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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

Alberta's referendum should not focus on daylight time, psychologists say

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EDMONTON — Ditching the practice of switching the time twice a year may seem like a no-brainer to some, but Alberta psychologists warn that the result of a provincial referendum could have unexpected consequences.

The referendum on daylight time is on the ballot alongside Alberta’s municipal elections on Monday. There is also a referendum on the federal equalization program. Additionally, in Calgary, there is a plebiscite about adding fluoride to the city’s drinking water.

In recent years, there has been a push to stop forcing people to change their clocks, particularly in the spring when people can lose an hour of sleep.

Studies all over the world have linked the time change to increases in car crashes, depression, lower productivity, as well as to higher risks for heart attacks and strokes.

Michael Antle, a psychology professor at the University of Calgary who studies circadian rhythms, said ending time changes is a good thing. But Alberta should stick to standard time, not daylight.

“We do have some acute mismatch between our circadian clock and our work cycle in the spring when (we set our clocks forward),” he said.

“The better choice for Alberta in particular, but we are advocating for this everywhere, is the more natural standard time, where what your circadian clock is telling you to do and what your boss is telling you to do are less mismatched.”

The Alberta referendum does not give people that option. The question posed to voters is: “Do you want Alberta to adopt year-round Daylight Saving Time, which is summer hours, eliminating the need to change our clocks twice a year?”

Antle said the question isn’t well phrased and shouldn’t put an emphasis on summer. 

“Everybody loves summer. If you vote against summer, you are just mean,” he said. “I think that will influence a lot of people’s choice.”

He noted that switching to daylight time permanently will not make a difference in Alberta in the summer, but it would mean dawn at about 10 a.m. in most of the province in the winter.

The best time zone puts 12 p.m. as close as possible to solar noon, which is when the sun is at its highest point the sky, he said.

But Alberta is farther west than other places in the Mountain Time zone. That means in Calgary, for example, solar noon during standard time can happen as late at 12:50 p.m. During daylight time, he added, it happens around 1:45 p.m.

“In fact, we already have daylight time when we are on standard time and we are on double daylight time when we are on daylight time,” Antle said. 

In 2019, Service Alberta posted an online survey about daylight time and 91 per cent of the 140,000 responses voted in favour of sticking to daylight time year-round, the ministry responsible for the agency said in an email.

“Many governments across Canada and United States are bringing forward or contemplating legislation to lock their clocks to a single time year-round,” said Taylor Hides, spokeswoman for Service Alberta Minister Nate Glubish. 

“While we are not bound by the decisions made by other jurisdictions, we are affected by them, so it makes sense to ask Albertans this question.”

British Columbia and Ontario have said they would wait until neighbouring jurisdictions agree to make the change at the same time. In the U.S., states cannot make the change without the approval of Congress, which has yet to happen.

Yukon made the change to permanent daylight time last year and Saskatchewan, with the exception of the boundary city of Lloydminster, stopped changing clocks decades ago.

Alberta’s time referendum is binding, but Premier Jason Kenney has said the province could hold off until other jurisdictions make the same change.

Kyle Mathewson, an associate psychology professor at the University of Alberta, said having fewer hours of sunlight in the morning could have long-term health consequences, such as increases in certain cancers, obesity and diabetes.

“The issue with this from a neuroscientific perspective is that our rhythms of waking up and going to sleep are governed by the amount of lights in our environment,” he said. “These early morning light hours are very important in setting that rhythm for us.”

Mathewson suspects daylight time might also be favoured from an economic perspective.

“Thinking about this extra hour after school when there is lightness, you could think of that as stimulating the amount people go out and spend money at the local shops and those are all good things,” he said.

“But that stimulus of the economy shouldn’t come at the expense of our health.”

This report by The Canadian Press was first published Oct. 16, 2021.

Daniela Germano, The Canadian Press

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Alberta

Blue Bombers become first CFL team to earn playoff spot with 26-16 victory over Elks

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EDMONTON — Zach Collaros threw two touchdown passes as the Winnipeg Blue Bombers defeated the Edmonton Elks 26-16 on Friday night to become the first CFL team to clinch a playoff berth.

Winnipeg (9-1) captured its seventh straight victory and improved to 7-0 within the West Division. Collaros finished 15-of-24 passing for 210 yards with an interception to remain the CFL’s passing leader (2,565 yards) but is also tops in TD passes with 15.

This marks the fifth straight season that Winnipeg, the defending Grey Cup champion, has made the playoffs.

Edmonton (2-7) suffered its fifth straight loss and dropped to 0-5 at home this season.

Edmonton’s defence forced a safety at 9:31 of the first quarter, then came up big five minutes later as Trumaine Washington intercepted Collaros in the end zone. The Bombers closed out the opening quarter with a 37-yard Ali Mourtada field goal.

The Elks responded with Sean Whyte’s 34-yard field goal at 11:22 of the second.

Winnipeg took the lead with three minutes left in the first half as a 47-yard completion to Kenny Lawler set up Collaros’s five-yard TD strike to Andrew Harris. But Harris appeared to suffer an injury to his right knee and did not return as Brady Oliveira finished up with 105 yards rushing on 16 carries.

Whyte kicked a 25-yard field cut Winnipeg’s half-time lead to 10-8.

Mourtada converted from 27 and a career-high 43 yards to start the third. Edmonton tied it 16-16 on Taylor Cornelius’s 11-yard TD toss to Shai Ross. Backup quarterback Dakota Prukop added the two-point convert.

Rookie Cornelius got the start as incumbent Trevor Harris was a healthy scratch.

Moments after Elks defender Aaron Grymes couldn’t hang on to an easy interception opportunity, Collaros hit Rasheed Bailey on a 48-yard completion before finding him on a five-yard scoring strike six minutes into the fourth.

Mourtada cemented the win with a 23-yard field goal with 50 seconds remaining.

Winnipeg hosts the B.C. Lions next Saturday while Edmonton has a bye week before returning home against the Hamilton Tiger-Cats on Oct. 29.

NOTES: Harris being sidelined while healthy has led to speculation the Elks are actively shopping their veteran quarterback on the trade front… Lawler returned to the lineup after being suspended by Winnipeg for its last game for an impaired driving arrest… The actual attendance appeared to be far beneath the announced 24,276 fans.

This report by The Canadian Press was first published Oct. 15, 2021.

This report by The Canadian Press was first published Oct. 15, 2021.

The Canadian Press

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