Universal Child Care Benefits

May 14, 2007

On May 2, 2006, the federal government presented its budget to Canadians. One of the key announcements was the government's intention to create a Universal Child Care Benefit.

Part 6 of the Budget Implementation Act, 2006 c.4 created the Universal Child Care Benefit Act.

This Act provides for a monthly payment to Canadian families of $100 for each child under the age of 6 years. The first payments are to be issued in July 2006 to families registered under the Canada Child Tax Benefit. Income does not affect eligibility for the payments.

In order to clarify how these payments are to be treated in the insolvency context, the OSB sought the advice of the Department of Justice.

Section 5 of the Act stipulates that the benefit is not subject to the operation of any law relating to bankruptcy or insolvency. It cannot be assigned, charged, attached or given as security, nor can it be retained by way of deduction, set off, or in Quebec, as compensation under any Act of Parliament other than this Act. Furthermore, it is not garnishable for the purposes of the Family Orders and Agreements Enforcement Assistance Act.

The Child Care Benefit payments, therefore, are like the Child Tax Benefit, in that they 'cannot be assigned to a trustee in bankruptcy, and cheques for such benefits will be forwarded to the bankrupt, notwithstanding an agreement assigning them to a trustee in bankruptcy'. (Houlden and Morawetz, F§46.2) However, in accordance with Re Meier, (1997) 47 C.B.R.(3d) 85, these payments can be taken into account under section 68 of the BIA for the purposes of the surplus income calculation.

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