Just got my $100 Child Care Allowance... Which RESP?

[JessTheDealHunter]

Hi everyone, I just got my check for $200 for my two girls for the so called "childcare plan".
I will be putting it into an RESP, but I'm not sure where to get one other than my bank.
I am assuming that it is like any other investment, where different places will have different rates.
I was going to go to my local bank and talk about which one to go with... they do them through Mutual Funds.
Does this sound like a reasonable place/way for my RESPs for my 2 kids?
Any other suggestions?

[pitz]

I'd suggest the lowest cost index funds you can find for investment of both your contributions, as well as the Canada Education Savings Grant.

TD's series of eFunds seem to be the lowest cost options available in Canada, http://www.tdefunds.com .

Obviously construct a portfolio that is some mixture of Canadian, USA, and International equity index funds. Its all pretty easy, and sticking with the low cost index funds pretty much guarantees that you will outperform most actively managed investment schemes.

[JessTheDealHunter]

I'm new to investing and think it may be better to have my portfolio created for me.

[mart242]

Are you maximizing your RRSPs? What's your marginal tax rate?

Putting that money in a RRSP might be a better choice in some situations.

[Gingergirl]

Hi everyone, I just got my check for $200 for my two girls for the so called "childcare plan".
I will be putting it into an RESP, but I'm not sure where to get one other than my bank.
I am assuming that it is like any other investment, where different places will have different rates.
I was going to go to my local bank and talk about which one to go with... they do them through Mutual Funds.
Does this sound like a reasonable place/way for my RESPs for my 2 kids?
Any other suggestions?


Just kidding!!!

Too bad when I have a child I won't have a daycare space to put my child in so I can work and make enough money to support my family AND save for my child's education too.

Oh well at least someone is benefiting right. :D Good for you!!

[Bullseye]

Depending on the age of your kids, you'll want to go with fairly low risk investments. The older they are, the lower the risk level, just like with an RSP.

I use a bank balanced mutual fund for mine, but will switch to GIC's as my kids get older and closer to going to school.

[Bullseye]

Also meant to add...don't forget that the 'daycare' money is taxable income, even though they are not taking any deductions from it! I think a lot of people will be surprised at next tax time to get hit with a tax bill for that income.

[Pixie]

Also meant to add...don't forget that the 'daycare' money is taxable income, even though they are not taking any deductions from it! I think a lot of people will be surprised at next tax time to get hit with a tax bill for that income.
Good point. People like me who work weekends and midnights and manage to avoid daycare will really be getting screwed. I'm actually thinking that I'll be putting the money for my boys into an RRSP for just that reason.

[Wiseman]

Just got our $100 cheque as well.. off to the beer store.

[don242]

You have received a cheque? We haven't received ours yet and I am assuming it will just be direct deposited like everything else. I would have expected it already if that were the case. Are they all going out by cheque?

[Bullseye]

You have received a cheque? We haven't received ours yet and I am assuming it will just be direct deposited like everything else. I would have expected it already if that were the case. Are they all going out by cheque?

All of the first payments will be by cheque (the government wants maximum political points from this), then you can set up DD if you want.

Everyone should be getting it this week sometime. If you are already getting the CTB, it will come automatically.

[ultra]

We just have a baby. Do we need to apply for this? and how?

[Bullseye]

We just have a baby. Do we need to apply for this? and how?

Yes, you need to apply;

CTB (http://www.cra-arc.gc.ca/benefits/cctb/menu-e.html)

[don242]

All of the first payments will be by cheque (the government wants maximum political points from this), then you can set up DD if you want.

Everyone should be getting it this week sometime. If you are already getting the CTB, it will come automatically.

Cheques don't score points with me. Just means I have to make a stop at a bank machine sometime. I would much rather have it deposited directly. Oh well, will take the money anyway it comes.

[matkokubko]

Cheques don't score points with me. Just means I have to make a stop at a bank machine sometime. I would much rather have it deposited directly. Oh well, will take the money anyway it comes.

