Families have started receiving the new Canada Child Benefit. The Federal government claims this new revamped benefit will mean more money for 90% of families. They are comparing it to the old benefits families were receiving under the former government’s plan. If you’re confused as to how it works here’s what you need to know.
It essentially replaces three benefits that families with kids under the age of 18 may have been already been receiving. The Universal Child Care Benefit, the Canada Child Tax Benefit and National Child Benefit supplement. The new benefit is paid monthly as long as parents have filed their 2015 income tax returns. If you already receive any family benefit you will be automatically enrolled for the Canada Child Benefit- there is no new application you have to fill out. As for parents of newborn children, they can apply using the Automated Benefits Application (ABA) service.
It's based on need, taking into account how many children you have, how old they are, and factoring in total household income. Generally speaking if your household income is more than $140,000 your benefit starts to shrink to less than what you were receiving in the previous program. After a household income of $200,000 you will receive no benefit under this program. But if you have an income of say $30,000 and have two kids under the age of 6 you are eligible to receive $1066 a month. That's a lot more than the previous government was offering for people in this income bracket.
The beauty of the Canada Child Benefit is it is calculated after deductions. That means your total income, minus RRSP contributions and any other deductions, like child care expenses. If you have room to contribute more to your RRSP and can make that happen, you could end up reducing your total taxable income for 2016. This will effectively do three things.
1. Increase the amount you are contributing to your retirement and give it more time to grow.
2. Result in a larger tax refund.
3. Put you in a lower tax bracket qualifying you for more Canada Child Benefit starting in 2017.
If you have some extra money to invest, you could use it wisely be making an RRSP contribution.
The tax situation for many Canadian families has changed dramatically in 2016 and will be changing even more in 2017. One example is the Children Arts Tax Credit and the Children’s Sport Tax Credit are both disappearing. If you have one, speak to your accountant about what you can proactively do to improve your tax situation. There are also great resources online at the CRA website you can look at. If you have signed up for online payments but still received a schedule in the mail, you will have to get in touch with the CRA to make arrangements to have it sent electronically starting next month. Also I highly recommend opening a My Account with the CRA, its free and will give you a fascinating amount of financial information including how much your benefits will be and when they will be deposited in your account.
RELATED: Help Your Kids Understand the Value of Money
As a mom of two, I know it’s expensive raising kids. From essentials like clothing and school supplies, to fun stuff like toys and crafts, there’s always something to spend money on. According to MoneySense Magazine, the cost to raise a child from cradle to 18 years of age is now more than $250,000. That’s a cool quarter of a million to bring up junior. This number can be pretty unsettling, especially for parents who are facing an insecure financial future.
The economy took a big hit in 2008 and many moms (including me) lost their jobs. Some moms haven’t returned to the workforce since then, or are working freelance, part time, or temp jobs. Any of these situations can lead to financial insecurity and create stress when the cost of raising kids continues to rise.
It wasn’t until I had kids that I discovered the wonderful world of the second hand economy. Up until that point, I never had a situation where I had loads of barely used items I no longer needed, coupled with looming big ticket purchases I would only use for a few months. One of my favourite places to shop is Value Village.
At Value Village, there are all kinds of high-quality, pre-loved clothing, toys, and household items at bargain prices. And you never know what you might find! Over 10,000 items arrive every day, so there is always something new to go through; all of which will contribute to lowering those hard-to-avoid child-raising costs. Here are some kid items I recommend saving on by buying second hand, and some you still need to splurge on.
Parenting pain point? Kids growing out a pair of jeans, shoes, or a jacket in a matter of months. It's costly to keep up with their growing demands (pun intended). Value Village is the right place for picking up gently used (and sometimes brand new) kids clothing. My kids are in need of bottoms for the summer, so I gathered up a pile of them for less than $16. If I were buying this same lot brand new, it would have cost me at least $80. To get the best quality clothes, check for loose stitching, fading, or stains. Also be sure to check the bottom of shoes for wear and tear.
One of the most impressive parts of Value Village is the "toy wall" (as my daughter likes to call it!) And it truly is a wall of toys.
On my latest trip, I picked up a few brand name ( VTech, Leap Frog, and Little Tikes) toys. The Little Tikes push and walk toy retails for more than $50. It was a bargain at $3.99.
I also found a colourful play mat, for only 99 cents. When buying toys, it’s always a good idea to Google the name when you get home to make sure there are no recalls on them. A toy can seem perfectly safe, but there could be a malfunction you may be unaware of.
My daughter was in her crib for three years, while it seems my son is only going to sleep in it until he turns one. Second hand bedding and bath items are a great way to save money. At Value Village, I found crib sheet and blankets for less than $3. Baby bath towels are also a big expense. If you want to go for the cute ones with the animal hood, they will cost you well over $30 brand new. I was lucky to find a few for less than $3 in almost new condition.
The second hand economy is robust and finding a bargain is easy but there are some kid items you should buy brand new. Here are some things you should splurge on.
As it turns out, Value Village doesn’t carry cribs or car seats for infants. The reason being, they cannot guarantee that these items are safe, so parents looking for cribs and/or car seats should splurge on them and pay full retail. All children’s car seats and booster seats sold in Canada have an expiry or useful life date on them. You should also never use a seat made before January 1, 2012 because under Health Canada’s Canada Consumer Product Safety Act, it may not meet the latest requirements. Health Canada does not recommend using cribs older than 10 years. For all these reasons, splurging on car seats and cribs makes sense.
Baby gates and other safety equipment also have to follow strict guidelines. For example, Health Canada warns that baby gates with diamond-shaped openings or "V" openings at the top larger than 38 mm (1 ½ in) are illegal to sell in Canada. Baby gates must come with information that identifies the manufacturer, model name or number, and the date of manufacture. It must also come with instructions for use and installation. In order to ensure your child's safety, splurging on these items is the best option.
This is a matter of personal choice so it may be different for you. Personally, I wanted to bring both of my brand new babies home from the hospital in brand new outfits. I spent a good deal of my pregnancy picking out that perfect, tiny outfit they would come home in. It's the one outfit I have saved and will probably give to them once they have their own kids.
The money I'm saving by buying second hand items has allowed me to put more money into my children’s RESPs and use the extra cash for fun activities. Don't forget to splurge on something for yourself. You've earned it.
Printer-friendly version