Universal Child Care Benefit
Under Harper’s conservative government, all families were entitled to receive the Universal Child Care Benefit (UCCB), regardless of family income. The only variable that determined how much money each family was entitled to receive was the age of their children. Families with children under the age of 6 received $160 per month per child, and families with children from the ages of 6 to 17 received $60 per month per child. The UCCB is fully taxable.
Under Trudeau’s Liberal campaign promises, the new government will scrap the UCCB, the Canada Child Care Benefit, and the National Child Benefit Supplement and amalgamate the programs under a joint name – the Canada Child Benefit. The Canada Child Benefit would be completely tax-free but have an inverse relationship with family income– meaning that the more a family earns, the less Canada Child Benefit they would be entitled to receive. Families that earn more than $200,000 each year would not be entitled to any Canada Child Benefit at all.
How this proposed change will affect Canadian families depends on each separate income scenario. Lower-income families stand to receive a larger sum of tax-free money, whereas higher-income families may receive less than what the UCCB currently provides, if any money at all.
Family Tax Cut
Under Harper’s government, the Family Tax Cut, commonly referred to as ‘income splitting’, offered families with children under 18 with the option to shift up to $50,000 in income from one spouse or partner to the other to get the lowest possible tax rate on that $50,000. Of course, income-splitting is not beneficial to single-parent households, couples with similar income levels, and families only with children who are 18 and over.
Under Trudeau’s plan, he has proposed to cancel the Family Tax Cut.
Tax-Free Savings Accounts (TFSAs)
Under Harper’s government, he increased the annual TFSA contribution limit to $10,000 earlier this year, despite critiques that TFSAs only benefit the wealthy. The Liberals have promised to roll it back to the previous contribution limit of $5,500. Depending on your level of disposable income, this change may adversely affect your savings goals, as some families choose to contribute to TFSAs to compliment some more traditional savings vehicles such as RESPs and RRSPs.
About Global RESP Corporation
Global RESP Corporation (GRESP) is one of the recognized Scholarship Plan Dealers and providers of Registered Education Savings Plans (RESPs) in Canada since 1998. GRESP is the primary distributor of the Global Educational Trust Plan (GETP), offered by Full Prospectus through registered Dealing Representatives across Canada. Our Dealing Representatives embody decades of RESP experience and aim to provide clients with quality and trusted services, while helping families save for their child’s future education. As of March 31, 2015, the GETP has over $1 billion* in pledged contributions by family members, over $620 million* securely invested in a professionally managed portfolio and has made over $225 million* available for post-secondary education funding to Canadian students studying in 46 countries*. For further information, contact firstname.lastname@example.org or visit www.GlobalRESP.com.
*Source: Global Educational Trust Foundation