Quebec out $8.6M last year in child-assistance overpayments

Province pays out $2B annually to help pay cost of raising kids, overpaying $96M yearly then tracking it down

Image | Mother's Day

Caption: Between 2011 and 2015, Quebec overpaid families an average of $96 million annually. The government tries to get back as much of the overpayments as possible. (Darren Johnson/iDJ Photography/Flickr)

The Quebec government fails to recover millions of dollars in child-assistance overpayments each year from families no longer entitled to the financial aid.
Quebec hands out more than $2 billion a year under the program, which goes to help families with the cost of raising children.
However, a change in marital status or custody may reduce the amount of child assistance a family is eligible to receive. A family that moves out of Quebec would no longer be entitled to payments at all.
Over the past five years, the government has overpaid an average of $96 million dollars a year.
During that same period, it has been unable to recuperate an average of $6.7 million a year.
The amount of unrecoverable money has steadily increased from $5.3 million in 2011 to a high of $8.61 million in 2015.
Government officials say it's not surprising that millions of dollars don't get recovered, considering the size of the program.
Retraite Québec, which administers the program, relies on parents to notify it of changes that could affect the amount of money they're entitled to receive.
"From one year to the next, you can have many changes to a family's civil status," said Retraite Québec spokesman Pierre Turgeon.
"There are people who leave Quebec, and people who arrive. You can't ask us to track every single dollar we overpay," Turgeon said.

Soft approach tried first

Quebec established its child-assistance payment program in 1998. It now helps about 860,000 families with children under the age of 18 living with them.

How much a family is entitled to is calculated when parents file their income tax returns. It's based on the number of dependent children, family income and whether the family is headed by one or two parents.
But a lot can happen in a year.

"Most of the time, there is a delay between the payment and the moment we know there's been a change in a family's situation," said Turgeon.
At that point, he said, a recalculation is done, and the government can see if it's made an overpayment. If so, the parent is asked to pay it back.
A soft approach is used first – a notice alerting parents about the overpayment.
If the parent doesn't voluntarily pay the money back, future payments or income tax refunds can be withheld until the overpayment is recovered in full.
Almost 98 per cent of the overpayments are reimbursed, Turgeon points out, and an effort is made to collect the rest.
"We have to be careful when we say there is $8 million not recuperated," said Turgeon. "It's not $8 million down the drain. We may get more of it back."

Hard to recover from parents who leave Quebec

Some money does slip through the cracks, particularly if a parent moves out of province.
Unlike many other provinces, Quebec's child benefit program is not administered by the Canada Revenue Agency, which means it's not as easy to recoup overpayments.

The Quebec arm of the Canadian Taxpayers Federation says while the intentions behind the program are good, the overpayments amount to wasted money.
It suggests not putting the money in the government's hands in the first place.
"The best universal program for parents and families would be tax cuts," said Carl Vallée, the federation's Quebec director. "When you are cutting taxes, there is no red tape and no overpayments."
That way, he says, parents have more money in their pockets from the start and can figure out how to manage their budget themselves.

Image | revised child benefit graphic

Caption: Quebec makes child-assistance overpayments of $96 million a year on average. (Retraite Québec)

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