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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

First test production of plastic a milestone for Heartland Petrochemical Complex

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CALGARY — The $4.3-billion Heartland Petrochemical Complex, which has been under construction northeast of Edmonton since 2018, has produced its first plastic pellets.

Owner and operator Inter Pipeline Ltd. said Tuesday the newly commissioned facility has been producing test pellets steadily since late June, an important milestone en route to the expected start of full commercial operation sometime this fall.

The Heartland Petrochemical Complex will convert Alberta propane into 525,000 tonnes per year of polypropylene beads, an easily transported form of plastic that is used in the manufacturing of a wide range of finished products.

Steven Noble, spokesman for Calgary-based Inter Pipeline, said the facility will be the first integrated propane dehydrogenation and polypropylene production facility in North America. He said approximately 70 per cent of Heartland’s total production capacity has been already contracted out to long-term customers.

“Through the duration of the project’s construction, we’ve seen demand for polypropylene increase significantly … including at one point hitting an all-time record (market price),” Noble said in an interview. “The demand that we initially forecast certainly hasn’t gone away.”

The Heartland facility is being built with the support of a $408-million grant from Alberta’s provincial government. The cash grant, part of an incentive program aimed at growing the province’s petrochemicals sector, is to be paid to Inter Pipeline in equal instalments over three years once the complex is operational.

Noble said by creating a new market for propane, the Heartland facility is an example of how natural resource development in Alberta is diversifying.

“The fact that we’re now looking at our raw resources in a different way, and figuring out different ways to get value out of them and create other refined products right here at home … is really the part of the story that everyone here is excited about,” he said.

The Heartland Petrochemical Complex is expected to employ 300 people once fully operational.

The polypropylene produced at the facility will be branded as Heartland Polymers.

This report by The Canadian Press was first published July 5, 2022.

Amanda Stephenson, The Canadian Press

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Alberta

Edmonton council to ask province to support new centre to fight downtown crime

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By Fakiha Baig in Edmonton

City council has voted unanimously to ask the government of Alberta to support the creation of a hub in Edmonton’s Chinatown where social workers, firefighters and peace officers could work together to reduce crime.

City administration submitted a report to council Monday that describes the proposed Healthy Streets Operations Centre.

David Jones, who is with the city and presented the report, told councillors it would not be a traditional police station.

“The people who will see the benefits of this include Chinatown residents and businesses, but also people who are on the streets who are vulnerable and being preyed on by some of the criminal element,” Jones said.

The creation of the centre is one of several actions the city has promised to address a spike in violent crime downtown, in nearby Chinatown and on the transit system.

Edmonton police officers have already increased their presence in problem areas.

In May, Justice Minister Tyler Shandro used his ministerial power to demand a report from the city on what is being done to get crime under control.

Mayor Amarjeet Sohi said during Monday’s council meeting that the city has delivered with its plan for the centre and now it is time for the province to step up.

“Edmonton gets the lowest per-capita funding to support ending homelessness compared to seven other cities (in Alberta). I think it’s really important that we ask the people whose inaction has caused harm to the community to be stepping up,” Sohi said.

“Most of the violence in Chinatown is related to houselessness … and addictions causing a lot of harm to the community and to individuals. We’re asking city taxpayers to pick up the pieces or pay for the consequences of lack of investment in health and lack of investment in housing.”

Sohi added he gets the sense the province wants to help.

The provincial government did not immediately respond to a request for comment.

The report says the centre will operate seven days a week, 21 hours a day, and could cost up to $18.1 million over the next four years.

The city and Edmonton Police Service could partially support the centre and Jones said there have also been offers from different businesses in Chinatown to provide a building for the hub at no cost.

But council voted in favour of asking the provincial government to determine how it can provide mental health, housing and shelter support.

Sohi said he plans to engage with the province and will report back to council on Aug. 15.

Jones said to get the centre up and running by next summer, the city aims to hire four peace officer sergeants, 16 community peace officers, two community safety liaisons and three firefighters or fire prevention officers.

The report said community members asked for increased security in problem areas and that building a centre in “hot spots” can effectively reduce crime. Research cited in the report has also shown it wont displace violence to other areas.

“Studies have consistently found no noticeable displacement and, in some cases, a diffusion effect, meaning that hot-spot policing reduces crime in the areas adjacent to the hot spots as well.”

Dr. Temitope Oriola, a criminology professor at the University of Alberta, said the hub model has been around for at least a decade in Canada and the centre is a good start.

“The real test is to ensure it is not too heavily tilted toward and reliant on policing,” he said in a email.

“The approach needs to have law enforcement as one of several critical components with people, community revitalization and customized social service at the epicentre.”

Oriola added the centre would be most effective in reducing crime if it also goes hand-in-hand with other initiatives in the city that address addictions issues and homelessness.

“Employment created should also focus on those most directly connected to Chinatown,” he said.

This report by The Canadian Press was first published on July 4, 2022.

This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.

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