Notice #702 –Canada Learning Bond (CLB) eligibility criteria amendments

Information bulletin

Number:

CESP/PCEE-2016/17-007-702

Date:

December 23, 2016

Subject:

Canada Learning Bond (CLB) eligibility criteria amendments

Previous notice

This information bulletin updates notice # 692 - Canada Learning Bond Eligibility.

Purpose

The purpose of this Information Bulletin is to advise that amendments to the Canada Education Savings Act (CESA) received Royal Assent on December 15, 2016. The amendments to the CLB eligibility criteria were required following the introduction of the Canada Child Benefit (CCB), which replaces among other benefits the National Child Benefit Supplement (NCBS). This Bulletin also seeks to provide additional information regarding the amended CLB eligibility criteria.

Amendments

The CESA was amended to:

• replace the term “child tax benefit” with “Canada child benefit”;
• eliminate the national child benefit supplement (NCBS) as an eligibility criterion for the CLB; and
• add an eligibility formula based on the adjusted net family income and the number of children.

The amendments come into force either retroactively to July 1, 2016, or as of July 1, 2017.

Specifically, the amendments by coming into force date are as follows:

July 1, 2016

• remove references to, and repeal the definition of, the NCBS, since no NCBS was paid beginning July 1, 2016;
• modify the definition of “primary caregiver” (PCG), to clarify that the PCG must be the individual eligible to receive the benefit (child tax benefit or the Canada child benefit), but does not actually have to be in receipt of the benefit; and
• amend the eligibility criteria for the CLB to extend the previous eligibility criteria for the 2016-17 benefit year (July 2016 to June 2017).

July 1, 2017

• repeal the definition of, and remove references in the Act to, “child tax benefit”, and replace it with the definition of, and references to, “Canada child benefit”;
• amend the eligibility criteria for the CLB for benefit years beginning July 1, 2017, to reflect the revised eligibility criteria without reference to the NCBS; and
• insert a formula to calculate CLB eligibility based on adjusted net family income and number of children for families with more than three children.

The amendments also seek to ensure that determination of eligibility for the CLB in regards to prior benefit years is made based on the eligibility requirements that were in place in that prior benefit year.

CLB eligibility formula

The CLB eligibility formula is similar to the eligibility model for the former NCBS. As such, beginning July 1, 2017, families with up to three children could be eligible for the CLB if their adjusted net family income is less than or equal to the lowest income tax threshold.

Families with more than three children could be eligible for the CLB if the adjusted net family income is less than the amount determined by the formula:

A + [(B + C + (D × E))/Y]

where

A is the amount determined by the formula

B is $2,341,

C is $2,071,

D is $1,970,

E is the number of qualified dependants in excess of two, and

Y is 0.333.

It is important to note that all dollar values included in the formula will be indexed annually, and the product of the indexation will be rounded to the nearest whole dollar value.

Determining eligibility for the CLB

The amendments do not impact the Interface Transaction Standards (ITS) as it pertains to promoters. Promoters will continue to submit CLB requests as per the usual method.

As well, the adjusted net family income used, in part, to determine eligibility, and the determination of whether an individual is the PCG for a beneficiary, will continue to be based on information provided to the CESP by the Canada Revenue Agency (CRA). Thus, in order to validate CLB eligibility, the PCG will need to apply for the Canada child benefit and been determined by the CRA to be the “eligible individual” (the CRA equivalent of PCG) for that child.

To facilitate the communication of the new eligibility requirements, the Canada Education Savings Program will provide promoters with information relating to adjusted net family income levels and number of children in a family, on an annual basis.

As such, for the 2017-18 benefit year, eligibility for the CLB will be based, in part, on the following:

It should be noted that larger families with higher adjusted net family incomes may also be eligible for the CLB. Information relating to CLB eligibility for larger families with higher adjusted net family incomes is available on request.

Contact us

If you have any questions regarding this information bulletin, please contact us by e-mail at cesp-pcee@hrsdc-rhdcc.gc.ca or call at 1-888-276-3624. Our hours of operation are from 8 am to 5 pm Eastern Time.