Child care benefit eaten by rising daycare costs

[kumazatheef]

(This could arguably go in Canada forum, but focuses on BC)

http://bc.ctvnews.ca/child-care-benefit ... -1.2174465

B.C. parents hoping for a boost from the $60 increase in the federal Universal Child Care Benefit may find themselves squeezed anyway by rising daycare costs.

The majority of the benefit increase may already be eaten up by increases in fees by some daycares, said family policy researcher Lynell Anderson.

“Parents absolutely are squeezed,” said Anderson.

Daycare fees are rising at faster than the cost of inflation, Anderson added, and she expects rising fees across the province to catch up with the increased benefit within a year and a half.

The Universal Child Care Benefit was introduced by the Conservative government in 2006, and is given as a cheque to every parent with a child under six years old.

But while child care fees increased each year, the benefit did not, leaving parents further behind. In the runup to a 2015 election the Conservatives announced they would raise the benefit to $160 a month.

But a review of some day cares by CTV News shows that some have increased their fees even as the benefit rose.
Brightpath, which operates a network of day cares across the country including seven in B.C., said it increased its monthly fees between two and four per cent. In its Coquitlam centre, monthly fees rose from $1,175 to $1,215 for kids under three, and $815 to $850 for kids between three and five.

But the company said the increase had nothing to do with the increased UCCB.
“Most industry providers increase their rates on a yearly basis,” said Juliana Jay, Brightpath’s director of marketing. She said the increase would largely go to paying for increased transportation costs, wage increases, and other costs of doing business.
Employment and Social Development Canada issued an emailed statement to CTV News saying, "The Government of Canada does not regulate the fees charged by child care providers."

A Canadian Centre for Policy Alternatives report found that the median price of Vancouver infant day care is $1,215 per month, and about $870 a month for toddlers. The cost adds up to about 29 per cent of a Vancouver woman's income, the report says.
Anderson says parents would be better served by a national day care plan similar to what is available in Quebec, where parents pay $7.30 a day for full-time care, or about $150 a month.

B.C. advocates have been pushing for a $10 a day daycare, while a $15 a day plan is part of the federal NDP’s platform.
Anderson said such plans would make it easier for parents to stay in the workforce paying taxes -- one immediate financial benefit that would help the government pay for such a program.

“The benefits extend to employers, who have less stressed workers, communities who have good supports in place and the benefits extend to the economy overall,” Anderson said

So Government tries to help out, but business counters ... you sneaky business, you.

[bob vernon]

Plus this benefit is TAXABLE INCOME. It is never a big as advertised.

[Veovis]

The article could easily be written with the title "Rising Child Care costs eased by increase in child care supplement"

The fact that child care costs are tax deductible means no actual taxes are paid on that money if used for actual day care costs. Even so after tax it is still more money in your pocket that you had at the start of the day so I don't understand what the complaint is about other than just to complain.

[kumazatheef]

Plus this benefit is TAXABLE INCOME. It is never a big as advertised.

True, fair enough. Some will get whole benefit, and others could see up to 60% of it (assuming maxing out at ~40% sliding rate).

The article could easily be written with the title "Rising Child Care costs eased by increase in child care supplement"

Valid point. So, kind of a "chicken and the egg" scenario: are daycares raising rates because they know parents get more money ... or did the government anticipate the raise thus dolling out more to compensate?

The fact that child care costs are tax deductible means no actual taxes are paid on that money if used for actual day care costs. Even so after tax it is still more money in your pocket that you had at the start of the day so I don't understand what the complaint is about other than just to complain.

This is Castanet, there's no room for math and logical view points ;)

I don't have kids in day care (yet!), but still ... whatever extra money that comes in (even after income tax) is appreciated and will most likely go right to kids' RESP anyway ... where I can get that extra 20% back from CESG too, so at the end of the day, mo money.

[johnp3]

We had two boys, It was our decision to have the wife stay home till the children were full time in school. we got child payments from the feds, very little. We never got other child care payments, yes it cost us a lot, that is not why you have children.

[kgcayenne]

Here is an interesting change. Now, on the TD1 federal form for employment source deductions, one can no longer claim for children (unless infirm). People with dependent children will now pay more Federal income tax. Although they will receive additional monthly funds, I doubt that it will cancel out the higher taxes.

http://www.cra-arc.gc.ca/E/pbg/tf/td1/td1-15e.pdf

[GordonH]

Remember only 2 certainties in life... death & taxes.

[WhenWhatWho]

Here is an interesting change. Now, on the TD1 federal form for employment source deductions, one can no longer claim for children (unless infirm). People with dependent children will now pay more Federal income tax. Although they will receive additional monthly funds, I doubt that it will cancel out the higher taxes.

http://www.cra-arc.gc.ca/E/pbg/tf/td1/td1-15e.pdf

As it should be. I don't get any special tax breaks for not having kids. Get rid of the subsidises and tax breaks and level the playing field for everyone.

[Glacier]

Here is an interesting change. Now, on the TD1 federal form for employment source deductions, one can no longer claim for children (unless infirm). People with dependent children will now pay more Federal income tax. Although they will receive additional monthly funds, I doubt that it will cancel out the higher taxes.

http://www.cra-arc.gc.ca/E/pbg/tf/td1/td1-15e.pdf

Very interesting.... and there goes the money I would have saved by income splitting!

And WhenWhatWho, the playing field is never leveled, nor should it be. That's why we as a society give tax breaks to lower income folks. It's called a progressive tax structure. Do you support eliminating the child care benefit all together? How about the tax credits for health care expenses, charity donations, etc.? Why do I get the impression that you're good with this elimination, not because you agree with it per se, but because of who eliminated it?

[kgcayenne]

Velly intelessing.

[MoparPrincess]

? Section 8, amount for an eligible dependent. You can still claim your children

[kgcayenne]

Yes, provided you do not have a spouse.

"8. Amount for an eligible dependant – If you do not have a spouse or common-law partner..."

[WhenWhatWho]

http://www.cra-arc.gc.ca/E/pbg/tf/td1/td1-15e.pdf

Very interesting.... and there goes the money I would have saved by income splitting!

And WhenWhatWho, the playing field is never leveled, nor should it be. Really? Why? I'm waiting for your explaination on this comment.That's why we as a society give tax breaks to lower income folks. It's called a progressive tax structure. Do you support eliminating the child care benefit all together? How about the tax credits for health care expenses, charity donations, etc.? Yup, every single one. Why do I get the impression that you're good with this elimination, not because you agree with it per se, but because of who eliminated it?[/quote]

Uh??? *bleep* are you talking about? Get rid of all personal tax breaks.

[kgcayenne]

Our children are our future. Some day, one of our children might be looking after you when you are too infirm to care for your own needs. If it's my daughter, she'll treat you with dignity. Why? Because I was able to benefit from tax breaks, study grants, and daycare subsidies in order to get my *bleep* into a better paying job so that she was able to grow up and learn in an environment that was comfortable and loving.

Then again you may wind up sitting in your own waste because a less loving person who has nothing but adversity and harm growing up is assigned to you and sick and tired of the BS and is out for the tenth smoke of the night.