Author: Simon WU, Head of Newstars’ Beijing office, a licensed Australian migration agent writing under the pen name “The Ordinary Path”. With more than 10 years of experience living and working in Australia, he specialises in offshore skilled migration and business/investment migration. Having been a skilled migrant himself, he aims to guide many overseas migrants along their own “extraordinary path”.
Canada is well known as a high-welfare country. Public healthcare, social assistance, unemployment benefits, pensions, pregnancy benefits, parental benefits, the Child Benefit (the “Milk Money”) and other entitlements accompany every stage of life, from cradle to grave. Today we take a closer look at Canada’s Child Benefit.
What Is the Child Benefit?
The Canada Child Benefit (CCB) is the Canadian government’s child benefit payment, commonly known as the “Milk Money”. This tax-free benefit is paid monthly by the government to families with children under 18 years of age. The benefit is split into two age bands: 0-6 years and 6-17 years, and the amount varies according to family income — the lower the family income, the higher the benefit, and the higher the family income, the lower the benefit. Because the amount depends on family income, applicants must lodge a tax return every year, even in years with no income, or they will not be able to claim the benefit. The benefit runs on a 12-month cycle, from July of the current year to June of the following year, and is recalculated every July based on the previous year’s tax return.
How Has the Child Benefit Evolved?
July 2016
The Canada Child Benefit (CCB) replaced the Canada Child Tax Benefit (CCTB, Canada Child Tax Benefit) and the Universal Child Care Benefit (UCCB, Universal Child Care Benefit).
Families with an annual income below CA$30,000 receive the full benefit.
Children aged 0-6: up to CA$6,400 per child per year.
Children aged 6-17: up to CA$5,400 per child per year.
July 2018
Indexing the Child Benefit to inflation, originally planned for 2020, was brought forward by two years. As prices rise each year, the benefit will increase accordingly to keep pace with growing child-raising costs.
Families with an annual income below CA$30,450 receive the full benefit.
Children aged 0-6: up to CA$6,496 per child per year.
Children aged 6-17: up to CA$5,481 per child per year.
July 2019
The benefit rose again.
Families with an annual income below CA$30,450 receive the full benefit.
Children aged 0-6: up to CA$6,639 per child per year (approximately RMB 34,678).
Children aged 6-17: up to CA$5,602 per child per year (approximately RMB 29,261).
How Is the Child Benefit Calculated?
To apply for the benefit, applicants must meet all 5 of the following conditions
- The child must be under 18 years of age;
- The child must live with the applicant;
- The applicant must be primarily responsible for the child’s care, upbringing and education;
- The applicant must be a Canadian tax resident;
- The applicant or their spouse must be
(a) a Canadian citizen
(b) a Canadian permanent resident
(c) someone who has lived in Canada continuously for 18 months and still holds lawful residence status in the 19th month
(d) a refugee.
The benefit amount is calculated based on the following 5 factors
- Number of children living with the applicant
- Age of the children
- Province in which the applicant resides
- Applicant’s family net income
- Applicant’s marital status
The Canadian government’s official website has a calculator for the Child Benefit. The link is: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-family-benefits-calculator.html. Simply enter the relevant information to find out the benefit amount.
So is the monthly benefit actually enough? Based on prices from Canada’s Walmart website, a 964g tin of Abbott formula sells for CA$43.98, and a pack of 240 Pampers or Huggies nappies sells for CA$37.28. For children aged 0-6, the CA$553 monthly benefit per child is more than enough to cover a child’s everyday expenses.
Closing Thoughts
In introducing Canada’s various welfare benefits, our aim is not to encourage people to stay home and live off welfare instead of working. Rather, it’s to show that when a new baby arrives, or when a family has a second or third child, there is still a safety net even if only one parent is working — so the child is cared for without the family having to worry financially. The Child Benefit also encourages parents to spend more time with their children and invest more in their upbringing, especially between ages 0 and 6, when parental input plays such a crucial role in shaping a child’s whole life.
