SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

Posted on July 28, 2016 by ffswpadmin

SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

In last post of July 25, 2016 (program) it was shown how the new Canada Child Benefit program is a source of discontent for families and how financial discrimination of singles continues.

This post also showed how singles feel they have been left out of the financial process and how most families will bash singles whenever they express despair about this fact. (Ever singles and early divorced singles without children are made to help pay for Canada Child Benefit while families with high net worth are still able to profit from the Child Benefit and other benefits).

As has been stated many times by this blog author, families will talk about about how their ‘hearts are eternally and inexplicably changed’ when bearing their children, but same hearts appear to become ‘hearts of stone’ in financial matters when these same children become adult singles, low income or no income persons and families. These disadvantaged persons are tossed out or are made to be less important in financial formulas and decision-making processes. It is like families become financially dissociated or detached from their children, siblings and relatives that are single without children. Singles are made invisible and excluded from financial formulas by families, politicians and governments.

In last post comments from singles on the Canada Child Benefit were itemized. The one common theme running through all these comments is the dissatisfaction with financial discrimination, but no articulation of what needs to change. When singles are commenting online or by other means, comments without substantiation will just produce more financial bashing of singles.

SINGLES NEED TO LEARN HOW TO ARTICULATE HOW THEY ARE BEING FINANCIALLY DISCRIMINATED AGAINST BY:

–Educate, educate, educate while stating facts– It is a sad fact that most families, businesses, financial gurus, politicians and government will not have a clue about what singles are talking about when it comes to financial discrimination. Most will get that glazed look in their eyes and state it costs less for singles to live and children are more important. And unfortunately, the education of others will have to occur over and over again until there is maybe one fact that will stick to achieve an ‘ah, ha’ moment. Also, singles will need to be prepared for anger, defensiveness and a whole range of other negative emotions from people they are trying to educate.

–Show examples – This cannot be stressed enough. It is often the examples that will produce understanding of the financial discrimination of singles. For example:

— show copy of ‘Six Reasons Why Married or Coupled Persons Able to Achieve More Financial Power (Wealth) than Single Persons’ (six-reasons)

—show an outline of your budget

—give copies of articles that show how much it costs singles to live

— show examples of how financially privileged families are becoming with benefits like the Child Benefit program (tax-credits)

— show examples of how financially privileged families have become with the benefits upon benefits they receive. (An example of benefits upon benefits is this statement: From time couple with children is married to time one spouse dies couple will have possibly received shower, wedding, baby gifts, paid maternity/paternity leave, child benefits, TFSA/RRSP benefits times two, RESP grants, reduced taxes, pension-splitting and possible survivor death benefits. Singles get none of these benefits while supporting families through payment of taxes to support these benefits-show this statement when talking about financial privilege of families).

— show visual examples of graphs, pictures, etc. that give information on all the benefits that one family unit will receive over the family unit comprised of single persons, for example, financial silos (financial-illiteracy)

— show statistics from studies like ‘Living wage for Guelph and Wellington 2013 (Report) that itemize what it costs a single person to stay off the streets.

—become knowledgeable about different levels of status of singles (marital status). For example, rebuttals will often state singles are included in financial formulas, when in fact, the only singles more likely to be included are single parents and widowed persons. (Updated August 7, 2016)

– Provide solutions – Provide solutions to financial decision makers, one example is to use cost of living equivalence standards (singles) for financial formulas. It is a false statement to say that cost of living for a single person is one half of a married or coupled family unit of two. Rather, some statistics show cost of living for family unit of a single person is approximately 70% of a married or coupled family unit of two. Singles deserve equal representation in financial formulas according to what it costs them to live.

– Spread the word – Tell other singles about financial discrimination, and above all, lobby all decision makers (families, businesses, politicians and government) about inclusion of singles in financial formulas.

– Get out and vote! All financial lives matter. Stop the financial discrimination of singles!

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

CANADA CHILD BENEFIT PROGRAM SHOWS FINANCIAL DISCRIMINATION AT ITS BEST

Posted on July 25, 2016 by ffswpadmin

CANADA CHILD BENEFIT PROGRAM SHOWS FINANCIAL DISCRIMINATION AT ITS BEST

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

(boutique-tax-credits-pushing-singles-into-poverty)

From CBC News-”New Canada Child Benefit program payments” July 20, 2016 (cbc) – Analysis of new Liberal Canada Child Benefit program and old Conservative UCCB program

The old Universal Child Care Benefit or UCCB (Conservative) provided $160 per child per month for children under six and $60 per month for children aged six to 17. That money was paid out to families regardless of income level. The Conservative philosophy was that there should be some component of assistance for families that was universal. However, this benefit was to be included as income and required payment of taxes.

Conservative universal approach could be viewed as all families should receive some component of assistance. Just because they make a lot of money they should not be penalized, they should not be losing out and not getting any government benefits, (Note: only for families, ever singles don’t matter).

The new Liberal program Canada Child Benefit (CCB) begins this month and combines the CCTB and UCCB into one payment that is entirely income tested up to $190,000 of income. The new payment is also tax-free making it more expensive than the UCCB. Less than $30,000 in net annual household income generates benefit $6,500 for each child under six and $5,400 for children aged six through 17 tax free. 300,000 fewer children would live in poverty in 2016-17 compared with 2014-15. The Liberals also reduced the tax rate from 22.5 per cent to 20 per cent for middle-class Canadians earning between $44,700 and $89,401 a year. The Liberal (Trudeau) approach is that these benefits should be based on income testing. Wealthier families can carry more of the load…they don’t need additional government handouts.

Since provinces also provide some child benefits, there was concern that provinces would clawback CCB from children on social assistance. So far eight provinces has indicated they will not clawback CCB.

Illustration provided shows Ava Williams as a Toronto social worker with a net income of about $30,000, who lives in community housing. As a single mother of four children between the ages of six and 17, she says the new program will boost her old annual federal benefit payment by about $6,000 per year with added benefit of the new payment being tax free. Something does not add up for the totals given.. One wonders if she means an additional $6,000 to what she received in 2015. Assuming her net income is under $30,000 and her children all under the age of 18, it appears she will receive somewhere between $21,000 and $26,000 in child benefits, for a total net income between $51,000 and $56,000 all tax free. This is in additional to subsidized housing and other possible federal and provincial benefits such as GST/HST credits with no clawback of the benefits..

An example of additional benefits received on a provincial basis with no clawback is Alberta. In Alberta the non taxable child benefits are applied to working families with children under 18 and a net income starting at $25,500 with phasing out up to less than $41,220 per year. Total annual maximum benefits for one child could be up $1,863, two children $3,107, three children $4,073, and four children $4,762. Ava if she lived in Alberta with four children could receive total tax free federal and provincial child benefits of approximately $55,762 plus subsidized housing ($30,000 net income $21,000 CCB and $4,762 Alberta child credits). (There is no clarification on her marital status, which should not matter, but many readers wanted to know where the father was).

SYNOPSIS OF APPROXIMATELY 2500 READER COMMENTS FROM TWO NEWS ARTICLES

Approximately 2500 reader comments from two news articles were reviewed.(not number of readers, as some some readers comment many times) The majority of comments were classified into the following major categories:

-Negative comments (most were negative)

-Not happy with amounts received between new Liberal and old Conservative benefits or it is not enough

-Positive comments (very few)

-Bashing of political parties (Liberals versus Conservatives)

-Worried about future debt generated by benefits

-Many comments bashing Ava and where is the father of these children

-Other programs would be more beneficial than the child benefit program

-Program will be abused

-Benefits given for children but seniors and disabled receive much less

-Singles feel they have been left out of process and families of all types bash singles

-Divorce and death of one parent as well as other causes have impact on poverty

-Child benefits not only on federal level, but also provincial level

-In addition to benefits, should also be teaching budgeting and financial responsibility

-Immigrants

-Education

-Advantages of Child Benefits

-Benefit programs – have lots of other programs in addition to child benefit

-Eighteen years a long time for benefits

-Misconceptions about what is benefit versus welfare

-In addition to benefits, income taxes also cut for middle class

-Net worth and assets

Because of the length of the post, only issues regarding ‘Singles’ and ‘Net Worth and Assets’ will be discussed here. Other categories will appear at the end of the post for those who wish to review all other categories in their entirety.

Reader comments regarding SINGLES

Single response-We’re sending cheques to families with household incomes up to $190,000/year yet there’s nothing for the 30% of single female seniors living in poverty. There’s a number of programs for single female seniors. I’m sure though that you and I would agree that it’s not enough.

Reader response-For all you single people out there, if you want to get tax free money , you better get married and start having kids because that is the only way you will get a tax shelter.

Single response – Nobody ever wants to help single people with no kids. Ever occur to you that I have no kids because I am responsible and do not want to bring kids into a life of poverty?

Reader response – According to the left if you are single and no kids you need no help. You are well off and should pay more taxes.

Reader response -or you are selfish and don’t want to spend money on anyone but yourself.

Reader response – Don’t worry, that ‘right person’ is out there somewhere.

Reader Response -Yet other people’s kids will be the ones to take care of you when you are elderly. Don’t you think that’s worth a little bit of investment?

Single response – If the govt had money to throw away they could have reduced the tax rate for all of us, not just those who think they are poor because they gave birth to 4 kids.. Single people get NOTHING, just pay up more.

Reader response – We don’t have another human depending on us for life and those who have taken that responsibility deserve the help managing the full time obligation.

Reader response – I doubt that that is what he meant at all. A sense of responsibility is not selfishness. Having kids is one of the most important things you’ll ever do. Granted, you cannot anticipate every life outcome, but generally speaking a responsible adult has an idea of their finances, and where they expect their finances to be in future. Most adults can actually budget their grocery store purchases – I believe they can budget the price of a child. And having babies is not a right. Nobody should be under any obligation to financially support a stranger’s kids.

Reader response – You should be asking yourself why you need help if you’re single with no kids.

Reader response -And second, it’s not to say that single people with no kids can’t or shouldn’t receive support, it’s just that why would you need support for being single or having no kids? If you’re also elderly, or disabled, sick or unemployed sure, but being single and having no kids isn’t making it harder for us to live reasonably.

Single response – Hey, maybe all the poor single people – the disabled, etc., will simply die off and make room for all the government-supported kids.

Single response – as a childless middle aged man I am sick of paying for everybody’s kids, especially the Harper garbage boutique tax credits for hockey and ballet school.

Reader response – More likely you don’t get along with women very well or can’t find someone that will have your kid. Ever occur to you that poor kids may not necessarily have been born that way and that layoffs and economical hits create poor kids? That divorce also creates poor kids. Death of a spouse creates poor kids. You can be a millionaire and bring kids into the world and then have your investments tank the next day and you’re poor.

Reader response – If you are single your costs are much, much lower than if you have kids. Your contribution to the economy is also lower. When I go out to dinner my contribution is 5 times what a single person will bring to a restaurant but I still only need one table. This creates jobs as well. My kids go to swimming lessons (jobs and economic boost), they take the bus (jobs and economic boost), eat food and wear clothes and you name it. Grow up.

Reader Response – Single people do not pay more in taxes, that is a lie.

Single response – they certainly don’t get all the freebies (singles)

Reader response – I don’t think it’s that single people with no kids expect support, it’s simply that they perhaps don’t understand why people with kids should get rewarded with their tax money for having babies.

Reader response– Everyone at some point has paid taxes, not just single people. To say that only “single” taxpayers are funding tax benefit programs is hogwash.

Single response–Single and no kids myself, in my early 50s, barely able to keep a roof over my head even with a full-time job and living frugally. Where’s *my* handout/monthly allowance from the gov’t?

ANALYSIS OF COMMENTS REGARDING SINGLES

It is clear that families with children (and even some singles) are financially illiterate and have no understanding of what it costs a single person to live. Living Wage for Guelph and Wellington (2013 living wage of $15.95 per hour), a bare bones program to get low income and working poor families and singles off the street, allows a calculated living wage income for single person of $25,099 with no vehicle, food $279, transit and taxi $221 (includes one meal eating out per month). (In 2015, the living wage for Guelph and Wellington has been set at $16.50 per hour). Note, this is not Vancouver, Toronto or Calgary where living costs are much higher.

–Singles get no benefits except in abject poverty. In both Liberal and Conservative programs, families with children (including single parents) get the benefits while ever singles and divorced persons without children get nothing.

–Singles pay more. Yes, ‘singles pay more taxes’ is a false statement. Truth is that singles, person to person, pay same taxes, but get less benefits. From the time they are married until one spouse is deceased, married or coupled families with children will likely have received shower, wedding, baby gifts, possibly maternity/paternity leave benefits, child benefits times number of children, TFSA benefits times two, reduced taxes, pension-splitting, possible survivor pension benefits, and then want to retire before age 65. In certain cases some of these families will not have paid a full year of taxes. Single parents will receive child benefits and possible other benefits as well. When all the benefits that families with children receive are taken into consideration, ever singles and early divorced persons with no children do pay more.

-There is a the perception by families that a reason to have children is that they will take care of future generations. Financial responsibility implies that everyone including families should be financially paying for and taking care of themselves. Future generations do not deserve to have heavy tax burdens placed on them to finance this generation and future generations of parents and children. Likewise, financial responsibility implies that children do not deserve huge inheritances, while singles have a much more difficult time achieving same standard of living and saving for retirement as families with children.

Reader Comments regarding NET WORTH AND ASSETS

Comment-Liberals are so dumb that they don’t even know that the measure of true wealth is NOT income but net worth. Are they so stupid to think that a lot of your neighbors, who declare zero income (and I know a lot of them) but can afford Jaguars and Bentleys and multi-million dollar homes really are poor? My wife and I are middle class folks, who live in a modest townhouse in Vancouver who won’t qualify for this now because we “make” too much. Sorry, Justin Trudeau, but 150k a year in Vancouver won’t get you very far.

Comment-if you only make $30,000.00 a year, maybe stop after the second child. Kids are expensive. “According to MoneySense.ca, the average cost of raising a child to age 18 is a whopping $243,660. Break down that number, and that’s $12,825 per child, per year — or $1,070 per month. And that’s before you send them off to university.”

Comment – Take my numbers for example: Property tax in Oakville Ontario is very high. I live in a 3000 sq/ft house on a tiny 90×90 lot and property tax is $12,000 a year. Food cost for a family of 3 is about $15,000 a year, Utilities is $9000, Gas/Car/Insurance (2 cars) is $13000, Clothing/Phone/Living Expenses $8000. I am only listing off the big expenses. Not including a lot of the little things. That comes to $57,000 a year. Hardly enough to live.

Reader Response to above-That sounds more like someone living beyond their means. And taxpayers are expected to step in and assist families like yours who have a more luxurious lifestyle than most could even dream of. If you mean 3 kids, maybe, but 3 people, well, then you want too much. A family of 3 in a 3,000 sq. ft house? $300 in groceries a week for for 3 people? Did you know your taxes would be that high before you bought the house? If so, then you brought that on yourself.

ANALYSIS OF COMMENT REGARDING NET WORTH AND ASSETS

-Sense of entitlement. It is absurd how the wealthy and rich families believe they are entitled to everything (3,000 square foot house)..

-Net worth and Assets. None of these benefit plans include elimination with high net worth and assets, so again, the wealthy and rich families are receiving benefits they do not deserve. One of our last posts (see link at top of page) showed how families with considerable assets ($500,000), one spouse working and four children under age of six would receive considerable benefits while never paying a full year of tax if they retired at the age of 60 when their youngest child turned 18.

-Middle-class families with higher income levels for child benefit program complain they don’t receive same level of benefits. Yet they refuse to acknowledge that they are the ones who would also receive the reduced tax rate from 22.5 per cent to 20 per cent for middle-class Canadians earning between $44,700 and $89,401 a year.

CONCLUSION

It is completely obscene how governments and politicians can implement programs that do not look at net worth and assets. Families units (including singles) with high net worth and assets and low (of any kind) income do not deserve to get child benefits and other wealth-creating benefits and programs.

It is also financially discriminatory when governments and politicians only include certain family units in their financial formulas. In Canada, family units with children benefit most while ever singles and early divorced persons without children get nothing. In the USA, Bernie Sanders has managed to accomplish some wonderful things for financial fairness. However, even some of his accomplishments agreed to by Hillary Clinton again target only certain family units, that is those with children (free college/university for families with incomes $125,000 or less and paid parental family and medical leave). Most politicians, whether right or left leaning, only talk about families, with most benefits given only to families. Singles are never mentioned let alone included in financial discussions and formulas. What if singles want to go to college/university to get a better wage? Why are they are not included?

Many of the reader comments correctly identify divorce and death of a spouse as having a big financial impact on family units. However, it is also irresponsible for family units to not have life insurance to cover these life circumstances. Life insurance for spousal death should be mandatory, just like car and house insurance, and should be ample enough to cover big ticket items like mortgages. Maybe divorce insurance should also be implemented and made compulsory so that ever singles are not forced to support divorced family units.

For many years there have been great universal government programs in place like public school education, and health care. For financial fairness, absurd programs like the child benefit programs need to be replaced with universal day care, government paid for college and university education (at least first couple of years of university) and affordable housing (should be available to all types of family units).Then, if wealthy families want to send their privileged children to elite private schools, day care and university, they can spend their own money to do so.

Benefit programs like income splitting and pension splitting under Conservatives are bad policy as they discriminate against singles, and the widowed and divorced (and spouses earning equal incomes). Benefit programs should focus on the poor with inclusion of net worth and asset assessments in the financial formulas.

Governments, politicians, and families need to become financially educated on what it costs ever singles and early divorced persons without children to live. All Canadian citizens deserve equal financial dignity and respect regardless of the type of family unit they are in.

Once children become ever single and early divorced without children adults, they should not become invisible and made to feel like they are no longer financially important to society. All lives matter including ever singles and early divorced without children adults.

Additional Reader Comments: click on link below:

CANADACHILDBENEFITSCOMMENTS2 (1)

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

Posted on July 22, 2016 by ffswpadmin

THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

Ivanka Trump in her speech yesterday at the Republican Convention stated that something needs to be done about single women without children being paid more than married women with children.

Some studies also show that women under the age of thirty make more than men and some studies show that employers don’t want to hire married women with children.

There also has been a lot said about women being paid less than men for the same job, married men being paid more than single men. There is no doubt that there should equal pay for equal work.

Three different sources are outlined below showing the controversy generated by the facts and whether the fact are really true.

From “Workplace Salaries: At Last, Women on top”, Time magazine, September 1, 2010 (time):

There has been recent evidence in the USA in many of the largest cities that the median income salaries of young women are 8% higher (and in some cases even higher) than men in their peer group. However, this gap does not apply to rural areas and disappears for older women, married women and women with children.

However, there also are many factors where perception is false because all the facts have not been taken into consideration. Some of these facts are:

Education. Women are outpacing men in obtaining degrees.
Knowledge-based industries. Larger cities which tend to have knowledge-based industries will have higher pay. The decline of a manufacturing base in cities may result in lower wages.
Minorities. Hispanic and black women are twice as likely to graduate from college as male peers.

“The holdout cities — those where the earnings of single, college-educated young women still lag men’s — tended to be built around industries that are heavily male-dominated, such as software development or military-technology contracting. In other words, Silicon Valley could also be called Gender Gap Gully.

As for the somewhat depressing caveat that the findings held true only for women who were childless and single: it’s not their marital status that puts the squeeze on their income. Rather, highly educated women tend to marry and have children later. Thus the women who earn the most in their 20s are usually single and childless”.

From “Fact Check: Do young, childless women earn more than men?”, September 10, 2014 (abc)states: data does not hold up because median figures don’t compare people who have the same jobs and qualifications. They are an aggregate of the salaries of all people in a particular cohort; therefore, figures are misleading.

From “Childless Women in their twenties out-earn men. So?”, Matthew Rouso, February 24, 2014, Forbes (forbes) :

“Statistics show only the average difference between men and women, across all jobs. It doesn’t control for the types of job, the number of hours worked or for time taken off (to raise children, for example)….There are differences in job types, education levels, hours worked, and other factors that lead to these wage differentials. But these factors are just as responsible for the overall difference in wages between men and women. Once you control for factors such as college major, time off of the labor force to raise children, and hours worked per week, the gender wage gap essentially disappears. A big part of the difference in pay is due to the choice of jobs: women choose to enter career fields that pay less than those that men choose. Women are still more like to be Kindergarten teachers while men are more likely to work in finance. In short, firms aren’t discriminating against women. The reality remains that women, on average, do earn less than men. But to blame it on discrimination is misguided.

Solutions to the gender wage gap aren’t simple. Taking time off from a job, or working fewer hours, will reduce one’s earning potential, but many people (rightly) relish the opportunity to take time off to raise children. There are no easy policy recommendations to deal with the loss of earning power for those who take time off to raise children. But there is one thing we can do that would decrease the gender wage gap with no negative consequences: ensure that women are encouraged to pursue work in high-paying industries….Women may earn less than men, but causes are more complex than the cries of discrimination we hear from politicians. When politicians mislead the public on this issue, the consequence is our delay in solving the real problem”.

Comment on Ivanka Trump’s statement: It is difficult to find the source of her information. Whatever the source is, what is more disturbing is the continuous reference by politicians and business people to marital status when human rights policies specifically state marital status should not be used in employment. If Ivanka Trump wants to deal with married women’s pay, then she should address all other employment discrimination such as married men being paid more than single men.

TAX REFORM: DONALD J. TRUMP FOR PRESIDENT (donaldjtrump)

Donald Trump as part of his bid for President platform has outlined his suggestion for tax reform. A direct quote from his reform states:

“If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls…..All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.”

Comment of Donald Trump’s Tax Reform: Here we go again, past posts have shown that cost of living is higher for a single person family unit than a married or coupled family unit without children. This once again shows the financial illiteracy and ignorance regarding singles’ finances by politicians and business persons. We do not know all the details of American tax system, but Trump cannot just give a figure for singles, and then multiply it by two for married or coupled family units. Finances for singles don’t work that way. The cost of living for a single person is higher than the cost of living for a family unit of two married or coupled persons, so why should married/coupled family units get the benefit of double tax free income? Marriage penalty??? What about all the marriage benefits that married or coupled family units receive? He also includes a separate column for head of household in his four tax brackets. There is no explanation of what head of household includes, so it is difficult to know what this tax group is all about.

Financial discrimination will continue if singles figures are just multiplied by two to arrive at married family unit figures. When, when are politicians and businessmen going to drop the marital status designation and use family units as the designated standard? Why can’t tax reform be more progressive instead of using same old financially discriminatory practices?

Cost of living equivalence scales such as the square root equivalence scale show that if a value of ‘1’ is used for a single person family unit, then the value of ‘1.4’ is applied to two adults, ‘1.7’ is used for two adults one child, ‘2.0’ is used for two adults two children and ‘2.2’ is used for two adults three children.

CONCLUSION

It is pathetic that marital status continues to be used a standard for tax, hiring and income policies when this is a direct violation of human right and civil rights. It is absurd how married or coupled family units (including the Trumps) continue to protect their own interests without including all family members in financial formulas and favouring married family units over single person family units.

Ivanka Trump says married women are being paid less than single woman. If one considers that most of management and business persons who do the hiring and determine the income schedules are married, then married people are the ones guilty of committing the wrongful acts against themselves, so don’t go blaming singles for this! There are many who do not like unions, but at least they pay the same wage for the same work without inclusion of marital and sex status.

Married and coupled women with children want it all. They want employment time off for their children and then want full compensation even for the years they haven’t been working. If married women take time off to be with their children, they are not going to have the same level of work experience as a single person who has continuously been employed. When are married and coupled women ever going to realize that they can’t have it all while taking singles down to a standard of living that is lower than theirs?

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

REWARD PROGRAM DISCRIMINATION OF SINGLES AND POOR FAMILIES CONTINUES

Posted on July 21, 2016 by ffswpadmin

REWARD PROGRAM DISCRIMINATION OF SINGLES AND POOR FAMILIES CONTINUES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

(lost-dollar-value-list-to-date-and-financial-discrimination-of-singles)

Previous blog post on March 10, 2016 (programs) described how rewards programs generally discriminate against singles and poor families. The example used was Sobeys/Safeway. The discrimination of these programs continues. This post describes another example involving Sobeys/Safeway.

The Sobeys/Safeway flyer from July 15 to 21, 2016 provides three items that are obtusely financially insensitive and discriminatory against singles and the poor.

One item was Breyer’s Classic Ice Cream where purchaser had to buy four 1.66 litre ice creams to get 50 bonus air miles. The second item was 6 roll Sponge Towels where purchaser had to buy two to get 50 bonus air miles. The third item was Lucerne Milk where purchaser had to buy two 4 litre jugs of milk to get 30 bonus air miles.

Just what are single persons or poor families with limited budgets supposed to do with two big jugs of milk that have short expiry dates? Just what are singles supposed to do with four 1.66 litres of ice cream when they have limited storage space in their tiny freezer compartments? At least the sponge towels don’t have an expiry date or a short shelf life.

Purchase of all three items would give 130 bonus air miles which is equivalent to almost $13 of free groceries.

It is socially, morally, ethically reprehensible and irresponsible for businesses that deal with one of the necessities of life (food) in Maslow’s hierarchy of needs to be only concerned about what “the market can bear” and “food sales are based on volume”. It is reprehensible and irresponsible to give the ability for one family unit, especially the middle class and wealthy, to benefit over others.

There already has been a comment online about this issue and the writer has given Sobeys one star out of five. Sobeys has made headlines about how difficult the amalgamation with Safeway has been. Financial and amalgamation problems should not cause businesses to put in ridiculous and discriminatory programs that give a greater financial advantage to the rich and wealthy family units.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

AFFORDABLE HOUSING NOT PART OF CONSERVATIVE PARTY DEFINITION

Posted on July 17, 2016 by ffswpadmin

AFFORDABLE HOUSING NOT PART OF CONSERVATIVE PARTY DEFINITION

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

“Creb now” (published by Calgary Real Estate Board) June 24 to June 30, 2016 states:

‘housing officials increasing rates of overcrowding or “underhousing” in Calgary’s housing market….Resolve says about 3,500 Calgarians were considered homeless in a recent survey, with about 14,000 at risk for homelessness – and that doesn’t include people “couch-surfing”…we know fundamentally that number is up. It’s hard to get a handle; people are one paycheque away (from homelessness) or aren’t in appropriate housing.’

Appropriate housing definition is interesting.

‘Under the Social Housing Accommodation Regulation, such housing is considered overcrowded if more than two people must share a bedroom, with at least one individual in each of the other bedrooms, and if an individual over 18 “must share a bedroom with another member of the household,” or someone over the age of five has to share a bedroom with “an individual of the opposite sex.” (Spouses or partners sharing a bedroom don’t count)…..”Affordable housing is intended to be appropriate housing-appropriate to needs of families. If children age in place or additional children are welcomed into a family, they can transfer within the system…subject to availability.”

“Calgary Herald”, June 29, 2016 ‘City takes aim at failing affordable housing plan” states:

‘just 1,048 new affordable housing units created in Calgary over the past 14 years, the need for affordable housing was great in 2002 and it remains so today. Calgary has half the amount of affordable housing as the national average, and a total of zero affordable housing units have opened in the city in the past three years….the city wants to see 1,500 affordable housing units built in the next two years – more than the number built in the past fourteen years – and staff believe it’s a goal that’s possible given money pledged from the provincial and federal governments, both of which have recently signalled a renewed commitment to affordable housing. Housing a homeless person has been shown to save taxpayers $34,000 annually….Currently 88,000 Calgary households earning less than $60,000 are in need of affordable housing.’

ANALYSIS

Married or coupled family units tell singles to go live with someone if they are having financial problems. According to the definition above of appropriate housing this means singles appropriately should not live in a one bedroom apartment with one person couch-surfing, but should live in at least a two bedroom apartment. By the above definition married or coupled family units with no children can live in a one bedroom apartment.

Affordable housing units of 1,048 divided by 14 years equals only a total of about 74.9 affordable housing units having been developed annually in Calgary. In fact, zero units were opened in the last three years. Calgary has 1.23 million population as of 2015. The number of affordable housing units for a city this size is pathetic.

Alberta has essentially been under Conservative government for many years. Alberta had a Conservative party in leadership for 40 years until New Democratic Party won the election last year. During the Conservative reign (particularly in the latter years) money was squandered in what were essentially boom years because of the oil boom. Oil, government and business persons and families became wealthy because of Conservative policies which favoured the rich. The Conservatives always talked about the Alberta Advantage. Federally, the Conservative party was in leadership for ten years until the Liberals won the election this year.

Right wing Conservatives have done nothing to provide affordable housing for singles and poor families except to line their own pockets and the pockets of their voters. Just what is the purpose of politicians and political parties if they don’t provide government by the people and for ALL the people? Singles and the poor are not considered to be part of the ‘people’ definition. There never was an Alberta Advantage for singles and poor families, only for the rich and the middle class.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

MARRIED OR COUPLED FAMILY UNITS MORE ABLE TO WORK THEMSELVES TO RICHES WHILE SINGLES WORK THEMSELVES TO ‘DEATH’

Posted on July 13, 2016 by ffswpadmin

MARRIED OR COUPLED FAMILY UNITS MORE ABLE TO WORK THEMSELVES TO RICHES WHILE SINGLES WORK THEMSELVES TO ‘DEATH’

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

The July 3, 2016 post “Boutique Tax Credits Pushing Singles Into Poverty-Part 2 of 2” (credits) outlined how married or coupled family units are generally able to achieve greater wealth because of tax credits. This post will discuss how married or coupled family units with multiple sources of income will likely achieve greater wealth than singles with multiple sources of income. To achieve the same level of wealth as married or coupled family units, singles would have to work themselves to ‘death’ while paying more income tax.

Case #2 used information from Financial Post Personal Finance Plan, March 24, 2016 “Couple Sick of Existing Like College Students Are Living Below Their Means, But Could Use Financial Tuneup” (financialpost). This case shows how this married family unit, Mark 45 and Cathy 43 with two kids 9 and 12, have already achieved equivalent millionaire wealth in their 40s. They bring home income of $8,670 per month from two jobs and two rental properties. Mark’s job is part time and tenuous. He travels to northern Ontario for his job and to service the rental properties They say ‘we live like college students, and we are tired of it.’ Financial advice is given on how they can retire at age 65, keep all their properties and have surplus income for travel and pleasure that they now forego.

One could say that some married or coupled family units will work themselves ‘silly’ (like college students) while singles are often told they are spendthrifts, selfish and don’t work hard enough. In order for singles to achieve the level of wealth this couple has, they would have to work two or three jobs, pay more tax and not get the same tax credits this couple does. In other words, they would have to work themselves to ‘death’ or to poor health.

Just one example of taxes that all family units most likely will have to pay is 2015 federal taxes of 15% on taxable income up to $44,701, 22% on income $44,701 to $89,401, 26% on income $89,401 to $138,586 and 29% over $138,586. It is agreed that each person in family units of singles or married family units pay the same taxes per employed person; however, the married family units with children will get multiple family tax credits, thus paying less tax.

CONCLUSION

It is absurd how singles are perceived to be able to achieve same financial success as married or coupled families unit with children, but when observations using cold, hard down to basics math are used, it quickly becomes apparent that singles and early divorced (with and without children) are unable to achieve same financial success except with $500,000 salaries, huge inheritances or winning the lottery.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

FINANCIAL POST PERSONAL AND FAMILY FINANCIAL PROFILES STAR RATINGS-Part 2 of 2

Posted on July 10, 2016 by ffswpadmin

FINANCIAL POST PERSONAL AND FAMILY FINANCIAL PROFILES STAR RATINGS-Part 2 of 2

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.)

(six-reasons-why-married-coupled-persons-are-able-to-achieve-more-financial-power-wealth than singles)

(Andrew Allentuck from the Financial Post oversees the personal and family finance profile evaluations. Anyone can submit their financial profile to the Financial Post for analysis by a financial planner. Some of these cases have been used in this blog. It is helpful to know the background behind these financial analyses. In Part 2 of 2 the following information outlines the top ten questions that the Financial Post receives regarding these financial profile evaluations. The blog author’s comments re questions are entered below some of the questions.)

Financial Post, December 22, 2012 “THE TOP 10 FAMILY FINANCE QUESTIONS OF 2012 (financialpost)

‘….In hundreds of letters to Family Finance requesting assistance and commenting on the problems folks face in paying their bills, 10 top issues emerged:

Debt…a 1.0% interest rate increase on a home equity line of credit will turn a $100,000 interest-only loan floating at 3.5% or $3,500 to a heftier $4,500 a year…
Tax shelters Inability to make the most of RRSPs, RESPs, TFSAs and, for those who qualify Registered Disability Savings Plans (RDSPs) spurred many readers to ask how they could sock away more money and which choices in the alphabet soup of these plans would be most tax efficient.
Downsizing Family transition from children to empty nests and the need to raise cash for retirement spending came up in more than half of our cases. The amount of money that can be raised or the amount of debt that can be liberated depends on the market price of home or cottage. Where prices are very high – think Vancouver, Victoria, Calgary and Toronto – readers sensed that they could take a profit over cost, especially if they had owned the home for many years, pay debts and have cash left over for a smaller home or for renting….’

Comment: The unfortunate truth is that many seniors (married or coupled and widowers) living in their expensive big homes do not want to downsize. Many financial assistance programs have been implemented included house tax assistance and renovation assistance. Many singles and poor families, however, do not have the ability to own big expensive homes. Singles are told they can move or go live with someone if they have problems with housing. It is primarily only wealthy families that have cottages or second properties, motorhomes and other expensive toys.

‘Children Couples and those expecting a first child wrote in dozens of cases to ask what is the cost of raising a child. A 2011 study by the Manitoba Department of Agriculture suggested that a child born in 2010 would set its parents back by $191,665…..’

Comment: Some statistics give a figure of $250,000. To 18 years of each child, this amounts to $13,889 per year and $1157 per month. It is difficult to understand why parents (beyond replacing themselves with two children) would have three, four, five children when they know they won’t be able to support themselves and their children within the parameters of their budgets and salaries. When it is known that there is a world population explosion and the earth will not be able to sustain this population explosion, why would responsible parents have more than two children?

‘Boundaries It is one thing to know the statistics of child-rearing expense and another to manage it. Readers asked many times how much they could afford to give their kids for RESPs and for activities while at home. It was common to find cases in which parents, strapped for money, spent $400 to $500 a month for sport yet could have cut down on hockey and put enough money into RESPs to qualify for maximum government grants. Indulgences included foreign travel with parents and money for cars for teenagers. When the parents wound up strapped for cash, it was clear that they had failed to set boundaries on what they would spend and what they might ask their older children to earn to support their sports, hobbies and travel.’

Comment: Straight from a financial person’s mouth-married or coupled families with children often don’t set boundaries in reality to what they can afford. However, singles are often told they spend too much and are selfish even though they don’t have the same financial income and assets as married or coupled families with children.

‘Limits to portfolio growth
Understanding risk
Insurance Virtually every reader has insurance for his home and car, but life insurance is another matter. A third of our readers need more insurance than they have to cover to risk that the single breadwinner in a family could die prematurely. Another third have inappropriate coverage with costly whole life that builds cash value slowly, or universal life they (and many financial analysts) can’t understand. The remainder need to adjust their coverage up or down with how their lives have changed. The math within life insurance is complex, the tax breaks that life insurance can afford are valuable, and the protection against many creditor claims life insurance can provide are precious, but few readers understand how intricate a product life insurance is.’

Comment: Life insurance should be made mandatory for all married or coupled family units, just like home and car insurance. Life insurance should replace all boutique tax credits directed towards widowers as they are now technically ‘single’. Ever singles and divorced persons do not get benefits that widowers get and are, in fact, helping to support widowers with these benefits. Also, education on term insurance as the most cost effective insurance needs to be promoted.

‘Retirement age A generation of readers grew up aspiring to retire at age 55. Two-thirds of the letters to Family Finance raise the question of how they can get enough money to retire then or a little later. Today, the mid-50s goal is so 1980 – before the crashes of the dot-coms, 9/11 and the 2008 debt crisis. In fact, few readers have sufficient capital to make it to 55. Instead, working another decade to 65 or even 67….is necessary. Working longer not only allows more savings, it postpones the time that retirees have to start drawing down their capital. Working longer also provides a reason to get up in the morning, maintains associations, and even sustains credit ratings. Full retirement at age 55 is an idea whose time has come and gone for most.’

Comment: Again, straight from a financial person’s mouth-married or coupled family units seem to believe they can retire early after having received multiple family tax credits, and then be able to pension split without paying very little for these credits. Many singles have to work longer while paying to help support married or coupled family units and the multiple tax credits they receive. Singles receive very little of these tax credits.

‘Make a budget Many requests to Family Finance ask for help making a budget. Readers regard having a set of rules as a key to meeting savings goals for their kids and retirement. Where cash is tight, a set of rules for the road is surely a good idea. Just thinking about what categories of spending should have various allocations each month is helpful. Mundane it may be, but writing a budget can be a first step to sound family finance.’

Comment: Everyone should have a budget. In addition to family budgeting, parents need to teach their children about budgeting, the Rule of 72 and what the real costs are for items like expensive sports activities. If singles are thought to be spendthrifts and selfish, maybe it is because their parents never taught them anything about finances. Or, maybe it is because married or coupled family units with children don’t even to try to understand what it costs single persons to live once they leave home. More married or coupled family units with children need to educate themselves on all the benefits they receive, how little they are paying for these benefits and what it is costing other family units like singles to support these benefits that they, themselves, do not receive.

CONCLUSION

It would be helpful if all citizens learn to take responsibility for their own financial well-being instead of looking to others to support them in the form of government tax credits. The present upside down financial situation of giving to the wealthy (particularly married or coupled or family units with children) while making them pay less needs to be reversed so those who truly need assistance receive this assistance (poor singles and poor families with children). It is absurd that the wealthy are accumulating huge inheritances like TFSA accounts without paying taxes on these accounts. It is absurd that the wealthy parents want to leave huge inheritances for their children, but do not wish to give up assets like big houses while receiving tax credits such as house tax financial assistance and pension-splitting. It is absurd that governments do not take into accounts assets as well as income when handing out tax credits.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.)

FINANCIAL POST PERSONAL AND FAMILY FINANCIAL PROFILES STAR RATINGS-Part 1 of 2

Posted on July 6, 2016 by ffswpadmin

FINANCIAL POST PERSONAL AND FAMILY FINANCIAL PROFILES STAR RATINGS-Part 1 of 2

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice).

six-reasons-why-married-coupled-persons-are-able-to-achieve-more-financial-power-wealth than singles.

Star ranking system as stated by Allentuck is as follows (top rating is five stars):

Financial Post, December 21, 2013 “HOW MANY STARS DOES YOUR RETIREMENT DESERVE?” (financialpost)

*One star means the potential retiree is in a troublesome place. Few people who write to Family Finance are in the level at which there is no way to sustain a way of life without such major transformations as selling a home to raise cash, working to age 68, 70, or even 72 or telling children for whom money has not been set aside for post secondary education that they will have to finance it on their own.

In this category are people with business failures from which they have not recovered, low paying jobs, and modest savings. Some one star cases involve what may be called “elective poverty”. The result is that the individual will have no hope of maintaining the present, rather modest standard of living.

Blog Author’s comment: That ‘few people who write to Family Finance are in this level’ explains why there are so few singles without children in these profiles. Many singles and the poor fall into this category. They are often told they cannot afford to buy a house and put money into savings. They can only do one or the other, not both at the same time. Singles are often told they have to work longer than married or coupled person families to achieve a decent retirement lifestyle. Many families with children seem to make bad financial choices like putting their boys into hockey or going on yearly family vacations instead of, for example, maxing out RESP contributions to get the government grant.

**Two stars means that present savings and pensions will be insufficient to maintain a desired way of life, but that with time, perhaps restructuring of debt to eliminate loans with double digit interest rates, perhaps sale of a cottage and downsizing to one car, a retirement plan will be reworkable. Some Family Finance cases get two stars as a result of divorce splitting assets that would have been adequate for two people sharing expenses but that are inadequate when savings have to support two homes and when, as a result of loss of spouse, pension splitting is no longer possible.

Blog Author’s comment: For singles and the poor the sale of a cottage is out of the question because they have no cottage to sell. Straight from a financial person’s mouth – some profiles ‘get two stars as a result of divorce splitting assets that would have been adequate for two people sharing expenses but that are inadequate’ to support an individual and pension splitting is no longer possible. This blog has stated over and over again that married/coupled family units require less money to live and pension splitting is financially discriminatory to singles and poor. Singles are not able to pension split and poor families receive less value from pension splitting than wealthy married or coupled persons. Many singles and poor families get two stars simply because they are financially discriminated against by not receiving equal benefits to wealthy married or coupled family units.

***Three stars means that a person or couple is on track for retirement as planned. Debts may have to be reduced or a job stretched for a few more years, but time will be an ally. A modest rate of return on conservatively invested assets and continuing or perhaps increased savings rate will achieve sufficient capital to produce investment income, perhaps bolstered by expected benefits from government and private pension plans. At this level, it may be necessary to trim expenses to raise the rate of savings, but the machinery for a satisfactory retirement is in place. It may be useful to suspend savings to pay down debt, then, when money is no longer draining to pay interest, to restore savings and add what has been spent on debt service to retirement savings. This financial engineering works on a solid foundation for asset growth. Most Family Finance cases get this average but satisfactory rating.

****Four stars means a retirement plan is well conceived and that restructuring of savings or assets or lowering of expectations will not be needed. There may be a need to reduce the costs of generating income, for example, by shifting from mutual funds with high fees to exchange trade funds with low fees. This level is an adjustment process, not a restructuring of personal finances. Many people with defined benefit pensions get four stars. Their pensions are managed by experts, the management fees they pay are low and payments are guaranteed no matter what happens, for investment risk is borne by managers, not beneficiaries.

