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Parents Can Expect a Cheque in the Mail Next Month

06/01/2015 12:18 EDT | Updated 06/01/2016 05:59 EDT

The Enhanced Universal Child Care Benefit takes effect in July 2015 and parents can expect a lump sum payment to start their summer

Last year, the federal government introduced changes to the existing Universal Child Care Benefit (UCCB) and parents will start to see the effects of the increase next month. By expanding the UCCB to include older kids, parents may miss out simply because they haven't filled out the right form.

Under the old rules, parents with children under the age of six received $100 a month to help with childcare. Though $1,200 a year is helpful when raising a child, the UCCB is taxable so the lower income parent is required to report the income on their tax return.

For families where one spouse does not work, you lose some of your spousal amount claim as a result of having to report the UCCB income. For single parents, the government decided after introducing the UCCB that they could have a child claim the income though it reduces the amount the parent can claim for the amount for eligible dependant.

Starting in July, the UCCB will be paid under the new rules. For children under six, parents will receive $160. For children six to 18, their parents will receive $60 per month. Again, this money is taxable and must be reported by the lower income earner.

Even though the enhanced UCCB actually took effect on January 1, 2015, the government decided to issue six months of payments all at once in July. For the cynical observer, it would seem to deliver sizable cheques to voters as the election season begins.

So if you have a child under the age of six, you will receive $360 for the first six months of the year and $160 for your July payment. This means a $520 cheque or direct deposit from the Canada Revenue Agency in July. For parents with a 10-year-old, they can expect $360 for the first six months of the year and $60 for July for a total payment of $420. It is a nice way to start your summer.

I was calculating the lump sum for my friend Christine, who has five children between the ages of 10 and 18. She will receive $2,100 thanks to the enhanced UCCB. It will make a difference for her family and she is already thinking about how she is going to use the money.

Unlike many other benefits, the UCCB is not tied to filing your tax return. So if you are still procrastinating on filing, it will not be a factor in receiving this credit. However, you must have applied for child benefits at some point. For many parents, you probably did this at the hospital when your child was born but it would be good to double check. If you did not, you will have to file Form RC66 Canada Child Benefits Application.

UCCB is also not tied to income. Some parents skip Form RC66 because their income is too high to qualify for the Canada Child Tax Benefit which is income-based. The UCCB is available for every child no matter what the household income may be. But without the form, you will not receive payments.

You can apply using the CRA's My Account option or by mailing in the form. It can take the CRA up to 80 calendar days to process a Form RC66 so if you are depending on your cheque in July and need to apply, you may be disappointed. But payments will be made retroactively so you will not miss out.

For parents, the enhanced UCCB will add a little to the bank account for the summer. But remember, the money is taxable. And when they increased the UCCB, the government eliminated the amount for children under 18 which was about $330 in tax savings per child when you filed your return. So while you can enjoy a little bit more every month, you may see some effect on your tax return when you file next year.

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