The Canada Child Benefit (CCB) and Separation
Most people know about the Canada Child Benefit (CCB). It is a monthly, tax-free payment made to low or middle income families with children under 18. The amounts are not small – for example, if family income is about $33,000, you can get the maximum CCB of nearly $7000 per year for each child under 6 and about $6000 for each child 6-17 years of age. Naturally, as family income increases, the amount of CCB decreases. The payments go to the person who is “primarily” in charge of the care and upbringing of the child.
When parents are together, the tax legislation assumes the mother is the caregiver, and the CCB payments go to her. However, for separating or divorcing parents, it can be more complicated. Where one parent has the vast majority of caregiving responsibility for the child, that is a simple scenario. That parent is entitled to the full CCB.
However, cases of “shared parenting” result in each parent getting 50% of the CCB. The Canada Revenue Agency (CRA) considers “shared parenting” to be when a child lives with two different parents in separate homes on a more or less equal basis. Parents in this situation are both required to apply for the benefits. The CRA will decide if your situation involves shared parenting. Sometimes, evidence is needed to prove what the facts are, beyond a court order or separation agreement. There is uncertainty about how to count the time – whether it be in minutes, hours, days, overnights, or some other measure. And does time in school count? The tax legislation does not provide clear answers.
Be aware that the CRA will sometimes audit a parent for CCB payments improperly received. This might happen, for example, if the parent leads the CRA to believe they are the main caregiver of a child but it turns out the other parent has the child far more than 50% of the time. The CRA may try to recover the over-payment from the misrepresenting parent. Understandably, it may be hard to find the thousands of dollars to repay the CRA. So it is best to avoid problems by setting up your arrangements correctly at the start of any new parenting regime.
The best approach is to (1) tell the CRA of any changes to your parenting regime within 90 days of the change, (2) keep good records and supporting documents to prove your time with the child, and (3) contact a legal professional for advice.
You can also click on this CRA link for more information: Canada child benefit (CCB) – Canada.ca