Universal Child Care Benefit (UCCB)

by Mike Holman

We recently had our second child and one of the documents we received at the hospital was an application for the Canada child tax benefits which are various benefit programs run by the Canadian government. The idea is to give money to parents of young children to help offset their costs. Some of the benefits are not dependent on income and some are. The universal child care benefit (UCCB) is one program that is paid out to all parents regardless of their income.

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How much does the UCCB pay?

The benefit is $100 per month per child under the age of six. This money is taxable but you can choose which parent declares the money so unless both parents are high earners then you should be able to keep a good chunk of the benefit.

Does it take a long time to fill out the paperwork?

No. In my case I just filled out some basic information like name, address etc on the RC66 form. You don’t have to include any proof of birth unless you are separated or the child is over a year old.

You can also apply online as well.

Don’t delay!

It is real easy to put off filling out the form because you are in a zombie state trying to feed your new baby at all hours of the night but you have to bite the bullet and get it done. Money is money! (and money is good).

See what Million Dollar Journey had to say about the UCCB program.

Canadian Capitalist also wrote about the UCCB.

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{ 15 comments… read them below or add one }

1 Canadian Capitalist

Thanks for the link!

2 MillionDollarJourney

Thanks for the link! I too love free money.

3 Personal Tax & Financial Planning

It’s not “really” free money! You’re tax dollars are funding the UCCB. The same argument goes for the “free healthcare” argument as well.

Nonetheless, I certainly don’t shy away from receiving the benefits (I have three kids) but I refer to it was my portion of Canada’s redistribution of taxes.

4 Kyle

So what you’re saying is, if I have a kid I need to move to Canada. That would probably give me an angle on healthcare too, if I were ever to lose my insurance.

5 Hamcake

So, it basically adds 1,200 onto your taxable income?

6 Michelle S

Just came across your blog, very informative. One thing about the UCCB is that you have to file your taxes to receive it, duh. After having our first we applied and got the $100 for about 6 months and didn’t even notice that it stoped coming. We got delayed filing that year (never knew rasing a kid would be so time consuming) anyways 10 months later the accountant told us that you don’t receive UCCB unless you file your return, opps. They assured us that the government would backpay us up to about 18mos. And yesterday I did see the deposit in my account, better late then never.

7 Mr. Cheap

Michelle,

Good point! I’m glad you’ll get the backpay.

8 harvwallbanger

Canada’s Universal Child Care Benefit is a WASTE!!

If your a two income family and both make $40000 or over, you end up giving most of the money back when you file for your income tax return in the spring.

We have two kids, so we received $2400 for the year. Since the UCCB is considered taxable income, you haven’t paid any tax on this money. So at tax time, we ended up giving $1650 of it back.

The Federal government should pro rate it based on your income and give you what you qualify for, so you don’t have to worry about giving a big chunk of it back during income tax season.

9 Four Pillars

Harvey, you’re not making much sense…

Yes, the UCCB is taxable but you still get to keep most of it. Hardly a waste.

Secondly – in your example you said you paid $1650 in taxes on $2400 of income which works out to 68.75%. If this is the case then you need a new accountant.

The highest marginal tax rate is I think around 46% which means you would have paid $1104 in taxes leaving you with $1300 – again, hardly a waste.

Last thing to keep in mind is that the lower earning spouse can claim the UCCB – this doesn’t help if both spouses are in the highest tax bracket but that is not the case for the vast majority of Canadians.

10 kate

Another thing to note is that you can opt out of the UCCB if you think it is such a waste. For most of us it is a help (I make no money as a stay at home mum, so we do get to keep it all) and while it isn’t much, it does offset our monthly ICBC payment.

“If you do not want to receive the UCCB, please call us at 1-800-387-1193.”
http://www.cra-arc.gc.ca/bnfts/uccb-puge/fq_pymnts-eng.html#q5

11 Mike

Thanks Kate – I wasn’t aware you could opt out – I wonder how many people “take advantage” of that option?

12 Doctor Stock

I wish they’d extend the age to 12 myself… but it’s better than nothing

13 L Fowler

Do you happen to know if it is more beneficial for a single parent to claim the UCCB on their income or as the income of the elegible dependant?CRA site mentions you can do either but I’m not sure which would be better.

14 Erika

Was wondering if you’d recieved an answer to your question. I’ve beentrying to get info on the same thing. ( L Fowler)

15 Erika

Single Parents – Universal Child Care Benefit
Another change was made to the Universal Child Care Benefit (UCCB) for single parents. The UCCB provides families with $100 per month for each child below six years of age. Prior to July 2011, in a two-parent family, the UCCB was included in the income of the lower-income spouse. In a single-parent family, however, the UCCB was included in the income of the single parent. The result was that single parents pay more tax on the UCCB, because the UCCB is taxed at his or her marginal tax rate. A single-parent family, earning the same income as a two-parent family, therefore paid more tax on the UCCB than the two-parent family.

As of July 2011, a single parent can choose to claim the benefit amount received in his/her own income; or, the UCCB can be included in the tax return of the dependant for whom an Eligible Dependant Credit is claimed. The single parent is also able to include the UCCB amount in the income of one of the children for whom the UCCB is paid, if the parent is not able to claim the Eligible Dependant Credit. [For Government of Canada information re Single Parents and the Universal Child Care Benefit see: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/117-eng.html.

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