You should have told them (CRA) that you want direct deposit instead of getting a cheque. Find, fill a form, attach blank cheque and here you go, money will arrive to your account directly.

[Bullseye]

Cheques don't score points with me. Just means I have to make a stop at a bank machine sometime. I would much rather have it deposited directly. Oh well, will take the money anyway it comes.

The cheque, along with some propaganda that I'm sure they're sending along with it, will get the intended message across to the masses - the government is giving you money, vote for us next election! A direct deposit for the first payment could be missed, or not understood what it is for.

[Bullseye]

You should have told them (CRA) that you want direct deposit instead of getting a cheque. Find, fill a form, attach blank cheque and here you go, money will arrive to your account directly.

No one is getting the first payment by DD, it's all cheques.

[davecanada]

Had our son June 3rd...

Received first $ today.

Thanks Steve

[mart242]

You should have told them (CRA) that you want direct deposit instead of getting a cheque. Find, fill a form, attach blank cheque and here you go, money will arrive to your account directly.

I filled all the forms to get a direct deposit but still got a cheque the first time. I had to fill the form for direct deposit once again. Big waste of money and paper for the govt!

[don242]

You should have told them (CRA) that you want direct deposit instead of getting a cheque. Find, fill a form, attach blank cheque and here you go, money will arrive to your account directly.
Everything gets direct deposited already. Bullseye just said that the first payment is by cheque.

Any refund, child tax benefit already gets direct deposited so I assume all refunds would. I just haven't seen this deposit yet and since Bullseye said the first payment was by cheque, I had assumed that was why I haven't received it yet.

[JessTheDealHunter]

Nope,
When I got my $200, I had to mail away a form saying I wanted my money to be DD, even though my current baby bonus is already DD.

Again, this is just so people physically see the money and are reminded who gave it to them.

Hopefully they will remember who is taking it away with higher income tax when they do their taxes 6 months from now...

[Bullseye]

Hopefully they will remember who is taking it away with higher income tax when they do their taxes 6 months from now...

Well, it's not really higher income taxes, just a reinstatment of the rate that was in place before all the election promises started flying. The Liberals, desperately trying to cling to power during an election campaign, cut taxes half a percent. The Cons needed to undo that to fulfill their own election promise of the GST cut.

If you're like me, though, and don't put your kids in daycare, then you are definitely way ahead with the daycare benefit.

Not that any of this will affect how I vote!

[BlueMax]

Wy wife stays home with our child (#2 is on the way!)
This benefit helps a little - though it's still almost an insult that the system encourages parents to dump their kids into daycare and get to work.

EI even refused to help us because my wife is "supposed" to go to work - even at 6 months pregnant!

This has to change. Society has slid to the awful state it's in because of parents neglecting their duties - the "system" encourages it. After all, it benefits the government in taxes, and the corporations with our ridiculous spending habits. I've never seen so many people with huge TV's and Hummers..... :mad: :mad:

[bubble.tea]

I'm so frustrated with this?

I remember being as lost with my daughter 2yrs 9months ago after her birth, and here I am now facing the same baffling decision for my son 9months.

p.s. I STILL HAVEN'T SET UP AN RESP FOR MY DAUGHTER!!!

It's SO DAUNTING.

someone please spoonfeed me through this?

Even if you're in the Yukon., gimme yer number and I'll call you up myself.

p.s. I also got the $200.00 hard copy cheque this week :)

[don242]

Nope,
When I got my $200, I had to mail away a form saying I wanted my money to be DD, even though my current baby bonus is already DD.

Again, this is just so people physically see the money and are reminded who gave it to them.

Hopefully they will remember who is taking it away with higher income tax when they do their taxes 6 months from now...
Not everyone may have noticed but not only are you taxed on the oney but part of your child tax benefit has been lost as well.

There is a supplement for children under 7 on your child tax benefit. If your children are 5 or under, you lose this supplement and get the $100 instead. Once your child turns 6 you lose the $100 and get the supplement again till your child urns 8.

Granted the supplement for us worked out to just over $20 per child so the $100 is better. But now only is the money taxed, but it also is in replacement to another benefit. These are the things that we don't hear about when the governement is handing you back our money.

[don242]

I'm so frustrated with this?

I remember being as lost with my daughter 2yrs 9months ago after her birth, and here I am now facing the same baffling decision for my son 9months.

p.s. I STILL HAVEN'T SET UP AN RESP FOR MY DAUGHTER!!!

It's SO DAUNTING.

someone please spoonfeed me through this?

Even if you're in the Yukon., gimme yer number and I'll call you up myself.

p.s. I also got the $200.00 hard copy cheque this week :)

Hey bubble, what are you looking for exactly? I will do my best to explain what I can. If you are looking at an RESP, the person to see would probably be the same person who you use when contributing to an RRSP. Just let them know you want to contribute to a RESP and they will take care of it.

Basically the governement will match 20% (i think thats the number) of whatever you contribute up to a maximum per year. So essenetially you are making 20% on the money right away. The money also stays invested until any of your children decide to continue in school (university, college, trade, etc). If your children do not continue, then you will have to repay the government contributed portion. The RESP is transferrable between your children so if one decides not to go to school and the other does, then you are still fine.

Let me know if you have more questions and I will do my best. If not, my mother is a financial planner so I can ask her if I don't know.

[bubble.tea]

Mr. Cambridge., I appreciate your efforts.

I should've clarified., I understand HOW it works...I just don't understand WHICH one to choose. You've made the error that I actually contribute to RRSPs...sadly another avenue I haven't arranged yet in my life :(.

[don242]

Mr. Cambridge., I appreciate your efforts.

I should've clarified., I understand HOW it works...I just don't understand WHICH one to choose. You've made the error that I actually contribute to RRSPs...sadly another avenue I haven't arranged yet in my life :(.
Go to a bank or find an advisor and they will guide you. If you aren't comfortable picking specific funds or investments, most places have a portfolios that includes a variety of different funds. This gives you the added diversity of being in multiple funds (of which diversify your investments over multiple stocks, bonds, etc.).

I myself do not have an RESP set up yet but keep plaaning to do so. I do contribute to an RRSP but not nearly enough.

[Bullseye]

Not everyone may have noticed but not only are you taxed on the oney but part of your child tax benefit has been lost as well.

There is a supplement for children under 7 on your child tax benefit. If your children are 5 or under, you lose this supplement and get the $100 instead. Once your child turns 6 you lose the $100 and get the supplement again till your child urns 8.

Granted the supplement for us worked out to just over $20 per child so the $100 is better. But now only is the money taxed, but it also is in replacement to another benefit. These are the things that we don't hear about when the governement is handing you back our money.

Crap!! Even I didn't know this, and I always am sure to keep up to date on these things. I wondered why my CTB was $20+ less than I was expecting it to be!

The Cons were supposed to be repairing the cynical attitude that many Canadians have taken towards government, but this kind of thing will only make it worse. They obviously are looking for maximum political gain, $100 per month is catchy sounding, but it appears that number is shrinking even more than I thought it would.

[mart242]

Crap!! Even I didn't know this, and I always am sure to keep up to date on these things. I wondered why my CTB was $20+ less than I was expecting it to be!
...

Well for once, I am receiving something, and the full amount. They are not substracting 20$ from my CTB because we're not eligible. We got a cheque for 1.78$ or some ridiculous amount when our son was born because my wife had only EI for a few months. We thought that it was ridiculous to send us that!

The 100$ / month is taxable though.. does it apply to the highest or lowest income?

[don242]

Well for once, I am receiving something, and the full amount. They are not substracting 20$ from my CTB because we're not eligible. We got a cheque for 1.78$ or some ridiculous amount when our son was born because my wife had only EI for a few months. We thought that it was ridiculous to send us that!

The 100$ / month is taxable though.. does it apply to the highest or lowest income?

So it would seem those with a lower income who normally get the supplement now lose the supplement and get the $100 but now is really only $80. While those with higher incomes and didn't get the supplement in the first place get $100 without losing. Of cousre taxes still have to be paid so the amount is even less and I guess the higher income will possibly pay more tax on that $100. So it appears that the higher income actually benefits more than the lower income.

As for the $100 child care benefit it is taxable on the lowest income earner.

[Gingergirl]

Crap!! Even I didn't know this, and I always am sure to keep up to date on these things. I wondered why my CTB was $20+ less than I was expecting it to be!

The Cons were supposed to be repairing the cynical attitude that many Canadians have taken towards government, but this kind of thing will only make it worse. They obviously are looking for maximum political gain, $100 per month is catchy sounding, but it appears that number is shrinking even more than I thought it would.


Yeah $100 a month sounds good but I still think Canadians as a whole have been duped. They throw you a little bit of money and everyone salivates.

Well what if you are already well off are those people giving the 100. bucks they don't need to the person down the street who can't afford to work and have daycare. No kids myself but I know someone who pays $900. a month for two kids!! I think she would much rather have the daycare from the Liberals/NDP then Harpers token money.

What the hell I can't see how $1200 a year helps you raise your child the same way as saving $500 a month on daycare. >:(

The fact is there are many women out there who like to work have good carreers or are working on their carreers and this attitude is throwing us back to the stoneage- Me man me work you women you stay at home- why are we suggesting a women can't go to work AND be a responsible caring mother?

This whole issue bugs me and is grounded is some weird right wing religous crap. :twisted:

Thats just my opinion.

[mart242]

So it appears that the higher income actually benefits more than the lower income.

Which reminds me of this little story:

Suppose that every night, 10 men go out for dinner. The bill for all 10 comes to $100. They decided to pay their bill the way we pay our taxes, and it went like this:
* The first four men (the poorest) paid nothing.
* The fifth paid $1.
* The sixth $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth man (the richest) paid $59.

All 10 were quite happy with the arrangement, until one day, the owner said: "Since you are all such good customers, I'm going to reduce the cost of your daily meal by $20." So now dinner for the 10 only cost $80.

The group still wanted to pay their bill the way we pay our taxes. The first four men were unaffected. They would still eat for free. But how should the other six, the paying customers, divvy up the $20 windfall so that everyone would get his "fair share"? They realised that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth and sixth men would each end up being paid to eat. The restaurateur suggested reducing each man's bill by roughly the same percentage, thus:

* The fifth man paid nothing (like the first four) instead of $1 (100%
saving).
* The sixth paid $2 instead of $3 (33% saving).
* The seventh paid $5 instead of $7 (28% saving).
* The eighth paid $9 instead of $12 (25% saving).
* The ninth paid $14 instead of $18 (22% saving).
* The tenth paid $49 instead of $59 (16% saving).

Each of the six was better off, and the first four continued to eat for free, as now did the fifth - but outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man "but he got $10!"

"That's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more than me!"

"That's true!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner. The nine sat down and ate without him, but when they came to pay the bill, they discovered that they didn't have enough money between all of them to meet even half of the bill!

That, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

[Wiseman]

So it would seem those with a lower income who normally get the supplement now lose the supplement and get the $100 but now is really only $80. While those with higher incomes and didn't get the supplement in the first place get $100 without losing. Of cousre taxes still have to be paid so the amount is even less and I guess the higher income will possibly pay more tax on that $100. So it appears that the higher income actually benefits more than the lower income.

How is this? We are still getting the same supplement as well as the $100.

[don242]

How is this? We are still getting the same supplement as well as the $100.
No, if your income is at a certain level you used to get the supplement whereas higher than that you didn't get the supplement. Now no matter what you income you get the $100. Only difference is that those with the lowe rincome who got the supplement before, now lose it.

[don242]

Which reminds me of this little story:

Suppose that every night, 10 men go out for dinner. The bill for all 10 comes to $100. They decided to pay their bill the way we pay our taxes, and it went like this:
* The first four men (the poorest) paid nothing.
* The fifth paid $1.
* The sixth $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth man (the richest) paid $59.

All 10 were quite happy with the arrangement, until one day, the owner said: "Since you are all such good customers, I'm going to reduce the cost of your daily meal by $20." So now dinner for the 10 only cost $80.

The group still wanted to pay their bill the way we pay our taxes. The first four men were unaffected. They would still eat for free. But how should the other six, the paying customers, divvy up the $20 windfall so that everyone would get his "fair share"? They realised that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth and sixth men would each end up being paid to eat. The restaurateur suggested reducing each man's bill by roughly the same percentage, thus:

* The fifth man paid nothing (like the first four) instead of $1 (100%
saving).
* The sixth paid $2 instead of $3 (33% saving).
* The seventh paid $5 instead of $7 (28% saving).
* The eighth paid $9 instead of $12 (25% saving).
* The ninth paid $14 instead of $18 (22% saving).
* The tenth paid $49 instead of $59 (16% saving).

Each of the six was better off, and the first four continued to eat for free, as now did the fifth - but outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man "but he got $10!"

"That's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more than me!"

"That's true!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner. The nine sat down and ate without him, but when they came to pay the bill, they discovered that they didn't have enough money between all of them to meet even half of the bill!

That, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.
Yeah, I have heard this one before. It is a good way to illustrate how the system works. Obviously a tax break of a certain % will result in those who pay more taxes to get more back. My point however is not to say the "rich" don't deserve tax breaks but just to say the "poor" got something taken away in this child care deal.

[don242]

The fact is there are many women out there who like to work have good carreers or are working on their carreers and this attitude is throwing us back to the stoneage- Me man me work you women you stay at home- why are we suggesting a women can't go to work AND be a responsible caring mother?



I agree that women should have every right to work just as a man. A man can just as easily stay home with the children.

There is obviously a need for child care (especially for single parents). But there is also the disturbing trend that parents no longer feel that they are required to bring up their children or feel they aren't qualified to raise a child and must send them to someone who is.

But like you, this is just an opinion and we are probably in the wrong thead for this discussion.

[Wiseman]

No, if your income is at a certain level you used to get the supplement whereas higher than that you didn't get the supplement. Now no matter what you income you get the $100. Only difference is that those with the lowe rincome who got the supplement before, now lose it.

Ok let's get this straight.. before this Universal Child Care Benefit, we were getting $58.xx every month for CTB. But now with UCCB in effect, we are getting $59.xx/month for CTB and $100/month for UCCB. Our combined household income was roughly the same for the last 2 tax years. For us we didn't lose the 'supplement'.. unless you're referring to a different supplement I'm not aware of?

[don242]

Ok let's get this straight.. before this Universal Child Care Benefit, we were getting $58.xx every month for CTB. But now with UCCB in effect, we are getting $59.xx/month for CTB and $100/month for UCCB. Our combined household income was roughly the same for the last 2 tax years. For us we didn't lose the 'supplement'.. unless you're referring to a different supplement I'm not aware of?
You weren't getting the supplement before then. The supplement is based on your income so your income was obviously too high to qualify for it last year.

[sandy99]

I'm so frustrated with this?

I remember being as lost with my daughter 2yrs 9months ago after her birth, and here I am now facing the same baffling decision for my son 9months.

p.s. I STILL HAVEN'T SET UP AN RESP FOR MY DAUGHTER!!!

It's SO DAUNTING.

someone please spoonfeed me through this?

Even if you're in the Yukon., gimme yer number and I'll call you up myself.

p.s. I also got the $200.00 hard copy cheque this week :)
I use Heritage RESP over my 2nd choice of TD Bank. The have on-line access also. Its a no brainer really and you can recoup that 20% for some of the lost years.
If you have 2 kids have 2 plans. If kid1 quits school then kid2 can use kids1 resp also. If all kids quit then you can roll the money into your RSP minus that 20%. It can be used for univ, college, and even arts/trade schools in Canada and abroad.

