Support can take many different forms, and fortunately, the Child Disability Benefit (CDB) provides a tax-free monthly payment to caregivers of children under 18 who have severe and prolonged mental or physical impairments. The purpose of this benefit is to help alleviate the significant costs associated with medical care, essential supplies, and ongoing daily support required for these children.
Eligibility is determined by a specific criteria, and the payment amount is based on two factors: the number of eligible children and the family’s adjusted net income. For further information on the eligibility criteria, click here.
The CDB is not considered taxable income and is paid directly to the child’s primary caregiver. When families are engaging in estate planning, particularly when establishing trusts for similar purposes, it is important to ensure these private financial resources are structured to supplement, rather than replace, public benefits such as the CDB. Previously discussed in a blog post linked here, this serves as an excellent introduction and reference point on the subject.
Additionally, extra care must be taken with guardianship and succession planning. Since the CDB is paid to the child’s primary caregiver, these payments may be impacted if the caregiver is no longer able to fulfill their responsibilities. Wills and powers of attorney are essential tools for ensuring that, if the primary caregiver becomes unable to act, plans are in place to continue supporting the child’s needs through thoughtful and proactive arrangements.