Revisiting the 2010 changes on child tax benefits for parents in shared custody situations

In the past, the legislation only allowed one parent to receive the child tax benefits each month.  In situations where the child’s parents were separated and the child resided almost equally with each parent, the Canada Revenue Agency developed a shared eligibility policy that recognized that there could be two eligible individuals for the same child.  

Under that new policy, in shared custody situations, the Canada Child Tax Benefit would be rotated between the two parents on a six-month basis. One parent would collect the benefit for 6 months and the other parent would collect the benefit for the next 6 months, on a rotated basis.

On March 4, 2010, the Minister of Finance Jim Flaherty announced that this policy would soon change.  To improve the allocation of child benefits between parents who share custody of a child, the new budget proposed to allow two eligible individuals to receive the Canada Child Tax Benefit, Universal Child Care Benefit and GST/HST Credit amounts for each child in a shared custody plan.  

The amount of the Canada Child Tax Benefit, Universal Child Care Benefit and GST/HST Credit payments would be equivalent to each eligible individual receiving one-half of the annual entitlement that they would receive if they were the sole eligible individual, paid in monthly instalments over the year. 

It was anticipated that this change will apply to benefits payable after July 1, 2011. 

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