The Canada Child Benefit Explained

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The Canada Child Benefit (CCB) is a monthly payment made by the Government of Canada to eligible families with children. Given the high costs of raising a child, this payment is a welcome boost to most family bank accounts.

How do I get the Canada Child Benefit (CCB)?

When you have a child and register their birth, you will be automatically assessed for the Canada Child Benefit. If you regularly file your income taxes, it will be calculated and disbursed to you automatically. If you are new to Canada, you may need to fill out the RC66 Canada Child Benefits Application.

Typically your first CCB payment will arrive the month following your child’s birth month. For example, my daughter was born in August and I received my first CCB payment in September. You will then continue to receive the CCB on a monthly basis.

The CCB is completely tax-free, and deposited directly into your bank account or mailed as a cheque to your home. I find my CCB payments are typically deposited in my bank account on the 20th of every month.

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Once you receive your CCB, one of the best things you can do with it is to invest it in an RESP. I recommend opening an RESP with Wealthsimple to earn the best return on your money by putting it to work in the stock market.

How is the Canada Child Benefit calculated?

The Canada Child Benefit is income-dependent, but most families with incomes below $180,000 will receive at least some money. The amount you receive is based on your adjusted family net income. This is your net household income after allowable deductions, like RRSP contributions. 

Household incomes below $30,000 will receive the full amount of CCB. Those with incomes above $31,120 will experience a percentage of clawback per child. There is an additional percentage clawback on the CCB per child for incomes above $67,426. The clawback percentages per child based on household income are listed in detail on the Canada Revenue Agency website.

How much is the Canada Child Benefit per month?

Families can receive up to $6,639 per child under the age of 6, and up to $5,602 per child aged 6 to 17. The maximum Canada Child Benefit is $553.26 per month for a child under age 6, and $466.83 per month for a child age 6 to 17. If you have more than one child, you will receive a CCB payment for each of them.

Want to quickly calculate how much Canada Child Benefit your family may qualify for? This awesome CCB calculator will give you an estimate!

How to use your RRSP to increase your CCB payments

Want to receive a higher monthly CCB payment? There’s an easy way to do so while saving more for your financial future. Because the CCB is calculated based on your net household income, you can use RRSP contributions to lower your net household income and qualify for a higher CCB payment.

Steps to use your RRSP to increase your CCB payments:

  1. First, open an RRSP. We recommend Wealthsimple for your RRSP and your child’s RESP! 
  2. Set up a regular monthly deposit to your RRSP.
  3. When you file your income taxes, claim your total RRSP contributions for the year. This will lower your taxable income, and increase the amount of CCB you qualify. 

The Registered Retirement Savings Plan (RRSP) is a tax-deferred investment vehicle that lets you save money for retirement. The RRSP lets you pay less income tax now, because you will pay income taxes in retirement when you withdraw your savings from the account. When you make contributions to your RRSP, you can claim that contribution when you file your income taxes. This effectively lowers your taxable income, which can help you qualify for a higher CCB payment.

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This strategy makes the most sense for higher-earning families with household incomes above $65,000, because that is the threshold at which they begin to experience the largest clawbacks on the benefit. Now, a family making $65,000 is running a shoestring budget to support themselves as is so they may not have much money to put in an RRSP. However, even a small amount can help reduce their overall income tax burden and increase their CCB payment by a few dollars each month.

A family earning $72,000 per year might have some wiggle room. If they can put $8,000 in an RRSP, they’ll drop their household income below the $65,000 income threshold and thus increase their CCB payments and reduce the income taxes they pay.

What can you spend the Canada Child Benefit on?

The CCB can be spent or saved however you choose. Families can determine how to best use the funds in their own household. Many choose to put it into savings, but others use it towards household expenses. You know where your family needs extra money the most!

Here are some ways you might use the Canada Child Benefit:

I’ve heard many Canadian parents in online baby forums say that if it weren’t for the CCB, they wouldn’t be able to afford to stay at home with their children. The Canada Child Benefit is an incredible help to the budgets of families that choose to have one parent stay at home full-time with their children.

You are entitled to the CCB whether you work or stay home and whether you are in a two-parent household or a single parent.

I personally use my CCB payments towards childcare expenses. That is the biggest hit to my household budget with a baby. The Canada Child Benefit makes this expense much more manageable. This lets me free up money to contribute to my daughter’s RESP.

If it weren’t for the CCB, I wouldn’t be able to afford as many childcare hours and might even have to skip RESP contributions, which would be terrible for both me and my daughter.

The Canada Child Benefit is an awesome boost to Canadian family bank accounts. Parenting is stressful enough without worrying about finances! Make sure to factor the CCB into your household budget if you’re expecting a bundle of joy. It might help you even more than you think!

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Student debt killer, super saver, and stock market addict. BSc. in Chemistry from the University of Alberta, MBA in Finance from the University of Calgary. CEO x 2 and MOM x 1. Currently residing in Calgary, Alberta, Canada, but hooked on travelling.

4 Comments

  1. In a 2 parent household, where one parent takes Mat Leave, how do you do calculate for their income for purposes of calculating CBB benefit? Is it the income they receive through EI?

    • Yes it is! Your EI payments during parental leave still count as taxable income (many parents actually find they owe taxes after their maternity/paternity leave, so prepare yourself!!). The household income will be the working parents’ income + EI income for the parent taking leave. CCB will be calculated based on that total!

  2. Hey Bridget,
    Excellent article, I am always surprised that many new parents are not aware of these benefits (or the RRSP trick).
    Thanks for writing this easy to understand piece.