6.14 Recovery of transition child benefit
Section 2, 8, and 19 of the Act.
Sections 2(3), 40, 47.2, 48, 53, 58.3 and 63 of Regulation 134/98.
Adequate documentation is on file to support the reduction of budgetary requirements as required.
Application of policy
The Transition Child Benefit (TCB) is a mandatory benefit provided to assist recipients with dependent children under the age of 18 who are:
- not receiving the Ontario Child Benefit (OCB) and National Child Benefit Supplement (NCBS)
- receiving less than the maximum amounts of the OCB and NCBS
- receiving less than the maximum amount of the OCB and $0 NCBS
- receiving $0 OCB and less than the maximum amount of the NCBS
Note: Since the NCBS was consolidated into the Canada Child Benefit (CCB) in July 2016, notional NCBS amounts have been provided by the Canada Revenue Agency to enable the calculation of the TCB. Effective July 2018, notional NCBS amounts are calculated within SAMS or the manual TCB Calculator tool.
The amount of the TCB is up to a monthly maximum of $230 per eligible dependent child (see Directive 7.6: Transition Child Benefit for more information).
In situations where a recipient receives a retroactive payment of the OCB and/or NCBS for the months in which a TCB has been paid, all or a portion of the TCB issued may be recovered by a reduction of the recipient’s budgetary requirements in the month following receipt of the retroactive OCB/NCBS payment. Budgetary requirements may be reduced for a maximum of three consecutive months or until the TCB has been collected in full, whichever comes first.
How the Transition Child Benefit repayment is calculated
The amount of the reduction in the budgetary requirements will be calculated as follows:
A = the lesser of B and (C + (D - (E x F)))
A = TCB repayment amount (i.e., reduction in the budgetary requirements)
B = the total amount of the TCB paid in the period
C = the total amount of the OCB paid for the same period
D = the total amount of the NCBS paid for the same period
E = the sum of NCBS exemption amounts, depending on the number of children
F = the number of months over which the TCB was paid
The TCB repayment will be the lesser of the total TCB paid and the OCB/NCBS retroactive payment for the same period.
How the budgetary requirements are reduced
The recipient’s budgetary requirements will be reduced by the TCB repayment amount up to a maximum of that month’s budgetary requirements. If the TCB repayment is greater than or equal to the recipient’s budgetary requirements, the budgetary requirements cannot be reduced to less than $2.50 and the recipient will remain eligible for basic financial assistance, including mandatory and discretionary benefits.
For example, if the TCB repayment is $600 and the budgetary requirements for that month are $400, only $397.50 can be applied as a reduction to the budgetary requirements in the month. The remaining $202.50 will be applied against the following month’s budgetary requirements.
The TCB repayment reduces the budgetary requirements before any other type of deductions are applied (e.g., earnings deductions, non-exempt income).
An Ontario Works single parent with two children aged 13-17 years has been receiving the maximum TCB amount of $460 (2 children x $230 TCB) for the months of October, November and December 2018. In December 2018, the recipient received an OCB/NCBS retroactive payment for that same period in the amount of $1,788.96. The OCB amount is $701.46($233.82 per month x 3 months). The gross NCBS amount is $1,087.50 ($362.50 per month x 3 months).
TCB repayment calculation:
TCB repayment amount = the lesser of B and (C + (D - (E x F))
B = $1,380 - Total TCB paid over 3 months ($460 TCB x 3)
C = $701.46 - Total OCB paid over 3 months ($233.82 OCB x 3)
D = $1087.50 - Total NCBS paid over 3 months ($362.50 NCBS x 3)
E = $85.74 - NCBS exemption ($43.75 first child + $41.99 NCBS second child)
F = 3 - Total number of months in the period = 3 months
TCB repayment amount:
TCB repayment amount = the lesser of B and (C + (D - (E x F))
= the lesser of ($1,380 TCB) and ($701.46 OCB + ($1,087.50 NCBS - ($85.74 NCBS exemption x 3 months))
= the lesser of ($1,380 TCB) and ($701.46 OCB + ($1,087.50 NCBS - ($257.22 NCBS exemption))
= the lesser of ($1,380 TCB) and ($701.46 OCB + $830.28. NCBS)
= the lesser of ($1,380 TCB) and ($1,531.74 OCB/NCBS)
TCB repayment amount = $1380
How to apply the TCB repayment amount against the budgetary requirements
Using the same example, the recipient received the TCB amount of $460 for each month during the benefit months of October to December. In December, the recipient began receiving the monthly OCB and NCBS benefits. Also in December, the recipient received the retroactive payment for both the OCB and NCBS for the months of October and November. Since the recipient has already received the TCB for December, the OCB/NCBS received in December from CRA will be counted in the overlap period.
Using the TCB repayment formula, the TCB repayment amount is $1,380. However, since the family has a budgetary entitlement of $1,057 per month ($360 basic needs plus $697 shelter), the TCB repayment amount cannot exceed this amount.
Since the recipient has received basic financial assistance for December when the retroactive OCB/NCBS payment is made, the TCB repayment will begin in January. Since the recipient now receives the full OCB/NCBS amount for two children, she is no longer eligible to receive the TCB as of January.
Assuming a budgetary entitlement of $1,057 per month, the TCB repayment amount of $1,057 for the month of January reduces the family’s budgetary requirements to $0. However, in order to ensure that the recipient remains eligible for social assistance, including benefits, the reduced budgetary entitlement cannot be less than $2.50. Therefore, the recipient’s budgetary requirements will be reduced to $2.50 for the month of January. In Febuary, the remaining TCB repayment amount of $342.50 ($1,380 - $1,037.50= $342.50) will be applied against the budgetary requirements for that month, reducing the budgetary requirements to $697.50 ($1,057 - $342.50 = $714.50). (See illustration below).
Reduced budgetary entitlement
In this example, the full amount of TCB repayment is collected in two consecutive months.
If the scenario is changed slightly, and the same family lives in a rent-geared-to-income housing unit, paying $400 rent each month, the family’s budgetary entitlement is $760 per month ($360 basic needs plus $400 rent [shelter]).
As the TCB repayment is limited to the amount of the budgetary requirements in a given month, the TCB repayment amount cannot be more than $760 in January.
However, to ensure the recipient remains eligible for social assistance benefits during the benefit month that the TCB repayment is applied, budgetary requirements cannot be reduced to less than $2.50. The TCB repayment for January will therefore be $757.50.
The remaining repayment amount of $622.50 ($1,380 - $757.50= $622.50) will be fully collected in February.
If this same family also received non-exempt income of $303 per month, the TCB repayment reduces the budgetary requirements before any other type of deductions are applied.
In the first month, there is no income charge as the assistance has already been reduced to $2.50 as a result of the TCB repayment.
The remaining TCB repayment of $622.50 will be collected in the next consecutive month, reducing the budgetary requirements to $137.50. An amount of $135 (of the $303 income) will be deducted and the recipient will receive the minimum assistance of $2.50.
Transition Child Benefit and overpayments
An overpayment can only be created if the recipient is found to have been ineligible for the TCB. An overpayment cannot be created if the recipient is issued an incorrect TCB amount.
Transition Child Benefit repayments and overpayments
Please note that no overpayments will be created as a result of a TCB repayment. Repayment will occur only up to the maximum amount as defined earlier, and will only occur for a maximum period of three consecutive months, or until the TCB has been collected in full, whichever comes first. The repayment will begin in the benefit month following receipt of the retroactive OCB/NCBS payment.