Overhaul the UCCB-quickly
Lynne Bell
Supporting Canadian children who need help most is an idea few citizens in this country will dispute. However, the Universal Child Care Benefit (UCCB) is not the best way to assist these families, as the program's universality-which sounds fair-actually dilutes its effectiveness.
Kelly has made a compelling argument for reworking the UCCB in favour of- among other things-better childcare, which I agree with wholeheartedly-and won't rehash here.
Families across the country have already received UCCB contributions of $160 per month for every child under the age of six and the $60 per month for every child for every child between the ages of six and 17, backdated to January. This mini-windfall is, I suspect not unwelcome in most homes, but is it strictly necessary? Is the estimated $5 billion the program will cost between now and next spring the best way to help families in Canada who really need a hand up?
I suspect not. Already there are indications that the money may have (in my opinion) been better used in a more deliberate, targeted fashion to really make a difference in the lives of families who would most benefit from the billions budgeted. Instead, the impact of a massive amount of taxpayers' cash is weakened in the interests of universality.
The argument is obvious and whether you agree or disagree, the math is simple. That monthly windfall will mean a great deal more to a low-income family, than higher-income families. And those same higher-income families will see a clawback at tax time-and maybe an economic disadvantage-as the child tax credit is eliminated.
Liberal leader Justin Trudeau (who is decidedly not economically disadvantaged) has stated that he will donate his family's UCC benefits to a charity in his riding. While this is an admirable action, there is certainly no guarantee that Trudeau's-and other families like his-charitable contributions will directly (and with dignity) aid Canadian families who could really use economic assistance.
Leader of the federal New Democratic Party, Thomas Mulcair has gone further, seemingly urging his party's supporters to donate the cash to the party's coffers. In a recent fundraising email, the party uses what it calls an “inspiring story” of Ella, a financially secure single mom who intends to donate her UCCB cash to the NDP. In the email Ella states calls the UCCB “a dirty little attempt to buy my vote,” stating: “Fortunately, I am a well-educated, financially-secure single mom and cashing this cheque (or not) will not materially affect my daughter's opportunities.”
Deputy Liberal leader and Saskatchewan native Ralph Goodale said of the NDP's email blast, “You're turning a social program into a political milk cow and that is very offensive.”
Whatever one's political leanings, it is clear that the focus on the UCCB is rapidly veering away from helping those who need it most.
Canadians-no matter what political party they support-can do better for our youngest citizens. The UCCB needs an overhaul-and quickly.
Universal Child Care Benefit: was the change worth it?
By Kelly Running
This week we’re Lynne and I are looking at the new monthly Universal Child Care Benefit (UCCB).
The benefit has been promoted as allotting nearly $2,000 annually for any child under the age of six and approximately $720 for any youth aged six to 17.
The government has made this a universal credit, meaning that all families, no matter their economic stature will receive the money.
While Lynne has been tasked with arguing the amount should only be given to those in need of it, I’ve been given the task of defending its universality, however, after reading more literature on the UCCB, I don’t think it should be defended, it should be reworked.
The UCCB is straight income support. Perhaps some families are in need of this, but an underlying issue for many is childcare. According to the Huffington Post there are only enough regulated childcare spaces across Canada for 20 percent of young children, while 70 percent of mothers work outside the home. Would it be better to put the money towards finding a solution to this issue?
Families receiving the money actually don’t have to put it towards childcare. The parent who receives the money from the government is in charge of how the money is spent and it’s up to the parent to say how the money is best spent.
The small deposit each month actually doesn’t offset this lost income if a parent has to stay at home, while childcare itself can cost an overwhelming amount. Perhaps the government should take the money it is splitting between families and use it to create more affordable childcare, while introducing a tax break instead to those with young children.
While looking further into the UCCB it would appear that the amount received by the government is all taxable, meaning families are actually going to be paying tax back to the government on it because the child tax credit has been eliminated.
So, there’s a chance to receive more through the UCCB or potentially receive less than what it once was depending on a family’s circumstances.
It is also possible that if you’re sitting at the maximum under one tax bracket that the taxable money could potentially put the individual up into the next one or push them above the threshold for benefits such as subsidized housing or child-care subsidies.
However, because this is what the government has decided to do, it’s a good idea to look into ways to invest the money to avoid the latter. By placing the money in a Registered Education Savings Plan, Tax Free Savings Account, or by putting it into childcare and claiming the amounts ($8,000 for children under six and $5,000 for youth seven to 16) you can save in the end. It’s also recommended that you avoid using the money to pay debts because it is taxable.
So, I’m not sure if the government really chose the best way to help families by introducing the UCCB. With an election coming up was it a way to buy votes or did the government think they were helping, but didn’t actually think things through?
