Backgrounder: Ensuring the Availability of the Canada Child Benefit to Families in Provincial/Territorial Kinship and Close Relationship Programs
The Government of Canada introduced the Canada Child Benefit (CCB) in 2016 to give low- and middle-income families more money each month, tax-free, to help with the cost of raising children. Compared to the old system of child benefits, the CCB is simpler, more generous and better targeted to those who need it most.
Nine out of 10 families get more under the CCB than they did under the old system of child benefits, and families benefitting are receiving on average about $6,800 in annual benefits. The CCB provides support to almost 6 million children every year.
To be eligible for the CCB in respect of a child, an individual must live with the child and be the parent who primarily fulfils the responsibility for the care and upbringing of the child. For CCB purposes, an individual who is neither the biological parent nor the adoptive parent of a child may still be considered a parent of the child, where the child is wholly dependent on the individual for support and the individual has, in law or in fact, the custody and control of the child.
Provincial/Territorial Kinship and Close Relationship Programs
In certain jurisdictions, kinship and close relationship programs, such as the Prince Edward Island (PEI) Grandparents and Care Providers program, are available to families with children in need of protection and requiring out-of-home care for safety reasons on a temporary basis.
Such programs are intended to provide an alternative to children being brought into the legal custody and guardianship of a province or territory when there is a care provider such as a grandparent, extended family member or close friend who can step in to provide an appropriate and safe care alternative. To encourage such arrangements, certain jurisdictions provide financial assistance to care providers to help defray the costs they incur in caring for the child (e.g., costs associated with room, board, clothing, transportation, recreation, personal items, household supplies and supervision). In general, financial assistance provided by a province or territory to a care provider under such circumstances would not be taxable, nor would it be taken into account for the determination of income-tested benefits and credits.
Eligibility for the CCB
The Government will propose amendments to the Income Tax Act to clarify eligibility for the CCB in respect of children being cared for under provincial/territorial kinship and close relationship arrangements. The proposed amendments will ensure that individuals caring for a child under the new PEI Grandparents and Care Providers program, or under similar kinship programs in other provinces/territories, are eligible for the CCB regardless of whether they receive financial assistance under such a program (provided they meet all other CCB eligibility criteria).
The Government intends to table legislation in Parliament to implement this proposed clarification at the earliest opportunity.
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