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New benefit targets child poverty, minister says

THE CANADIAN PRESS | posted Wednesday, Jul 20th, 2016

OTTAWA – The federal minister overseeing the government’s new child benefit program says the monthly payments starting this week will cut Canada’s child poverty rate to its lowest level in generations.

Families Minister Jean-Yves Duclos says the child poverty rate in Canada is expected to drop to 6.7 per cent from 11.2 per cent by this time next year once the families feel the full effect of the new child benefit.

Federal officials estimate almost 300,000 children and 200,000 adults will see their family income rise over the next 12 months to above the low-income cut off that measures poverty levels across the country.

Nowhere is that going to be felt more than in Manitoba where federal officials calculate more than half the children currently living in poverty will be lifted above that cutoff.

The new non-taxable, income-tested child benefit rolls out Wednesday with the average family receiving about $2,300 under a program that was a cornerstone of the Liberals’ campaign platform.

The single benefit replaces what Duclos calls a more complicated system for families that required parents to apply for the Canada child tax benefit and the national child benefit supplement, and tax claw backs on the monthly universal child care benefit payments.

Related stories:

New child benefit could pose pitfalls for divorced couples: Critic

Trudeau announces EI benefits extended to three western regions

Budget revamps tax benefits for families, focuses on low and middle income

Three things to know about the new program

1) If you already receive the universal child care benefit, or the child tax benefit, you don’t need to apply for the new one. Your information is already on file and all you have to do is file your 2015 tax return. Payments will be made by direct deposit if you’re signed up for it, or by cheque if that is how you received the universal child care benefit around the 20th of each month.

2) The new child benefit won’t count as income, meaning it won’t count against your tax return next year and be taxed like the previous universal child care benefit. Provinces have also said they won’t count the new money when calculating income-tested benefits like rent and child care supplements.

3) How much you receive is based on two things: the number of children under age 18 in your household and your net family income. Families with a net income of less than $30,000 receive the full benefit of $533 per month for a child under six and $450 per month for children six to 17. Benefit levels drop as income rises. Most families, on average, will receive about $191 per month. An extra $227 per month is added for a child who qualifies for a disability payment.


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