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What Is The Baby Bonus Or Canada Child Tax Benefit And Does It Qualify For A Cash Loan?

The Canada Child Benefit (formerly the Canada Child Tax Benefit) is a tax-free monthly payment from the federal government intended to help families manage the costs of raising their kids. If you currently receive CCB payments, you likely qualify for a Magical Credit cash loan!

Magical Credit provides short-term cash loans to most people receiving income from the federal and provincial government on a monthly basis, with fewer restrictions and hoops to jump through than anyone else in the industry.

What is the “Baby Bonus” or Canada Child Benefit?

While there are a number of so-called “baby bonuses” paid out to families by various levels of government, the federal Canada Child Benefit is the largest and best-known. Introduced in 1989 as the Canada Child Tax Benefit, the CCB was designed with the intention of reducing rising child poverty rates, particularly in urban areas and remote communities.

Families and single parents of children under 18 years of age must apply for the CCB in order to receive their monthly payments, which are administered by the Canada Revenue Agency (CRA). The CRA uses information from each caregiver’s tax returns, as well as the number of children in the household, to calculate the family’s benefit amounts.

For families earning less than $30,000 per year, the CCB will pay out $6,400 per year for each child under the age of six. For children six to 17, this amount is reduced to $5,400 per year. In addition, families of children with a physical or mental disability can receive $2,730 per year under the Child Disability Benefit (CDB).

The exact amount families earning over $30,000 per year will receive varies, with most households in the over $150,000 bracket receiving little to no direct benefit from the program.

Who is eligible for the CCB?

In order to be eligible for the CCB, you must meet the following criteria:

  • You must be the primary caregiver of at least one child under 18 years of age.
  • This child must live with you.
  • You have to be a resident of Canada.
  • At least one of the child’s caregivers (spouse, common-law partner) must be a Canadian citizen, permanent resident, protected person (such as a refugee or asylum-seeker), temporary resident of at least 18 months with an active permit, or Status Indian.

How do I receive the Canada Child Benefit?

As noted previously, the CCB is administered by the Canada Revenue Agency, so you’ll have to have been diligent about submitting your annual tax returns! If you are in good standing with the CRA, you will have a much easier time applying to receive benefits.

If you are eligible, applying for the CCB is a simple process. The Canadian government offers the option of applying when you complete your newborn’s birth registration via the Automated Benefits Application. You can also register online via your CRA account, or by filing an RC66 form with your tax return.

These days, most payments from the CRA are directly deposited into your bank account, which is also a requirement to qualify for a cash loan based on your CCB.

Apply for a Child Tax Loan

How can I maximize my baby bonus benefits?

Because your CCB payments (and most provincial equivalents) are calculated based upon household income, any amounts which can be deducted from the net income you report on your taxes will go toward increasing your family’s baby bonuses. You should keep receipts related to costs like moving, medical treatment, union dues and (most pertinently) child care in order to write them off as expenses. Parents can write off as much as...

  • $8,000 per child for kids under seven
  • a healthy $5,000 for kids seven to 16
  • $11,000 for disabled, dependent children of any age

Here are a few examples of deductible child care fees:

  • Daycares
  • Nurseries
  • Nannies
  • Day camps
  • Overnight boarding schools

Another great tip is to maximize your RRSP contributions. As RRSP contributions are not counted as taxable income, you can put more money toward the future while improving your chances of receiving a higher baby bonus.

Remember, Canada Child Benefits aren’t taxable income; knowing what you can write off therefore amounts to free money, which can make a huge difference when finances are tight.

What happened to the Universal Child Care Benefit (UCCB), National Child Benefit, etc.?

Although the original Canada Child Tax Benefit (CCTB) was introduced all the way back in 1989, its current form can be traced to 2016 when the new Liberal government unveiled sweeping changes intended to simplify and enhance its payouts to lower-income families. Besides the CCTB, there was also the Harper-era Universal Child Care Benefit (UCCB), and the National Child Benefit (NCB) supplement for lower income families, as well as a number of more niche credits for kids’ fitness and the arts.

The CCB has effectively replaced all of these programs, rolling the various payouts into a single stream. This decision simplifies matters for beneficiaries, as some of these previous benefits were tax-free while others counted as income. The CCB also has the benefit of reducing some of the CRA’s administrative load.

Child Benefits by Province

The Canada Child Benefit is just one of numerous benefits for families in Canada. Almost every province and territory offers its own payments and tax breaks for parents, which can help supplement the support families receive from the federal government.

