Ontario to provide parents with new round of support payments

The Ontario government announced additional support for parents in its 2021 budget on Wednesday.

The province is proposing another round of direct payments through the Ontario Covid-19 Child Benefit program, as well as a temporary 20% top-up to the Childcare Access and Relief from Expenses (CARE) tax credit for 2021.

Under the extended Covid-19 child benefit plan, the government will automatically provide a third round of payments to parents who received Support for Learners payments. Eligible parents will receive $400 for each child aged 0 to Grade 12, and $500 for children 21 years and younger with special needs. Parents who had not applied for previous payments will be able to apply for the third round of payments.

The government said support provided through the Ontario Covid-19 Child Benefit would total $1.8 billion with the third round of payments.

To support parents with the cost of child care, the province also proposed a one-time top-up for the CARE tax credit equal to 20% of parents’ 2021 credit entitlement, which would be delivered when they file their 2021 income tax return. The government estimates the 20% enhancement would increase 2021 support from the CARE tax credit for 300,000 recipients from about $1,250 to $1,500 on average.

Introduced in 2019, the CARE tax credit provides families with child care support of up 75% of their eligible child care expenses. The CARE tax credit is provided in addition to the child care expenses deduction and focuses on lower- and moderate-income families.

Total support provided by the one-time top up to the CARE tax credit would be about $75 million, the government said.

“The additional costs of virtual learning, reduced access to after school programs and child care, barriers to getting back to the workplace, and the stress of the necessary public health restrictions means families need and deserve relief,” the government said in its budget plan.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.