In 2017 when our son was born, we got a small cheque from the Canada Child Benefit a few weeks later (I think it was a few weeks later- to be honest I can’t remember and I blame it on my mom-brain during my maternity leave in Canada). We got a small lump sum payment because our income was higher for the 2016 tax year. It was a bit disappointing and I wanted to learn how to maximize the Canada Child Benefit.
I wasn’t expecting very much for 2018. However, in 2018, we got our first Canada Child Benefit (CCB) monthly cheque and it felt great! We had lower income for 2017 tax year because of my maternity and parental leave and therefore we were able to receive more Canada Child Benefit payments.
The amount paid still isn’t that great, but anything is better than nothing, and I am grateful to receive money to help contribute to baby GYM’s RESP or offset the cost of baby expenses.
For 2019, we got an even higher amount for the CCB because my income was low in 2018 from parental leave.
In this post on the Canada Child Benefit, I’ll explain:
- What the Canada Child Benefit Is
- How to apply for the CCB
- How much you can expect to receive from the CCB
- How to use the CCB Calculator to determine your CCB clawback
- How to maximize your Canada Child Benefit
Setting up the Canada Child Benefit was one of the financial checklist items for us as new parents.
Table of Contents
What is the Canada Child Benefit?
The Canada Child Benefit is a non-taxable (that means it is not included as income) benefit paid to families with children under the age of 6 and a different amount for children aged 6 to 17. The CCB is paid on a monthly basis via a cheque (or I guess direct deposit if you have arranged that. I like the good ol’ fashioned cheques).
If the amount you receive is less than $20 a month, the government of Canada will just pay your Canada Child Benefit Amount in a lump sum.
What are the Canada Child Benefit payment dates? If you are not paid via lump sum, the CCB is usually paid on the 20th of the month via cheque or direct deposit. The CCB amount your receive is dependent on your net family income for the previous year.
Here are the exact dates for the Child Tax Benefits for this year.
The CCB has replaced the previous UCCB (Universal Child Care Benefit) and the CCTB (Canada Child Tax Benefit) as of 2016. The government of Canada likes to confuse us with new acronyms every few years, it seems.
The ‘calendar year’ for the CCB rolls from July until June of the following year.
How to Apply for the CCB
Applying for the CCB is a must, as part of the financial checklist for new parents.
To apply for the CCB, all you have to do is to go to CRA’s (Canada Revenue Agency) My Account and click on apply for CCB or you can complete this form.
The primary caretaker of the child is eligible to apply.
By default, the Canadian government usually considers this to be the woman. I applied for this automatically with the ‘newborn package’ of things to sign up for after our baby was born (it was an automatic sign up as I provided the government with my SIN).
You have to have completed the previous year’s taxes to be eligible to receive the CCB.
Canada Child Benefit Amount 2023
So how much can you receive with the CCB? It is a great government benefit if you can qualify for it.
Here’s a chart of the Canada Child Benefit amount.
Here’s the maximum that Canadian families can receive from the CCB from July 2023 until June 2024 based on the 2022 tax returns :
- $7,437 per year or $619.75/month for eachchild under the age of 6
- $6,275 per year or $522.92/ month for eachchild aged 6 to 17
- You can receive an additional $3,173 per year if your child qualifies for the Child Disability Benefit.
In addition, there are additional benefits that are also paid out depending on your eligibility and the province or territory that you live in.
The maximum amount of the Canada Child Benefit is adjusted to inflation on an annual basis.
This maximum amount gets clawed back depending on your family’s net income, or the “adjusted family net income (AFNI)”. The higher the net income, the more is clawed back. The amount is adjusted for inflation each year.
Calculating how much you can receive with the Canada Child Benefit is complicated and depends on a number of factors, including how many children you have (under 6 and over 6) and how much your family net income is.
The CCB Calculator
The Government of Canada has a handy CCB Calculator, as known as the Child and Family Benefits Calculator.
The amount you get for the current year is based on your previous tax year’s net income.
Have this information handy when you input your details into the CCB Calculator:
- The province or territory that you live in
- The number of children you have (haha, you should have this information handy, I hope)
- Your children’s birth dates
- Whether you are divorced, married etc. and if you share custody of your child(ren)
- Whether your child is a qualified disabled dependent
- Your net income
- Your spouse’s net income
This goes through a number of questions including your net income, your spouse’s income, and the number of children you have and when they were born, etc. It provides a good estimation of your potential monthly CCB payments to you.
