest amount possible to collect would be with one school-aged child ($9,202 formula).

  • Households that make up to $163,069 will receive the full $300 for this child.
  • Households between $163,069 and $275,569 will receive less than $300 on a sliding scale from the Second reduction.
  • Households over $275,569 in this scenario would receive zero.

So almost every household with eligible children in Canada will see something coming their way for the May benefit to help with the extra costs with no schools or dayhomes open.

Sincerely,
Your Friendly Neighbourhood Tax Nerds

CGL Strategic Business & Tax Advisors

 

 

 

 

 

CV of Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr can be found here.

 

CEO | Director, Canadian Tax Advisory CGL Strategic Business & Tax Advisors With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://www.CGLtax.ca/Litzenberger-Cory.html

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Alberta

What’s on Tap? – Rediscover Moonshine with Skunkworks Distillery

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An exciting new addition to the Calgary Barley Belt might look a little bit different than what regular patrons are used to seeing, or drinking. Skunkworks Distillery, a locally owned and operated micro-distillery, is bringing premium engineered moonshine to the craft beer party!  

Originating in 2015 as an after-work-over-drinks project idea, the concept of Skunkworks Distillery was in the works for a few years before it began to take shape with Faye Warrington and Marty Lastiwka at the helm. Skunk Works is an engineering term coined at Lockheed Martin, referring to the Advanced Development Department, which focuses on innovative and unconventional approaches to new science and technology. “Skunk Works is a department that operates outside the mainstream of their company working on weird little side science projects or on new tech stuff,” says Faye, “for Marty and I, this is our Skunk Works. This is our science project.” 

Located on the Barley Belt, southeast Calgary’s signature walking distance collection of craft breweries, Skunkworks distills smooth, small batch premium engineered moonshine that is as good over ice as it is in one of their many cocktails. Made from sugar beets refined in Taber, Alberta, Skunkworks offers three unique products: the original Skunkworks Moonshine, Hypersonic and Moonwater. With Skunkworks, Faye and Marty are committed to challenging the mason jar mentality that associates moonshine with a bootleg burn. 

“Moonshine is a good way to bring people together. We all have a moonshine story,” Marty laughs, “It’s something people can always talk about, for better or for worse.” 

The tasting room, much of which Faye and Marty built themselves, combines industrial space race vibes with a Mad Max steampunk flare that can’t be found anywhere else. Sip your Skunktail (Skunkworks cocktail) from a science lab beaker and enjoy some light snacks on a replica plane wing turned coffee table, while listening to live music from the in-house studio. 

After countless hours of planning, searching and building, the taproom officially opened in November of 2019. Launching amidst the upheaval of a global pandemic and ensuing economic crash has made Skunkworks an operation well versed in thinking on their feet. “None of the normal rules for growing a business apply right now,” says Marty, “So we’re just adapting, we’re pivoting every day.” 

Like a number of other breweries and distilleries around the city, Skunkworks transitioned to the production of hand sanitizer to help fill the gap during the height of the pandemic. The public response, according to Marty, was far more than they ever could have anticipated. “Everyone was just so desperate for it,” he says, “we were making it just to give away, and suddenly people were lined up around the block for it.” 

While this wasn’t how they exactly envisioned their first few months in operation, it turned out to be a great way for the distillery to begin connecting with the community while helping out people in need. Given the uncertain circumstances and difficulties of the last several months, Faye says the support of the community and other local distilleries has been invaluable. 

As things settle down, Faye and Marty are looking forward to being able to host live music again and are even exploring the idea of an outdoor concert on their (dog-friendly!) patio. Above all, the two are excited for the upcoming release of their latest product, a seasonal feature that is like “nothing you’ve ever tasted!” coming very soon. 

To learn more about Skunkworks Distillery and what the Calgary Barley Belt has to offer, visit https://www.skunkworksdistillery.com

 

Follow Todayville Calgary to learn more about Calgary’s unique breweries and distilleries, now featuring exclusive weekly updates from Whats on Tap? 

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Alberta

Alberta has an opportunity like never before

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As the world’s energy debate continues to grow, with climate change and the economy both sources of large concern to many, there is often a divide both politically and regionally and Canada is no different.

Places like Alberta, with an economy that has been largely centered around the oil and gas sector for decades, is a Canadian province quite often at odds with the Canadian government for its desire to put in place renewable energy policies like carbon taxes and hold off on pipelines.

There are abundant sources of renewable energy in Alberta that could provide jobs and a pathway out of its current situation. Despite being intermittent, Alberta’s wind and solar potential is very apparent. However, to scale it to the level necessary to stop burning massive amounts of coal and natural gas, we will need large battery backups to store power in order to combat the intermittency issues of wind and solar. 

These investments can be made, and I would argue the more the province opens up space on the grid, the more foreign investment we will see. 

But this is also a tough pill to swallow when you have companies built from the ground up for decades, employing hundreds of thousands of people who have been educated and trained in what they do. Alberta as a province enjoyed strong growth for decades, providing hundreds of billions of dollars to the Federal Government to help balance the books and provide health care for millions of Canadians. 

Geothermal is famously used in Iceland and in California at the world’s largest facility, the Geysers Geothermal Complex, which has a 1517 MW capacity. Geothermal energy has limitations for growth due to requiring locations to tap into volcanic aquifers, which it had not been able to overcome until now. Eavor Technologies Inc. uses a completely different method for their production.  They use a closed loop system and do not rely on traditional wells or pumps. They are able to drill two vertical wells, connect them together underground and essentially create a conductive radiator with many parallel lines to cover a large amount of ground without the volcanic aquifers. Their unique IP uses an environmentally safe fluid that circulates using the thermosyphon effect.  As the hot fluid rises through the outlet well, the change in pressure forces the cool fluid to drop through the inlet well, creating continuous circulation without the need for a parasitic pump. The Eavor-Loop completely isolates the fluid from the surrounding environment and produces zero GHG emissions, making the entire process carbon neutral. For extra appeal, this can all be done by the same Alberta drilling rig operators that do not get to work as much as they once did, putting oil and gas companies back to work.

This means Alberta, famous for its oil industry, has the potential to become famous for an entirely renewable grid with a mix of Eavor-Loops, solar, wind and battery storage. It also gives us the ability to grow an Alberta made technology in Eavor loop for export. This unique opportunity for economic diversification and expansion aligns simultaneously with both environmental and economic concerns, presenting a balanced approach to the climate question without compromising on existing Alberta jobs and infrastructure

Brian Scott
Clean Energy Advocate

 

For more stories, visit Todayville Calgary.

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