Child Care Policies Joanne Abbawi Shabnam Dastyar Noushin Eskandari Jasmine Malachias Lev Osipian.

Child Care Policies

Joanne AbbawiShabnam Dastyar Noushin

EskandariJasmine

Malachias Lev Osipian

Child Care Expense Deduction

Objective- helps parents reduce their income tax associated with child care costs incurred while at work or in school.

What defines child care expense? caregivers providing child care services a day nursery school or day-care centre a day camp or day sports school a boarding school or camp an educational institution for the purpose of

providing child care services.

Eligibility Eligible child:

your or your spouse/common law partner’s child or a child who was dependent on you the child must have been under 16 years of age

at some time in the year. Eligible to claim CCED for the following

reasons: To earn income from employment Carry on a business Carry on research or similar work for which

you received a grant Go to school full-time or part-time

Benefits

For single and two-parent families, the deduction for child care expenses is limited to:

$7,000 for each child under 7 at the end of the year

$4,000 for each child over 7 and under 16 years old.

If entitled to claim a disability credit, deduction is $10,000 for a child under the age of 17.

Child Care Subsidies Objective - objective is to support the participation of

parents in employment or training by providing monthly payments paid to the child care provider that assist in meeting the costs of child care.

Payments are used to help pay for the following eligible types of care: Licensed

Group day care Family child care Preschool Out of School

License Not Required Family child care Registered family care In child's home Out of School

Eligibility May be eligible for a subsidy if you have

low/moderate income and you: working going to school or participating in a training

or rehabilitative program actively looking for work undergoing medical treatment would like your child to attend a licensed

preschool program, or have a child who requires extra support

Eligibility Parents must be:

Canadian Citizen, Permanent Resident of Canada or a Convention Refugee

Live in and have a child care provided in British Columbia

have a reason for child care which meets a social need provide proof of income to show financial eligibility select an eligible child care arrangement.

The net income level at which a 1-parent, 1-child family can get subsidy in BC is:

$30,984 for full subsidy $48,984 for partial subsidy

The net income level at which a 2-parent, 2-children family can get subsidy in BC is:

$35,016 for full subsidy $71,016 for partial subsidy

Benefits

Decision Making

Canadian Child Expense Deduction decision to enter labour force Decision on the number of hours worked

Child Care Subsidies- Choosing type of child care service

Cost and Quality of child care Amount of subsidy received from government

How much subsidy would you receive

Criticisms of Policies: CCED

CCED doesn’t really reduce the cost of child care, it only compensates a taxpayer for the cost of earning income.

CCED provides higher tax savings for those with higher income.$37,000 (tax rate 24%) tax savings = $1,708$80,000 (tax rate 40%) tax savings = $2,800

A limit of $7000/child under seven is not sufficient to cover the cost of licensed child care for infants in some parts of Canada.

Criticisms of Policies: Child Care Subsidies

Some jurisdictions impose a maximum amount on the fee subsidy determined by the age of the child regardless of the actual fee for the service.

A single parent family needs the subsidy more than a two parent family

Conclusion

Both of the policies discussed are effective in assisting parents with child care costs, but run into some problems regarding income inequality and child care choices

Going forward, policies should attempt to address these issues to better serve the public