5 things to know about the new Canada Child Benefit

The Liberals promised during last fall's federal election that nine in 10 Canadian families would be better off once their new child benefit package rolls out.

Significantly better to the tune of $2,300 annually, on average, according to the finance department's calculations for the 2016-17 benefit year.

Is that really true?

• New Canada Child Benefit rolls out with a more subtle political pitch

On July 20, Canadian families will find out exactlyhow much their new monthly payments will be.

But assessing the full impact of the new Canada Child Benefit (CCB)may take longer.

Here are some things to know about the new monthly child benefit:

How much will families receive?

When the federal budget came out in March, the finance department put out asimple calculator.

Since then, the Canada Revenue Agency has added amore complex calculatorfor all governmentbenefits. Itrequires inputting more information,but calculates a more exactfigure.

For lower-income households, the CCBis billed as a game-changer.Finance Canadasays the CCB willlift300,000 children out of poverty, compared with 2014-15 figures.

Here's why: families with less than $30,000 in annual net income receive these maximum yearly benefits:

• $6,400 per child under the age of 6.
• $5,400 per childaged 6 through 17.
• An additional$2,730 per child eligible for the disability tax credit.

Families with higher incomes receive progressively less, until the CCBphases out entirely for the richest households. But the exact calculation of when that point it reachedis a bit complex.

The number and age of children is a factor. So are all the components of a family's adjusted net income, which is based on line 236 on your federal tax form.

A high-earning family with a lot of deductions may come in just low enough to receive some of the benefit. A single parent making the same individual income as a married parentmay receive more benefits than the two-income household.

In calculating family net income for CCB purposes, the formerUniversal Child Care Benefit (UCCB)and Registered Disability Savings Plan (RDSP) income are subtracted from your taxable income.

In other words: the monthlyUCCBpayments families received until now aren'tpaddingthe income on which the new amounts arebased.

Can't wait for July 20 to find out the exact amount of the benefit? Anyone registered for anonlineCRAaccountcan look it upnow, based on a2015 tax assessment.

Is this benefit retroactive?

No. Unlike the previous Conservative government'srolloutof its enhancedUCCBlast July, there's no lump sum retroactive payment dating back to Jan. 1 this time.

The legislation to create the new benefit only received royal assent to become law in June. But the federal benefits year begins in July, meaning programs are split over the calendar year anyway.

What's been cut?

The revised benefit isn'tthe only impact on a family's bottom line.

The CCB is also meant to simplify things, so it replaces:

• The UCCB, the current monthly child payments of $160 per child under six and $60 for kids between 6 and 17.
• Canada Child Tax Benefit (anadditional income-tested family benefit).
• National Child Benefit (a supplement forlow-income families).
• The Conservatives' Family Tax Cut also known as "income-splitting for families" with children under 18, whichsignificantly lowered the tax payable, up to $2,000, for families when one parent or guardian made significantly more than the other.
• Children's Fitness Tax Credit and Children's Arts Tax Credit. Thesedeductions worth up to $150 and $75 per child, respectively, are being phased out cut in half in 2016, then eliminated entirely for2017 and beyond.

Unlike the previous UCCB, the new CCB is not taxable income, so there will be no extra tax hit next spring.That means that even if your monthly paymentamount has decreased, you may still be better off overall.

Familieshave to do all themath the taxes no longer paid, but also the credits no longer claimed before drawing conclusions about whether they're better off.

And don't forget:the federal tax brackets changed last January. The middle income rate dropped from 22 per cent to 20.5 per cent, while a new tax rate of 33 per centkicked in for incomes above $200,000.

How can I make the most of it?

The key to maximizing the CCB liesin minimizing ahousehold's net income. Any deductions thatlower the amount online 236 of the federaltax return will result in higher monthly benefit payments.

For example, peoplewho don't contribute the maximum to their registered retirement savings plans (RRSPs)missout on more tax-free CCB income.

Claiming costs like child care, moving expenses or union dues lowers the taxable net income amount as well. Keep those receipts.

What about Canada Post disruptions?

At time of writing, the risk of postal service disruptions this summer appears postponed, but not over.

In the event thelabour dispute escalates,the Canadian Union of Postal Workers (CUPW) has agreed to continue delivering the CCB chequesissuedon the 20th of eachmonth.

But the government encouragesanyonewho still receives benefitspayments inthe mailto sign up for direct deposit.