Parents of those children who qualify for the Disability Tax Credit (DTC) are entitled to a monthly supplement to their Canada Child Tax Benefit (CCTB). This supplement is called the Child Disability Benefit (CDB).
The Child Disability Benefit was introduced in July 2003. It is calculated based on the parents’ net incomes for the previous tax year, the number of children in the family, the number of children with disabilities, and a couple of other factors.
The Canada Child Tax Benefit (CCTB)
The Canada Child Tax Benefit is usually paid to the mother in a two-parent family. Single parents (mothers and fathers) receive CCTB on behalf of their children as well. In cases where there are divorces or separations, the CCTB and its supplements can be shared on a rotation basis every six months. There may also be complex situations, where another individual in an extended family, such as a grandmother, may take care of the child while a parent may be incapacitated. In this case, that individual would receive the CCTB instead of the parent.
A History of Federal Child Benefits
- 1918 – Child Tax Exemption: This exemption provided income tax savings that increased as taxable income increased. It did not provide benefits to families that did not have a tax liability.
- 1945 – Family Allowance: This benefit was provided to all Canadian families with dependent children.
- 1973 – The Family Allowance benefits were tripled, indexed to the cost of living, and made taxable.
- 1978 – Refundable Child Tax Credit: This targeted and income-tested child benefit, which was delivered through the tax system, provided a maximum benefit to low-income families, a declining amount to middle-income families, and no benefit to upper-income families.
- 1993 – Child Tax Benefit (CTB): This benefit consolidated refundable and non-refundable child tax credits and the Family Allowance into a monthly payment based on the number of children and level of family income. It also included the Working Income Supplement (WIS), which provided an additional benefit to low-income working families with children. In 1993, federal expenditures on child benefits, including WIS, totalled $5.1 billion.
- 1998 – The CTB was replaced by the Canada Child Tax Benefit (CCTB). The National Child Benefit (NCB) Supplement replaced the WIS, and is provided to all low-income families as part of the new CCTB.
- 2003 – The Child Disability Benefit (CDB) was introduced.
- 2006 – The Government of Canada introduced the Universal Child Care Benefit (UCCB). All families, including low-income families, are receiving $100 a month for each child under the age of six, taxable in the hands of the lower-income spouse.
- 2007 – Budget 2007 announced a new Child Tax Credit, which provides additional tax relief for families with children. For 2007, this tax credit provides up to $306 in tax savings for each child under the age of 18.
Qualification for the Child Disability Benefit (CDB)
To qualify for the Child Disability Benefit, a child must qualify for the Disability Tax Credit. The child’s doctor or related practitioner would have to certify that the child is markedly restricted by his or her disability compared to another child of similar age. For example, a 2-month old child would not be considered markedly restricted in speaking, because most, if not all, 2 month olds are not expected to speak language clearly as to be understood by another person.
In conclusion, the Child Disability Benefit helps parents and caregivers of disabled children with the additional day-to-day costs of raising that child. Because it is inversely proportional to income, it will help those with low to middle incomes, unlike a non-refundable tax credit, which would help those with middle to higher incomes.