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Plain English
The Canada Child Benefit sends you tax-free monthly payments for each kid. But the more you earn, the more the government claws those payments back. An RRSP contribution lowers your 'net income' — the number the government uses to calculate your benefits. So you get a tax refund AND bigger monthly CCB cheques. It's like getting paid twice for the same RRSP contribution. This works especially well if your family income is between about $40K and $100K, where the clawback is most aggressive.
Family income: $85,000, two kids under 6. The CCB base is $8,157 per child under 6 ($16,314 total), but at $85K income the clawback reduces it significantly. A $10,000 RRSP contribution lowers your net income to $75,000, giving you a $3,148 tax refund (31.48% rate) and restoring approximately $230 in annual CCB payments. Total first-year yield from one $10,000 contribution: ~$3,378.
Show the analysis
The CCB (ITA s.122.61) provides $8,157 per child under 6 and $6,883 per child aged 6–17 in 2026. Benefits are reduced based on adjusted family net income (AFNI) exceeding $38,237. The reduction rate is 7% of excess AFNI for one child, 13.5% for two children, and progressively steeper for additional children. RRSP deductions directly lower AFNI, producing a dual return: the marginal tax refund plus the restored CCB. For a two-child family in the $60K–$100K corridor, the combined yield (tax refund + CCB restoration) can exceed 35% per dollar of RRSP contribution.
Family AFNI: $85,000. Two children under 6. CCB reduction: ($85,000 − $38,237) × 13.5% = $6,313 annual clawback. After $10,000 RRSP: AFNI = $75,000. New clawback: ($75,000 − $38,237) × 13.5% = $4,963. CCB restoration: $6,313 − $4,963 = $1,350/year. RRSP refund: $10,000 × 31.48% = $3,148. Total first-year yield: $3,148 + $1,350 = $4,498 per $10,000 contributed (effective 44.98% return).
Edge cases
- At very high family income ($200K+), the CCB is already fully clawed back — the RRSP's CCB advantage is zero, and the decision reverts to pure rate arbitrage.
- If family net income is below $38,237, there is no CCB clawback to restore — the RRSP provides only the standard tax refund.
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Every number on this site is sourced from CRA publications, the Income Tax Act, or provincial fiscal releases. We show the math, cite the sources, and never tell you what to do with your money.