[bubble.tea]

Ladies and Gentlemen...I think this is what we need to do.


Whoever has done the most investigation into RESPs, should start a new thread, and make it a poll.

there are 10 options permitted in polls...so you can list up to 9 options, and leave 10 as 'other'.

Then we can get a poll going to see which options for RESP are the most popular.

I think I would prefer to be TOLD which to choose myself. I've never been into investment so as you can see I'm clueless as to which to choose.

Sometime soon I think I'll speak to a personal wealth manager acquaintance of mine.

[Wiseman]

You weren't getting the supplement before then. The supplement is based on your income so your income was obviously too high to qualify for it last year.

Does this supplement have a name?

[don242]

Does this supplement have a name?
On my child tax benefit form from the governement it shows my monthly payment and below that it just says Child supplement (it is the supplement for children under 7).

[mart242]

Does this supplement have a name?

CCTB. Canadian Child Tax Benefits.

I don't "deserve" it either. >:(

[Wiseman]

CCTB. Canadian Child Tax Benefits.

I don't "deserve" it either.

I am getting the CCTB.. but don is saying there is another supplement that I'm not eligible for.

[Bullseye]

The supplement is not based on income, it was for all kids under 6, I believe. We are most definitely not low income. We get the CTB for this year, but only because my wife was off last year, and we made large RSP contributions. Our income for qualifying purposes was low enough that year, but I don't expect to get much, if anything, in future years. The cut off is around $90-100k family income, roughly.

I think people here are confused because there is also another supplement, that IS for lower income families.

[Bullseye]

Here's the info from the CRA site;

'There is a supplement of $249 ($20.75 a month) for each child who is six years of age. This supplement is reduced by 25% of any amount you or your spouse or common-law partner claimed for child care expenses on your income tax return. Eligible families with children under six years of age will receive the new Universal Child Care Benefit.'

CRA (http://www.cra-arc.gc.ca/benefits/cctb/faq_payments-e.html)

So it is indeed NOT income based. All of us with children under six are now losing $20.75 per month if they qualify for the CTB, replaced by the $100 benefit, which is TAXABLE income. Nice shill game they are playing there.

[don242]

Here's the info from the CRA site;

'There is a supplement of $249 ($20.75 a month) for each child who is six years of age. This supplement is reduced by 25% of any amount you or your spouse or common-law partner claimed for child care expenses on your income tax return. Eligible families with children under six years of age will receive the new Universal Child Care Benefit.'


Thanks Bullseye. I was wrong about it being income based. I just figured it was based on something and income seemed logical but that makes sense.

[Bullseye]

Well what if you are already well off are those people giving the 100. bucks they don't need to the person down the street who can't afford to work and have daycare. No kids myself but I know someone who pays $900. a month for two kids!! I think she would much rather have the daycare from the Liberals/NDP then Harpers token money.

What the hell I can't see how $1200 a year helps you raise your child the same way as saving $500 a month on daycare. >:(

The fact is there are many women out there who like to work have good carreers or are working on their carreers and this attitude is throwing us back to the stoneage- Me man me work you women you stay at home- why are we suggesting a women can't go to work AND be a responsible caring mother?

This whole issue bugs me and is grounded is some weird right wing religous crap. :twisted:

Thats just my opinion.

And how does taxpayer funded daycare help people like me who actually take care of our own children? It doesn't. I don't think we as a society should be encouraging people to put their kids in daycare by making it free or low cost for them.

Yes, lots of women have careers...why are you implying that it has to be the woman who stays home? I'm a part time stay at home dad, and there are lots of others like me. Get out of your old sterotypes, moder parents need modern solutions.

[tomtong]

Does this supplement have a name?

It's called National Child Benefit (NCB). You will see it in the pamphlet that comes with your July CCTB cheque.