New child benefit could pose pitfalls for divorced couples: Tories

The Liberals' new $23-billion-a-year benefit will replace three different programs on July 1

Lisa Raitt. (Darryl Dick/CP)

Lisa Raitt. (Darryl Dick/CP)

OTTAWA – The Liberal government’s new child benefit could clog courts with divorced couples fighting over how much one spouse must pay in child support when the potentially lucrative payments start landing in just over one month, says Opposition finance critic Lisa Raitt.

The Liberals’ new $23-billion-a-year benefit will replace three different programs on July 1 with one income-tested payment to families each month.

Unlike with the benefits being replaced — the universal child care benefit and the Canada child tax benefit —the government’s budget and associated legislation doesn’t give guidance about how divorced parents can split tax deductions, or calculations of spousal support payments.

Raitt said the problem could affect some 1.2 million Canadians.

“Obviously they’re going to have a point of view on whether or not they should be paying more or less child support and instead of clogging up the courts, this government owes (it to) them to give them some direction,” Raitt said in a telephone interview.

“It’s going to affect anybody’s separation agreements, it’s going to affect anyone’s child support orders and there’s silence on it (from the government). I don’t think they’ve figured it out yet.”

The new child benefit will replace the monthly universal child care benefit with an income-tested payment that will start at $6,400 a year for a child five and under, and $5,400 a year for children six to 17. Only those families earning less than $30,000 a year will receive the full amount; the government will reduce payments as incomes rise.

The government has been negotiating agreements with provinces to ensure the new benefit wouldn’t adversely affect those receiving provincial social assistance. Those subsidies are income tested, meaning the more a family earns, the less they receive in subsidies.

The government says the new benefit should lift 300,000 children out of poverty in its first year, and provide more money to nine out of 10 families.

Critics still have questions about whether the new child benefit will have the same dampening effect on maternal employment rates that the universal child care benefit had as women opt to stay home so as not to earn too much money and lose out on their benefit or on their taxes.

“Officials have said there hasn’t been a lot of analysis done on certain measures that the government has implemented,” Raitt said.

“Every time you make one change there is ripple effects across either the economy or the social cohesion in the country and we just want to know how much work the Liberals did around it.”

The issue is expected to be a central fixture of questioning Monday when opposition MPs get three different chances to grill Finance Minister Bill Morneau about his first budget, and government spending documents. First he will face the daily question period, then go to the Commons’ finance committee, and finally face the House of Commons as a whole in the evening for a detailed grilling in committee-of-the-whole.

The focus is a departure from the months-long war of words over whether the Tories left the Liberals with a surplus and how the government intends to balance the budget at some point in the future.

The Finance Department said last week that preliminary estimates show a deficit of $2 billion for the fiscal year ending March 31, not including year-end adjustments and a $3.7-billion commitment to benefits for veterans. The Liberals argue the numbers support their view that the Tories left the books in the red; the Tories say the Liberals squandered the surplus left behind.

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