Family Prosperity Plan benefits Canadians

Shared by John Barlow, MP for Macleod

The Conservative Government recently introduced The Family Prosperity Plan, a comprehensive benefit package which will impact approximately 4 million Canadian families.

The Family Prosperity Plan includes the Family Tax Cut, a federal tax credit allowing a higher-income spouse to transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. The credit will provide tax relief – capped at $2,000 – for couples with children under the age of 18, effective for the 2014 tax year. This tax cut has been commonly referred to as income splitting and it has been helping seniors across the country, which is why the Government is now proposing similar relief for families.

The plan also includes increasing the Universal Child Care Benefit (UCCB) for children under age six. As of Jan. 1, 2015, parents will receive a benefit of $160 per month for each child under the age of six – up from $100 per month. In a year, parents will receive up to $1,920 per child as well as expanding the UCCB to children aged six through 17. As of Jan. 1, 2015, under the expanded UCCB, parents will receive a benefit of $60 per month for children aged six through 17. In a year, parents will receive up to $720 per child.

In addition, the plan will also increases the Child Care Expense Deduction dollar limits by $1,000, effective for the 2015 tax year. The maximum amounts allowed to be claimed will increase to $8,000 from $7,000 for children under age seven, to $5,000 from $4,000 for children aged seven through and up to $11,000 from $10,000 for children who are eligible for the Disability Tax Credit.

These tax benefits will be available in 2015 as families can claim the Family Tax Cut next spring when they file their 2014 tax returns. As a result, they will begin to receive payments under the enhanced UCCB in July 2015. The July UCCB payment will include up to six months of benefits to cover the period from January through June 2015. The enhanced UCCB will replace the existing Child Tax Credit for the 2015 and subsequent taxation years.

Again, the new measures introduced by our government will help benefit 4 million Canadian families. The average tax relief and benefits for these families will be $1,140 in 2015. Low and middle-income families will receive two-thirds of the overall benefits provided by the package. The Family Tax Cut will bring fairness to the tax system as it will eliminate or significantly reduce the difference in the federal tax payable by a one-earner couple relative to a two-earner couple with a similar family income.

Finally, I am pleased to announce the government doubled the Children’s Fitness Tax Credit and made it refundable. The maximum amount of expenses that may be claimed under the credit is now $1,000 for the 2014 tax year and subsequent tax years, and the credit will be made refundable effective for the 2015 and subsequent tax years.

Previous tax-relief measures introduced by the Government since 2006 have resulted in a tax reduction of approximately $3,400 in 2014 for an average two-earner family with two children.

For more information and other background information please see the following links: