I was recently reviewing Alberta’s 2022–2023 budget that the UCP government released back in February, and something caught my eye.
The UCP plans to spend $335 million on the Alberta Child and Family Benefit this year. They had budgeted $345 million last year.
That’s a cut of $10 million.
And that’s not all. They’re projecting a further $10 million cut next year, too, when they plan to drop spending to $325 million on the programme, and freezing spending the following year.
Not only that, but when comparing this year’s budget documents with last year’s, we find that while the UCP government had budgeted $230 million on the programme in 2020–2021—its inaugural year—yet spent only $219 million. They underspent on the programme by $11 million.
Finally, despite inflation rates that Alberta hasn’t seen in nearly 15 years, the UCP government isn’t budging on the income thresholds for the programme.
The UCP government starts clawing back payments once a household income reaches just under $25,000, and the base component of the benefit completely disappears once the family’s income hits $41,000.
For reference, someone making $41,000 working full-time would be making $19.71 an hour before taxes. But remember, this is household income, not individual income.
As I reported back in the summer of 2020, the Alberta Child and Family Benefit replaced the Alberta Child Benefit and the Alberta Family Employment Tax Credit in July of that year.
Introduced by the NDP government in 2016, the Alberta Child Benefit provided direct financial assistance to lower-income families. All lower-income families, including those receiving AISH or income support, were eligible to receive this benefit.
Introduced by the PC government, the Alberta Family Employment Tax Credit provided a tax break to low- and middle-income working families with children when they filed their taxes.
the Alberta Child and Family Benefit replaces those two programmes. It provides direct financial assistance every 3 months (starting in August) to lower and middle-income families with children under 18.
The new programme has two components: the base component and the working component.
The base component is available to lower-income families with children, regardless of whether they earn employment income. The working component is available to families who make over $2,760 a year.
Under the base component, families could receive up to $1,330 per year if they have 1 child and $3,325 per year if they have 4 or more children. The working component would add as much as $681 per year for 1 child and $1,795 for 4 or more children.
Families could qualify for both components, which would work out to a maximum combined total of $2,011 for a family with 1 child and $5,120 for 4 or more children.
As soon as your household starts making over $24,467 a year, however, the base component starts to drop, and, as I mentioned, it’s completely gone if your household income exceeds $41,000.
That also happens to be the point when the working component starts to be reduced. So, once your household income passes $41,000, you’re no longer receiving any of the $1,300–$3,325 per year for the base component, and the $681–1,795 working component starts to be whittled down.
By the time your household income hits $61,000 (say, if each parent makes $30,500 a year), the working component will be completely diminished: you’ll no longer qualify for any component of the Alberta Child and Family Benefit.
Here’s how much the province spent (or plans to spend) on the programme since 2018–2019. Keep in mind that the amounts in the 2018–2019 and 2019–2020 budget years are for the old two programmes, and the 2020–2021 includes the new programme and a few months under the old programmes.
We see that while there were significant increases in 2019–2020 and 2021–2022 compared to 2018–2019 (the NDP’s last year in office), those increases have been reduced this year and will be completely wiped out next year.
In fact, the UCP government plans to spend less next year on their one programme than the NDP spent on the previous two programmes combined.
But at least corporations got their profit tax cut by a third.