Canada Dental Benefit: Are Your Clients Applying for It?

Evelyn Jacks

Dental care appointments are just one of those annual “back to school” events most parents sign up for.  This can have immediate tax advantages. Recall, the Canada Dental Benefit was introduced a year ago.  Yet, many parents may not know about it and may not be taking advantage of this opportunity to supplement dental costs incurred for their children. Here are some talking points to re-engage your clients with families this fall:

Who is covered?  The Canada Dental Benefit is available to families whose net income is less than $90,000 for children under the age of 12. 

What period of time does it cover?  Parents may claim the costs of dental care incurred in two periods of time:

• October 1, 2022 and June 30, 2023
• July 1, 2023 to June 30, 2024

Note that you can apply for an additional payment by midnight June 30, 2024 if you made a claim in the first period but missed claiming and additional amount if you paid more than $650.  An additional payment is possible for the second period, as well, but in this case you must qualify and apply for a first payment, and expect to pay/pay more than $650 for the services.

Who can apply?   It’s not possible to make a claim for the CDB if parents have access to private dental insurance.  Note that custody arrangements also matter in the case of separated couples.  The person who has full custody will get the full payment; this is also the person who is receiving the Canada Child Benefit. If not receiving the CCB, it is not possible to receive the CCB.  

Parents with shared custody can split the payment.  This requires that the child live with the parent/supporting individual at different addresses at least 40% of the time or on an approximately equal basis.  The CRA provides an example of a child that lives one week on and one week off with each parent/supporting individual (50-50) or 4 days one week and three days the other (between 40% and 60%)

There is also a family net income limitation to determine the amount that is payable. In the case of couples that live together, family net income is included.  For separated couples, use the net income used to determine access to the CCB. 

How much is refundable?  A maximum of two payments per child are possible and will depend on the adjusted net income calculation as described above.  Note that family net income can be reduced by making an RRSP contribution and making sure deductions like child care expenses and moving expenses are properly and completely claimed.   There are also special rules to take note of in the year of separation.

Adjusted family net income will be determined as follows

• Using the 2021 return for dental care received between October 1, 2022 and June 30, 2023
• Using the 2022 return for dental care received between July 1, 2023 and June 30, 2024

What can be claimed?  There are a host of expenses that can be claimed.  They include:

• diagnostic services
• endodontic services
• oral surgery
• orthodontic services
• periodontal services
• preventative services like cleaning
• prosthodontic services
• restorative services

There is a catch, of course.  It’s important to keep dental care receipts for 6 years in case of audit. Official receipts from licensed service providers must be produced.  This includes a dentist, denturist, and dental hygienist.

Make a Difference: Nothing is available if parents have not filed tax returns for 2021 and 2022.  That’s a first step and if you are aware of any filing delinquencies for families in your community for any reason, including hardships like illness, caring for a loved one or natural disasters, be sure to let them know about the Canada Dental Benefit.  This is a great way to reach back to recover “new money” for prior expenditures, that can help with school supplies and other inflation-enhanced costs of getting ready for the fall.  

Financial advisors should also reach out and provide the Canada Dental Benefit opportunity as another reason to maximize RRSP contributions in 2023.