New Canadian residents always wonder how the Canada Child Benefit works. Residents of Canada are all subject to Canadian income tax. People pay taxes even on everyday grocery shopping. However, as long as you understand how Canada’s welfare system works, Canadian children can enjoy a lot of benefits as they grow up.
This article will discuss the most basic and accessible benefits of Canada’s welfare system. The most common one people may have heard of is the federal government’s tax-free monthly payment, the Canada Child Benefit (CCB) offered by the CRA. In addition, education in Canada is free for all students in the Canadian public school system. This also reduces the heavy burden of tuition fee on parents.
Through the Stream A immigration pathway, many Hong Kongers have recently decided to move to Canada. Hong Kong students have always had a high-pressure studying environment. There are also some government-funded tuition loan concessions that allow students to attend university without financial pressure.
In this article, we will introduce Canada’s welfare system to students who have just arrived in Canada.
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Parenting is Less Stressful Under Canada's Welfare System
Many people are concerned about the living expenses in Canada before immigrating. Although it is difficult to generalize the cost of living for all households, except for the rental cost, which is close to Hong Kong, other expenses such as daily consumption and transportation costs are slightly lower than Hong Kong. Some newcomers also bluntly expressed confidence in Canada’s welfare system that guarantees Canada child benefits.
Canada Child Benefit(CCB) Under the Canada Welfare System
Canada Child Benefit(CCB), known as “Milk Payment” in Hong Kong, is the most familiar Canada child benefit to Hong Kongers. It is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. Generally speaking, the application procedure is simple and easy to be approved. You can register online on the website or by mail, or through the birth registration.
Amount of Payment You May Get
The maximum Canada child benefit you could get is $6,765 per year (equivalent to nearly HKD 3,420 per month) for children under 6, and $5,708 per year (equivalent to nearly HKD 2,885 per month) for children aged 6 to 17.
Your Canada child benefit is based on your family income from the previous year, the number of children in your care, and the age of your children. However, your actual Canada Child Benefit will be calculated by the Canada Revenue Agency based on your adjusted family net income (AFNI) reported on your year tax returns.
Eligibility for Application
Registered Education Savings Plans (RESP)
A Registered Education Savings Plan (RESP) is a special savings account for parents or guardians who want to save for their child’s education after high school. Applicants can open an account as long as they go to a registry certified by the Canadian government. The registry includes banks, insurance companies and loan companies.
Generally, people are more confident when dealing directly with banks. However, other companies may offer favourable terms. Please read the terms and conditions carefully before applying and whether the handling fee will be hidden.
As addressed on the official website of Registered Education Savings Plans (RESP), anyone can open an RESP account for a child—parents, guardians, grandparents, other relatives or friends. While you can open a plan for a child, you can also name yourself or another adult as the beneficiary. An RESP allows adults to earn interest on their RESP tax-free.
The lifetime contribution limit is $50,000, while there is no annual contribution limit. All eligible RESPs are eligible for the Canada Education Savings Grant (CESG) of up to $500 per year, with the contributions of $2,500. In addition, the money that the investment earns while it is in the RESP will not be taxed until the money is taken out to pay for your child’s education. However, in the occurrence of an over-contribution, a monthly tax of 1% is required.
Tuition-Free Canadian Public School System for Canada Child
The Canadian public school system is roughly the same as that of Hong Kong. Canada offers 12 years of free education from grades 1 to 12, covering all elementary or primary, secondary or high school. If parents are international students, their children may need to pay tuition fee as international students. However, Create Career College has a successful experience of helping students to enroll their children in tuition-free public school in Ontario. (Please check with our Admissions Department for details).
If you enter Canada with a valid study permit and attend a public institution, your child may be able to attend tuition-free public schools. If you attend a private institution, your child’s situation depends on the province. If you are not able to meet the above requirements and you are not a Canadian permanent resident, your child’s tuition fee will be between $12,000 and $17,000. And kindergartens are charged according to age. Price range from $179 to $1,934 per month.
In conclusion, various Canada benefits definitely help to ensure that residents living in Canada have nothing to worry about their basic living expenses.