May 15 UCCB Deadline:  Are You Telling Your Clients About It?

Have you alerted your clients about the changes in the eligibility for the increased UCCB benefits?

The enhanced benefit starts July 2015 and will be paid retroactive to January 2015 at that point. That’s big money for some families!  But some Canadians must apply for the benefits separately by May 15, 2015 - that’s an extension from the original May 1 deadline.  Those who apply late will still receive the benefits, but not until after July.  Application must be made by November 2015 to qualify for the January benefit.

Doing so is a golden opportunity to enhance your relationships, differentiate your year round services from others and help your clients put more money towards family goals. In fact this is a great reason to review family tax planning opportunities to minimize and manage child-care expenses and increase education savings.

The October 2014 economic statement announced an enhanced Universal Child Care Benefit (UCCB), providing parents up to $1,920 per year (or $160 per month) for each child under six years old (up from $100 per month previously), and a new benefit of up to $720 per year ($60 per month) for each child aged 6 to 17.

Parents who have already applied for or received the Canada Child Tax Benefit (CCTB) or have been receiving the UCCB, will receive the increased UCCB benefits automatically.

Any families who have children over the age of six and think their older child/children will not be eligible for payments will be nicely surprised to learn that they will, starting in July. However, if they have never applied for either CCTB or UCCB for these children, parents will need to apply to CRA for children over six years old in order to begin receiving UCCB benefits for them, .

What to do?  Canadians who have never applied for these benefits for some or all of their children will need to complete Form RC66, Canada Child Benefits Application, in order to qualify for and start receiving the UCCB.  Astute tax or financial advisors will be proactively telling their families about this and offering to do the application process for them.

A few other facts about eligibility and rules of the UCCB to review with your clients:

• The eligible child must be under the age of 18, and there is no requirement that the child is in a day care program.  Therefore stay-at-home parent arrangements are fine for these purposes.
• The applicant for the UCCB must be the primary caregiver.
• The applicant must be a resident of Canada and both the applicant and the spouse or common-law partner must be a Canadian citizen, permanent resident, a protected person under the Immigration and Refugee Protection Act, or a temporary resident who has lived in Canada for the previous 18 months.
• There is no income-testing – it’s a universal payment.
• It’s up to the applicant to notify CRA if a child is no longer in his/her care (that is, the child stops living with you or dies). The overpayments are repayable later if this step is missed.
• If the person who was caring for the child and receiving the UCCB payments dies, the child’s new caregiver should contact the CRA. A surviving spouse or common-law partner who was living with the deceased person at the time of their death will automatically receive the future payments in most cases. However, new caregivers such as grandparents or other guardians will have to apply  for the UCCB by completing Form RC66.
• The UCCB is a taxable benefit. The spouse with the lower net income reports the UCCB income.

Be a hero:  be sure to alert your clients to the increased UCCB benefit and the impending application deadline.