Finding financial relief for families raising children
In Canada, the average cost of raising a child to age 18 is $243,6601! With a bit of financial family planning, you can take advantage of tax-efficient strategies and other programs that will reduce your child-raising costs and provide additional financial support when you need it.
Take full advantage of tax deductions, credits and benefits. There are certain eligibility conditions that must be met, but look carefully at these tax-efficient and income opportunities:
- Child care expense deduction: For a child not claiming the disability tax credit, the maximum child care expense amount is $7,000 for each child under seven at the end of the year.
- Eligible dependant tax credit: Can be claimed by an unmarried person not living in a common-law partnership and a person who is married or in a common-law partnership but not supported by their partner. The amount of the credit is reduced by income earned by the dependant.
- Children’s fitness and arts tax credits: Allow you to claim up to $500 per child for prescribed programs of physical activity and artistic, cultural, recreational or developmental activity.
- Canada child tax benefit: A non-taxable amount paid monthly to eligible families to offset the costs of raising children under 18. You must apply for this benefit.
- Universal child benefit: A taxable $100 monthly benefit to families for each child under six. You must apply for this benefit unless you already receive the Canada child tax benefit.
- Maternity/paternity Employment Insurance (EI) benefits: Maternity/parental leave of approximately 55% of average insurable weekly earnings to a yearly maximum of $47,400. The benefit spans 52 weeks but can be divided between both parents.
Raising children can be expensive. To do so as economically as possible and to realize all your other financial dreams, talk to your professional advisor.
October 20, 2015
1 “The Real Cost of Raising Kids” by Camilla Cornell, www.moneysense.ca August 2011
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.