No Canada Child Tax Benefits for us

I was just reading Four Pillar's post on the Canada Child Tax Benefit (CCTB) available to families with children. I had presumed we would be getting something, but I read that you must have a combined family net income of $102,000, and I suddenly realized then that we were above that. I went to the government's calculator though and checked it out for myself, and yes we don't qualify because our net income was $114,000 or so last year.

I have mixed feelings about this. I can see why we wouldn't qualify with a higher income. I reached my salary goal last year where I wanted to earn around $70k a year. I set this goal when I became self employed because I felt the salaries being offered to me as an employee (in the consulting world) did not match the salary I would be making working for government, industry, or perhaps academia (although this may not be true depending on the position). As someone with an MSc I was making around $50k a year before returning to school, and I believed that my added years of experience AND 4 years of school to get a PHD qualified me for a salary somewhere around $65-70k. I was getting offers which ranged from $55k-60k, and less respect, responsibility, and freedom than I wanted to so I headed out on my own.

Mr W made less last year than he usually does because he too started in the self-employment world, moving away from his welding career which could bring in up to $60k a year for him depending on the work picture and his willingness to work in Alberta for extended periods of time. Yet he still had a net income of $44k.

So yes, on paper we are well off. But here is where it is not so straightforward.
1. We have a lot of debt (our fault yes), partly because of school, and in order to manage that debt we have to be careful, and make sure to budget wisely. In order to take time off work, it was crucial that we eliminate at least $20k in debt by June so that our monthly debt payments were lower ($1400/month vs $2200/month).
2. Neither one of us qualifies for EI maternity or parental leave because we are self-employed, and thus have had to SAVE money (from that net income!) in order to take this time out to have a child. You can effectively reduce our net income by at least $20k as savings for this year, which would drop our net income into the acceptable range where we would qualify for the CCTB. The only way I could have used this to my advantage would have been to put the money in an RRSP and then withdraw the money this year as needed, thus getting last year's tax benefits but paying the tax this year. Too much hassle.

I wasn't counting on the money from the government, don't get me wrong, and truly I don't think I am surprised that we don't qualify. Mainly because the whole EI debacle has already highlighted for me the gap in government policy when it comes to self-employment and women in this country (except Quebec).

2 Comments:

  1. MG (moneygardener) said...
    Don't lose all hope. My son was born on January 16, 2008 and the government evaluated us on 2006 income instead of 2007.
    Four Pillars said...
    Making "too" much money is never a bad thing!

    Mike

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