The CRA says this is why so many parents aren't getting child tax payments

Mar 24 2023, 6:55 pm

The Canada Revenue Agency has been reminding Canadians that it is offsetting taxpayer debt, and many parents have claimed that it’s affecting their child tax payments.

This process involves “proactively applying tax refunds and benefit payments (such as the GST/HST credit) to tax and other government debts.”

According to the agency’s press release published Wednesday, this clawback should not have impacted Canada Child Benefit payments.

“It’s important to note that, unlike other benefits, the Canada Child Benefit (CCB) payment can only be used to offset a CCB debt,” the agency wrote. “Other types of child benefit payments can only be used to offset a debt related to the same benefit.”

But Canadian parents took to social media in droves to express their shock and worry when they found low, delayed, or no CCB payments in their bank accounts on March 20. Some said the CRA emailed them only a few hours before they were due to receive the payment.

Parents are helpless without assistance

Daily Hive covered the initial complaints. In response to our post, we received over 30 emails and comments from affected parents who expressed disappointment in the system and felt like they had been left in the deep end without a solid warning.

Many said they had never applied for the Canada Emergency Response Benefit (CERB) and were thus confused by the tax debt offsetting process.

One single mother of a 13-year-old said she was working full time to put food on the table and a roof over her family’s heads. “My payment went from $560 a month, now it’s $125 a month,” she told us in an email. “I was expecting that to pay the rest of my rent owning. I received [CRA’s] email at 3 am.”

“They took my whole income tax return. I am a disabled single parent,” said commenter Joy Hobbs. “Trudeau has no clue how the rest of us live.”

Danielle, another commenter, said their March tax return and CCB benefit were both taken, writing, “I have a son to feed. How can they do that!? It’s not like the government needs the money.”

Johnny, another parent, talked about his child’s mother, Kayla, having trouble with CCB payment. He said Kayla takes care of herself and their five-year-old on a biweekly CCB amount of $240. The two parents live separately.

“Kayla did not receive her March child tax. She was on hold somewhere between 5-7 hours over three days,” he detailed. After multiple calls spanning hours over the phone with the CRA, Kayla was told she owed no money, tax, CERB debt, or child tax overpayment.

Johnny alleges that the CRA told Kayla there was no reason for her to miss her payment. “They went on to say they’ll forward this to the taxation centre to see if they can issue it early, but if not, she will get both payments for March and April in April,” he said.

The parents were relieved to hear things would turn out okay but said they did not know what to believe after two CRA representatives had already told them they should have received their payments for March in full and on time.

Why is this happening?

In response to our queries on the subject, the CRA explained that tax offsetting is a standard procedure that the agency used before the pandemic to collect overdue balances from taxpayers and has picked up again after a temporary COVID-19-induced pause.

“The CRA has also begun to recover overpayments for the Canada child benefit (CCB). The first CCB payment impacted is the March 2023 payment,” the CRA media relations department confirmed.

“If a recalculation shows that an individual was overpaid CCB, the CRA sends a notice of redetermination that includes a remittance voucher to inform the individual of the balance owing. In addition, the CRA may keep all or a portion of future CCB payments, income tax refunds, or goods and services tax/harmonized sales tax (GST/HST) credits until the balance owed is repaid,” they explained.

The CRA representative also added that notices of determination or notices of re-determination also provide benefit recipients with an accounting summary that details the amounts owing.

The federal agency said it understands that people may struggle to meet their financial obligations and remains committed to supporting Canadians.

“We want to help resolve any issues, and our agents will work with impacted individuals on a case-by-case basis,” the email further read. “If a taxpayer believes that the use of their benefits and/or credits to pay down their debt has caused significant financial hardship, they should contact the CRA directly to discuss their options at 1-888-863-8662, even if they already have a payment plan in place.”

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