NWT changes rules to make room for federal child care benefit

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The Government of the Northwest Territories is changing its rules on income support to accommodate the improved federal Universal Child Care Benefit.

The new child care benefit would, under the NWT’s usual rules, have counted as unearned income. That would see many families eligible for income assistance hit the territory’s $1,200 annual cap on unearned income and, subsequently, lose some of their income assistance payments.

Retroactive payments of new and increased child care benefits are set to begin in the coming weeks. Families are eligible to receive a new $160 monthly payment for each child aged under six, and an improved $60 monthly benefit for each child aged six to 17 – backdated to January 2015.

While all families with eligible children receive the payments, they would trigger a drop in income support for some low-income NWT families.

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“The increase to the Universal Child Care Benefit is welcome. However, there are implications for Northwest Territories residents currently on income assistance,” said Premier Bob McLeod in a territorial government statement on Friday.

“Without a change in approach, these retroactive payments would reduce the amount income assistance clients will receive from the Income Assistance program, as the child care benefit is considered income.”

The territorial government now says the federal government’s retroactive payment will be exempt from its unearned income policy.

“We must be prepared to be innovative and flexible with our programs and services,” added McLeod.

Federal employment minister Pierre Poilievre has termed the retroactive payment “Christmas in July” for Canadian families. The payments received in the coming weeks will total up to $520 for children aged under six, and up to $420 for every child six to 17.

But the benefit is taxable, so any family paying income tax will see some of it returned to the federal government in April.

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