Social benefits for grandparents

As this calculation is done automatically by CCRA (formerly Revenue Canada), many Canadians miss out on understanding exactly how they can maximize these generous monthly payments. Here are the important facts:

  • The first thing you need to know is that both spouses must file a tax return.

  • The amount of your July 2001 CCTB will be based on your net family income shown on the 2000 tax return. To reduce that income (hopefully below the $32,000 clawback threshhold), try to maximize RRSP contributions before February 28, 2001 or look to diversify investment income sources to stay within the lowest tax bracket.

  • Changes in family structure—death or divorce of spouse, for example—should be reported to CCRA immediately. Family net income will be adjusted to take into account only one person’s income and therefore could increase the monthly benefits

  • Investment of the CCTB benefits into an account in the child’s name will enable you to report resulting investment earnings in the child’s hands. This would mean no taxes if the child’s income is under the level of the Basic Personal Amount.

  • Parents or grandparents w do not have extra money to invest in an RESP (Registered Education Savings Plan) may wish to contribute the CCTB received from the government in order to receive the Canada Education Savings Grant of up to $400. This is a great way to save for your child’s education with capital provided entirely by the government.

  • To learn more from The Jacks Institute, call us at 1-800-30-JACKS or link to our website now.