Residents receiving increased Universal Child Care Benefit (UCCB) payments from the federal government won’t have to claim that money as income under the NWT Income Assistance program, Premier Bob McLeod said last week.
The federal government announced last Monday that it will be expanding the UCCB to include a new benefit for children aged six through 17 and increasing the benefit amount for children under the age of six, to be paid retroactively starting Jan. 1, 2015.
The increase will give families $160 per month for each child under six, up from $100, and $60 per month for every child between six and 17. The UCCB is expected to be doled out over the next several weeks to those who have registered.
But while the increase in UCCB is “welcome,” McLeod said the NWT government needs to be flexible in ensuring it helps out the families that need it most.
“There are implications for Northwest Territories residents currently on income assistance,” he said on Friday. “Without a change in approach, these retroactive UCCB payments would reduce the amount of income assistance clients will receive from the Income Assistance program, as the UCCB is considered income.”
The GNWT introduced a $1,200 unearned income exemption for its Income Assistance program in September 2007 in order to allow clients to keep some of their income from sources like GST tax credits, income tax refunds and gifts.
McLeod said the new UCCB payments will be included in the exemption in order to ensure families accessing Income Assistance will benefit from the UCCB payment in the same way as other NWT residents with children.
“Helping our residents live strong and independent lives is one of the goals of the 17th Assembly. To do that, we must be prepared to be innovative and flexible with our programs and services,” McLeod said.
Benefit receives mixed reaction
The announcement of new funding for families with children has received a mixed reaction from Canadians.
While some see more money as an obvious benefit to households, many are calling it a blatant attempt at vote buying and say much more needs to be done to alleviate poverty and support families.
Karri Munn-Venn, a policy analyst at Citizens for Public Justice, said money sent to families does not change the fact that most families cannot access childcare in Canada.
“Currently there are only enough regulated childcare spaces in Canada for 20 per cent of young children, though 70 per cent of the mothers of these children work,” she wrote last week. “This small deposit doesn’t offset lost income for those parents who stay at home, nor does it come close to meaningfully supplementing childcare costs, which begin at $900/month for full-time care for one child.”
The new UCCB is a taxable benefit, which will result in an estimated $340 million in taxes clawed back to the federal government. Previously families were given an annual child tax credit of over $300 per child. Under the new benefit, families will receive $1,900 annually for kids under six, or $720 per year for kids aged six to 17, regardless of their income.
“The original UCCB has diverted significant resources away from low-income families to upper-income families, and the recent changes accentuate this redistribution further,” Munn-Venn said.
She recommends a national anti-poverty plan that includes universal childcare, and additional supports for low-income families, starting with increasing the National Child Benefit up to $5,600.
“Significant funding for both of these family policies could be made available by redirecting resources currently provided to income support programs that do not sufficiently benefit low-income families with children, including the Universal Child Care Benefit,” she said.