03 May 2011

CRA to Change Sharing of Child Benefits

Effective 1 July 2011, the Canada Revenue Agency will be changing its method for allocating the Canada Child Tax Benefit between separated parents who share their children's time equally or near-equally.

At present, when the CRA learns that separated parents have shared custody it rotates the child-related benefits and credits between the parties, such as the CCTB, the National Child Benefit Supplement, and the Universal Child Care Benefit, on a six-month on/six-month off basis. That's fair where both parents have about the same income, however, since the CCTB and the NCBS are indexed to income, it can be unfair where one parent would parent would get a lot of money out of the benefits and the other would get nothing.

Under the new rule, when when parents have shared custody the CRA will pay to each parent one-half of the benefits that parent would be entitled to receive if that parent were the only person entitled to the benefits. This will end the six month rotation of eligibility and will index the amount paid to only the income of the recipient.

The new rules will apply to:
For more information, see the Child and Family Benefits page of the CRA's website, or call 800-387-1193.