The incredible shrinking $1,200 child care allowance : Increadible shrinking twelve hundren dollar child care allowance

What’s Wrong with the Child Care Allowance This analysis of the Child Care Allowance is based on the little information that has been made public to date about the design of the initiative:. [...] About the only situation we can conceive in which a family would keep the full $1,200 Child Care Allowance would be the rare and likely purely theoretical instance in which a family with very low employment income does use the child care expense deduction (this tax break is claimed by the lower-income parent in the case of couples or by the single parent), does not receive the young child suppleme [...] Despite its name, the Allowance is not a child care program in the usual sense of that term, because it is not designated for child care uses – unlike the child care expense deduction in the income tax system, which reduces federal and provincial/territorial income taxes for families in which the claiming parent incurs child care expenses to work or study, and unlike child care subsidies for low-i [...] The reason that the Child Care Allowance favours one-earner couples is that the benefit will be taxable in the hands of the lower-income spouse, who in the case of one-earner couples has no income and thus pays no federal or provincial/territorial income tax on the Allowance. [...] Caledon Institute of Social Policy The drawback to this option is that it departs radically from the current philosophy of income-tested child benefits, in which the poor get the most and the well-off the least.