Valley First

Think twice about splurging Universal Child Care Benefit

July 23, 2015

PENTICTON, B.C. — Thousands of parents across B.C. have started seeing a boon to their bank accounts. On July 20, the federal government started depositing or mailing out expanded universal child care benefit (UCCB) program payments to households across Canada.

Following program enhancements, families with children aged five and under will now receive $160 per child, an additional $60 per child per month. The program has also been expanded to include children aged six to 17, providing $60 per child in that age range, something that the old system did not do. Payments are retroactive to Jan. 1, 2015, which means parents could see a lot of extra cash in their pockets. They can expect $1,920 by the end of the year for children under age six and a one-time retroactive payment of $420 (from January to July) this week alone. For children aged six to 17, they will receive $720 for the year.

While the intention of the payments is to help families manage costs related to raising children, local financial expert Paul Brodeur cautions parents about spending the windfall instead of saving it.

“There are a lot of pressures on parents right now and I trust they will use this extra money where they most need it,” says Brodeur, vice-president of wealth management at First West Credit Union’s Valley First division. “But they should be aware this is a taxable benefit and they may be bitten at tax time if they’re not stashing at least a part of each cheque into a registered savings product, ideally the registered education savings plan.”

What’s more, the UCCB isn’t the only source of free money the government is offering parents right now. In addition to the UCCB, $500 is available through the Canada Learning Bond, $1,200 as part of the B.C. Training and Education Savings Program, and up to $500 in savings incentives with the Canada Education Savings Grant.

“With the various benefits, savings and incentives plans, parents have the opportunity to add some significant cash to their children’s RESPs,” Brodeur says. “But it can be confusing navigating all the various funds and grants and that’s where your financial advisor can help.”

About Valley First

Valley First is a premier provider of banking, investment and insurance services for residents and businesses in the Okanagan, Similkameen and Thompson valleys. As a division of First West Credit Union, B.C.'s third-largest credit union with 54 branches and 38 insurance offices throughout the province, Valley First brings innovative products, an extensive branch network and local decision making to the banking experience. For more information on Valley First, visit www.valleyfirst.com.

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