It can get a little confusing though, as every province calculates benefits a different way. We’ve prepared a table outlining these provincial programs, so you can get an idea of how much you may be eligible to receive from your own local government:

Province Benefit(s) Payments Amount(s)
Alberta
  • Alberta Family Employment Tax Credit (AFTC)
  • Alberta Child Benefit (AFC)
  • The AFTC pays up to $2,064 per year to working families based on income and number of children.
  • The AFC pays up to $1,128 per year for the first child and $564 per month for each additional child.
British Columbia
  • BC Early Childhood Tax Benefit (BCECT)
  • The BCECT provides up to $660 per child per year to families based on income and number of children.
New Brunswick
  • New Brunswick Child Tax Benefit (NBCTB)
  • The NBCTB pays up to $249.96 per child per year to working families based on income.
  • Low-income families may also qualify for the New Brunswick School Supplement, a once-yearly payment of $100 intended to offset the costs of buying school supplies.
Newfoundland
  • Newfoundland and Labrador Child Benefit (NLCB)
  • Mother Baby Nutrition Supplement (MBNS)
  • The NLCB pays up to $397.92 per year for the first child, with this figure scaling up to $486 per child if the family has four or more kids.
  • The MBNS pays $60 per month to low-income families of children under the age of one.
Northwest Territories
  • Northwest Territories Child Benefit (NTCB)
  • The NTCB pays up to $814.92 annually for families with one child under the age of six based on income. This figure scales up to $2,445 for families with four children, with an extra $366.96 for each additional child.
  • For children aged six to 17, the benefit decreases to $651.96 for the first child, $1,956 for four children, and $292.92 for each additional child.
Nova Scotia
  • Nova Scotia Child Benefit (NSCB)
  • The NSCB pays up to $624.96 per year to low-income families with one child, to a maximum of $900 per child per year to families with three or more children.
Nunavut
  • Nunavut Child Benefit (NUCB)
  • The NUCB entitles qualifying families to $330 per child per year.
  • Working families may also qualify for a territorial workers’ supplement, which pays $274.92 per year to one-child families and $349.92 to families with two of more children.
Ontario
  • Ontario Child Benefit (OCB)
  • The OCB pays up to $1402.92 per child per year to qualifying families.
Prince Edward Island N/A N/A
Yukon
  • Yukon Child Benefit (YCB)
  • The YCB pays up to $819.96 per child per year.

In combination with your federal benefits, these provincial baby bonuses may also qualify you for cash loans.

How do I apply for a cash loan using my baby bonus, and what lending options are available to me?

There are many lenders out there to choose from for consumers in need of an infusion of cash. Traditional lenders, such as banks, will factor baby bonuses into your income as they assess your qualifications, but in most cases, it is unlikely that you will be granted a significant loan based on a regular CCB benefit alone. Bigger loans require strong credit. In addition, traditional lending arrangements can frequently lock clients into long-term debt. These loans are best pursued for larger investments, such as securing financing for a new home or car.

Payday loans by contrast provide immediate short-term cash loans, which can be handy for young families trying to make ends meet. However, payday loan companies have earned a dubious reputation due to the laundry list of qualifications they often require of applicants and the high interest rates that they charge.

At Magical Credit, we simplify the process for applicants seeking cash loans based on the income provided by government subsidies like the CCB. As long as you meet the following guidelines, Magical Credit can help you get a Child Benefit loan:

  • You have a fixed monthly income.
  • Said fixed monthly income is directly deposited into your account.
  • You are not currently defaulting on any Payday Loans that they you may have.

We provide loans ranging between $500 and $20,000 depending upon your current income, with repayment terms of 6 to 24 months.

Providing for your young family

At its core, the Canada Child Benefit is about opportunity, giving every kid as equal a chance as possible at growing up with food on the table, secure shelter and activities that help their imaginations grow. It is a plank parents can build upon as they work on crafting a stable financial future for their little ones.

At Magical Credit, we believe no family should be denied access to the short-term financing it needs to navigate life’s unexpected ups and downs. We believe that those with a steady source of income, be it from work or government subsidies, should be able to apply for and receive small loans just like everyone else. When you ultimately repay your Magical Credit loan, you’ll have taken a significant step towards rebuilding your credit, which will help you down the line when it comes to buying a home or thinking about your children’s education.

Contact us today to discuss how we can help you move forward.

Our loans are considered short-term loans and have up to a 6-60 month term with an interest rate ranging from 3.4%-20% per month.

Example: $1,500 borrowed for one year at 3.4% per month. Monthly payments are $199.05. Total payback with interest and fee of $194.00 is $2,388.54.

NOTE: You can pay off your loan at any time with no penalty. You will only pay interest up to the date you pay it off.

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