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.
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.