Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

There are two issues:

1. CCTB (Canada Child Tax Benefit)

2. UCCB (Universal Canada Child Benefit)

1. The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under age 18.[1]

The CCTB (Canada Child Tax Benefit) includes the following two benefits:

1. CCTB funds excluding the National Child Benefit (NCB) and Child Disability Benefit (CDB)

2. NCB and CDB funds

1. The CCTB funds excluding the NCB and CDB belong to the responsible parent/s of the child as these funds are given by the government to assist the responsible parent/s. This is deduced from the fact that the amount of funding is based on the amount of income that the responsible parent/s earns. The government gives this money as a form of assistance (Ta’awun) to the responsible parent/s. The existence of dependant’s (children) is merely a Sharth (condition) for the eligibility of this assistance. Since you are the responsible parent, the CCTB funds belong to you. The CCTB funds will form a part of your estate as long as you remain the responsible parent of the child.

The above can be deduced from the following clauses as espoused in the CCTB Act of the CRA (Canada Revenue Agency):

1.1) “The amount of CCTB given to families is calculated by looking at the income of parents.   If your adjusted family net income is more than the base amount, your CCTB will be reduced.  In other words, the higher your income, the less CCTB funds you will receive and the lower your income the more CCTB funds you will receive.”

2. 1)“We reduce the basic benefit if your adjusted family net income is more than $40,726. For a family with one child, the reduction is 2% of the amount of adjusted family net income that is more than $40,726. For families with two or more children, the reduction is 4% of the amount of adjusted family net income that is more than $40,726.”

3.1) “Family net income is one of the factors used in the calculation of your CCTB entitlement.”

2. The NCB/CDB/NCBS funds/monies belong to the child and not the parent’s of the child. The parent’s serve as Wakeel (agent) on behalf of the government; who serve as principle (Mu’akkil). The parent merely holds the money in his/her possession (Qabdh) as Amanat (trust) on behalf of the child. Since these monies belong to your child, they cannot form a part of your estate.

We understand that one CCTB cheque is given out with all the benefits including NCB/CDB/NCBS, therefore one should work out the different amounts/benefits when calculating which amounts will belong to the responsible parent/guardian and the child.

The above can be deduced from the following clauses:

1. “The National Child Benefit Supplement (NCBS) is included in the CCTB and paid monthly to low-income families with children under 18 years of age. It is the Government of Canada’s contribution to the National Child Benefit (NCB).”

2. “The CDB is a monthly benefit included in the CCTB to provide financial assistance to qualified families caring for children who have severe and prolonged impairment in physical or mental functions. Families with children under 18 years of age who qualify for the disability amount are eligible to receive a CDB.”

2. Kindly provide a detailed explanation on the UCCB (Universal Canada Child Benefit) in order for us to issue a ruling. Kindly explain if there are any added benefits, etc under the UCCB as in the CCTB.

and Allah Ta'ala Knows Best

(Mawlana) Ismail Desai
Student: Darul Ifta

Further References:

[1] http://www.servicecanada.gc.ca/eng/goc/cctb.shtml, last accessed at 14/01/2013.

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