The Universal Child Care Benefit (UCCB) Explained

The Universal Child Care Benefit, or UCCB, is a $100 taxable monthly payment to help with the cost of raising children under six years old.

This can be a great way to receive a little extra cash each month, and since you are entitled to it, it can be worth it to take advantage.

Who is Eligible for the UCCB?

To be eligible for the Universal Child Care Benefit, you must be the primary care giver of a child under the age of six and a resident of Canada. If you already receive the Canada Child Tax Benefit (CCTB) then you are automatically set to receive the UCCB.

“Primary caregiver” means that you:

  • Supervise the child’s daily activities.
  • Take care of the child’s daily needs (including medical needs).
  • Arrange for child care when necessary.

Note that if the child is maintained by a welfare agency (legally, physically, or financially) you can’t claim to be the primary caregiver.

A primary caregiver can be mother or father, or a grandparent, or a legal guardian.

It’s worth noting that “child care” choices you are entitled to make include staying at home, so you don’t have to use day care services in order to qualify for the UCCB.

Universal Child Care Benefit - The UCCB Explained

Applying for the UCCB

The Canadian government recommends that you apply for the UCCB as soon as possible after your child is born. Since you are eligible up until the child is six years old, the earlier you apply, the better. If you weren’t a resident of Canada, though, you have to wait until you are a resident to apply. Also, if a child comes to live with you, you can begin to receive the UCCB.

You use the Canada child benefits application to apply for the UCCB. You have to have applied for the CCTB in order to receive your child care benefit. You can manage your account online. If you have signed consent for the Automated Benefits Application at the birth of your child, don’t re-apply. This can cause problems with processing.

You are likely to hear back within 80 days.

How is the UCCB Taxed?

The $100 you receive each month is taxable; this means that you will have to pay taxes on your benefit. However, even when paying taxes, it would still be worth it to accept the benefit.

The income is taxed to the lower-income spouse. This can be a slight advantage if the lower-income spouse is the one staying home to care for the child. Since there is no need to send your child to day care, you not only save money on child care, but the money is not taxed if it’s the spouse’s only source of income.

Realize, though, that it will reduce the spousal amount involved, increasing the taxes of the working spouse. Still, though, the taxes on $100 still aren’t that high, and it can still be worth it.

Even though $100 is not a huge payment, it might be nice to cover the occasional babysitter when the parents want a night out.

Written by Tom Drake

Tom Drake is the owner and head writer of Canadian Finance Blog. While you’re here, consider signing up for the RSS feed or email subscription. Both deliver the latest articles directly to you! You can also follow me on Twitter for all the latest posts or to send me any comments or questions!

10 Responses to The Universal Child Care Benefit (UCCB) Explained

  1. Great post! The UCCB is not, though, tied in any way to formal child care. I think it would be more accurate to say it is to help with the cost of child *raising,* not child care (only because people tend to think of “child care” as formal care provided by someone other than the child’s parents).

    Also – while the payment is taxable in the hands of the lower income-earning parent, by default it is *paid* to the mother. The slip needs to be entered on the return of the lower-income-earning parent at tax time, no matter who actually received it.

    Finally, while a parent earning no income will pay no income tax on the UCCB amount, it *will* reduce the spousal credit available to the supporting spouse – so there will be a tax impact in that case.

  2. Alexandra, thanks for the clarification. Good point about the spousal credit, I’ll edit the post to include it.

    What’s your opinion on the UCCB? While it’s not a large amount, I prefer that it’s not a ‘daycare or nothing’ plan so that parents are encouraged to stay home and raise their children.

  3. Hi Tom – I’m pretty neutral on the UCCB. I would prefer a less-complicated tax system overall — i.e., lower overall tax rates — than a system which allocates credits and payments to people based on their demographic characteristics. I particularly dislike the Children’s Fitness Tax Credit (but I have two kids and make use of the credit!). My concern with any tax credit or deduction is that people understand it and plan for it appropriately. :)

  4. If the tax of the earning spouse is increased then would it really help the family to go for this child tax benefit? if overall the net benefit is zero then why would parents like to take this tax cut?

  5. Hi I was wondering if anyone could help me. My ex husband and I seperated Sept 29th of 2010 and I filed all the necessary forms with the government. They have no decided that I needed to fill out a questionaire and provide proof of seperation. They have no cctc on hold and say they cannot connect me to anyone in the verifications department. Also they are telling me that it could take up to 45 days for my payment to be issued. I depend heavily on that money and am behind in rent now and need to go to the food bank for groceries. Is there anything I can do

  6. @ Melissa….
    To get half of your entitled amount means that either you have shared custody of a child or that you have a debt with that specific benefit and they are reducing your benefit to pay down your debt.

  7. My favorite part about the UCCB credit is if you don’t need to rely on it than you can fund your childs RESP and buy a Critical Illness Policy and Life Insurance to protect your child and give them insurance for life. This way the Government starts your kids off with a financial bang!

  8. Good afternnon,
    I am studying at Fanshawe right now and working on a case study and I have a question for you.
    If a single mom with a 2 year old receives social assistance, will she still be taxed on the UCCB?

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