When your AFNI (Adjusted Family Net Income) is higher than $31,120, the government starts to reduce your payment, to the tune of $0 payment if you have a AFNI over $200,000(for example in British Columbia).
As mentioned, CCB payments are recalculated each July, based on the previous tax year. For example, for July 2021 to June 2022, the Canada Child Benefit Amount will be based on your 2020 income taxes.
In BC for the 2022 tax year, if you and your spouse have a AFNI (combined net income) of more than something like $220,000, you will be completely cut off from any Canada Child Benefit amount if you have two children under six.
This means you will get zero dollars of CCB.
If you make $218,000 between the two of you, you can get $151.00 over the whole year (which will be sent in one cheque). This is compared to $196 a month that many Canadians can receive.
Canada Child Benefit Reductions for 2021-2022
| Number of Eligible Children | AFNI between $32,028 and $67,426 | AFNI > $69,395 |
| 1 | 7% | Add an additional 3.2% |
| 2 | 13.5% | Add an additional 5.7% |
| 3 | 19% | Add an additional 8% |
| 4 | 23% | Add an additional 9.5% |
As you can see, the reduction of CCB calculation is complicated and depends on the number of children you have, your children’s ages, and your adjusted family net income. There is a way to maximize your Canada Child Benefit of course.
The Key to Maximizing your Canada Child Benefit
The key to maximizing your Canada Child Benefit is to lower your family’s net income.Or basically lowering the number found on line 236 in your previous year’s tax return.
To reiterate, to maximize your Canada Child Benefit you need to reduce your adjusted family net income, or AFNI).
Here are ways deductions you can use in order to maximize your Canada Child Benefit:
- RRSP deductions
- Union/ Professional dues
- Childcare expenses
- Business loss allowable deductions
- Moving expenses
- Carrying charges and interest (schedule 4)
Some of these deductions cannot be controlled (for example, childcare expenses are fixed), but RRSP deductions can be adjusted! If you haven’t maxed out your RRSP for many years and you do a big max out and your family’s net income decreases substantially, you will get a big CCB payment for the following year.
Even if you use the Canada Child Benefit calculator and you’re not eligible to receive much (e.g. if you have high income for that year), you should apply for the CCB anyway because the government automatically calculates how much you are eligible to receive every year.
Your Adjusted Family Net Income (AFNI) may fluctuate or change every year (for example, if you had a year of EI payments from parental leave then your net income will likely be much lower).
Related: How to Manage your Money in Canada
Therefore, with regards to the RRSP vs TFSA debate that always get hashed around in the personal finance world… in this case, contributing to an RRSP trumps the TFSA can help you receive more non-taxable income from the Canadian government. For Canadian families with children, this can be an important reason to encourage you to maximize your RRSP.
Canada Child Benefit Summary
Hopefully this post helped enlighten you on what the Canada Child Benefit is, how to apply for this great CCB government benefit and how much you can expect to receive as a Canada Child Benefit payment. This post also shared how to use the CCB calculator on the Canada.ca website to determine your CCB clawback. Finally, this post shared tips on how to maximize your Canada Child Benefit, namely reducing the amount in line 236 of your tax return.
Obviously, working during your maternity leave will affect the amount you get for your CCB the following year.
The Canada Child Benefit is a great benefit for Canadians, and it makes sense to try and lower your net income as much as you can in order to be eligible for a well padded CCB payment. Now you’ll have more money to funnel into your children’s savings accounts or your children’s RESP.
Who doesn’t love free money? Well, technically not free since we pay for it with our taxes!
If you live in British Columbia, don’t forget to cash in on the $1200 BCTESG (you con’t have to contribute towards the RESP to get this money).
You could use that CCB money to contribute to a a Target Date Justwealth RESP and then get 20% back from the government via the CESG. How’s that for churning?
Readers, are you a fan of the Canada Child Benefit?
Any tips or tricks to maximize the CCB amounts?
genymoney
GYM is a 40 something millennial writing about personal finance since 2009 and interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for a free dividend yield spreadsheet and the free Young Money Bootcamp PDF.
