As the new Canada Child Benefit launches July 1, critics of the Liberal government’s budget are making predictions that the payments could spark disputes between divorced parents over child support.
How Does The Payment Work?
The Canada Child Benefit (CCB) is a tax-free payment designed to help low and middle income parents of children under 18. It combines the three existing benefits – the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS) and the universal child care benefit (UCCB) – into a monthly payment.
Depending on the number and age of children, amounts reach a maximum of $6,400 for children under five, and $5,400 for children aged six to 17, spread out over one year. While the payments are not included in income, calculations for the benefit are ‘income-tested’ such that as income rises, payments decrease.
Why The Debate?
According to CBC News, opposition critics are citing the Liberals’ lack of guidance for divorced parents on how to divide tax benefits and calculate support payments following the introduction of the new benefit. Finance critic Lisa Raitt claims that the benefit could affect 1.2 million divorced Canadian parents with separation agreements and child support orders.
In his appearance before a House of Commons Standing Committee, Finance minster Bill Morneau provided reassurances that the benefit would have no impact on child support payments, citing a structure that is identical to its predecessor, the Canada Child Tax Benefit.
Whether the benefit will turn out as litigation-free as Morneau claims remains to be seen.
Divorced parents looking to vary court orders and separation agreements are wise to seek the advice of a lawyer experienced in navigating post-divorce matters.