Blog Author’s comment: Regarding statement ‘many people with defined benefit pensions get four stars’, benefits received from defined benefit pensions depend on how many years employee has contributed to the pension plan. A few years of contributions will yield a very small pension. Also, married or coupled person family units fail to realize that singles get less from defined benefit pensions because they have to pay more taxes on their pensions and cannot pension split. Defined benefit pensions are inherently financially discriminatory to singles because survivors of the spouses get survivor benefits, but survivors have not contributed to the plan. When spouse of plan deceases then whatever is remaining should be willed to the surviving spouse, just as single’s remaining benefits are willed to his or her estate. Surviving spouse should treated equally to a single, after all, they are now ‘single’.

*****Five stars means that the person or couple will have sufficient income for living as planned. If nothing changes, the plan will work and sustain income at the required level. The five star evaluation is, in a sense, a level at which people with average jobs will not have suffered such crises as asset division in divorce, major investment loss or ill health forcing premature retirement. Structurally, at the five star level, retirement income source are diversified with substantial pensions and a clutch of investments to provide discretionary income. Most people with five stars have defined benefit pension plans and almost all have two breadwinners.

Blog Author comment: It seems most profiles presented in the Financial Post do not achieve five star status even with a million dollars or more in assets. Again from financial person’s mouth, in regards to two breadwinners, it is almost inherently impossible to a singles to achieve same financial retirement wealth as married/coupled persons unless they ‘work themselves to death’ with addition of part time or full time job in addition to regular job. Many single parents are forced to work more than one job to make financial ends meet.

Allentuck provides the following methodology for rating retirement readiness:

Savings rate: if savings are 10% or more of disposable income, score 1 point, if 20%, 2 points, if 30% 3 points, etc. If less than 10% of disposable income, then no stars.
If job has a defined benefit pension, add 3 points. If indexed plan, add 1 more point.
If there are no significant debts other than credit card charges paid each month, add 2 points. If debt service costs are 20% or more of take home income, take off 1 point, if 20% of take home income, take of 2 points, etc.
If spouse can split eligible pension income, add 1 point. If no spouse to split, take off 1 point.
If you have ten or more years to retirement add 2 points. If less than 10 years, add 1 point. If retired, 0 points.
If total investments both registered and non-registered less debts equal 20 or more times estimated annual pre-tax retirement income, add 5 points. If 15 times estimated retirement income, add 4 points. If 10 times, add 3 points. If less than ten times estimated retirement income to two times retirement income, there are no points. If negative net worth, deduct 5 points.
If total after tax retirement income is 120% of estimated retirement expenses, add 2 points, if 100% of retirement income, add 1 point. If 90% of retirement income, take off 1 point for each 10% it is less than estimated retirement expenses.
TOTAL: If you have 10 points or more, you would probably get 5 stars.

Blog Author’s comment: The five star rating and point system is interesting and does provide value in determining retirement readiness. It also shows some of financial discriminatory aspects that governments perpetuate against singles and poor families. The system also continues to hide salient details as to why singles and the poor face financial discrimination and are unable to attain same financial power and wealth as married or coupled family units.

Savings rate: Only the wealthy will receive top points because they have the most disposable income. Defined pension benefits: Benefits received depends on how many years of contribution there were and, as stated above, pension plans are inherently financially discriminatory to singles and the poor. Three points will have more value to a married or coupled family unit than they will to singles because of this discrimination. Pension splitting: Straight from financial person’s mouth, pension splitting is financially beneficial to married or coupled family units. Singles will never get this point and, in fact, will lose one point because there is no spouse to split pension income with. Total Investments: The wealthy and married or coupled family units generally will have been able to accumulate more investments than singles and the poor; therefore, they will get more points in this rating system. Total after-tax retirement income: It is interesting to note many of the married or coupled family units profiled in the Financial Post cases will have even more retirement income with less expenses than while earning income and raising children. This is because they are able to accumulate more wealth and have received many government benefits, so they will receive more points.

It is ironic that singles most likely are inherently excluded from receiving a total of five stars because they receive less value from their defined benefits pensions and can never get the one point for pension income splitting and actually have to take off one point. As stated those most likely to receive five stars have two breadwinners as opposed to one.

Financial Post, December 26, 2012 “THE MAKING OF FAMILY FINANCE” (financialpost)

QUOTE: ‘The question is a common thread in our email messages and Web comments: Why don’t you look for real problems of lower-income people who really need free financial advice? For the record, the after-tax income of about 50% of those who ask for our help is in the range of $58,000 to $65,000 for families with two parents working and $45,000 to $55,000 for single people seeking our help. About 30% have incomes between $100,000 and $200,000 a year.

We hear from a few people, about 5% of inquiries, with incomes over $200,000. And 15% have incomes below $35,000 a year. So the vast majority of the 40 inquiries or so we receive every week fall between $58,500 and $200,000 a year.

We take on few cases of folks with incomes over $200,000 since, at that level, people can afford accountant and portfolio managers.

Those on the lower end of the scale also often fall off before reaching the final stages of our analysis because for many there is just no constructive advice on debt management and investment solutions to be offered. When money is so tight, there is little room for creativity and finessing financial plans.’

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

BOUTIQUE TAX CREDITS PUSHING SINGLES INTO POVERTY-Part 2 of 2

Posted on July 3, 2016 by ffswpadmin

BOUTIQUE TAX CREDITS PUSHING SINGLES INTO POVERTY-Part 2 of 2

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

six-reasons-why-married-coupled-persons-are-able-to-achieve-more-financial-power-wealth

(The last two posts discussed how detrimental boutique tax credits can become to the financial well-being of a country and its citizens. These were based on ‘Policy Forum: The Case Against Boutique Tax Credit and Similar Expenditures’ by Neil brooks (abstract).

This post itemizes four personal finance cases showing how certain family units may benefit far more than other family units like ever singles and singles with children).

CASE 1 – Financial Post Personal Finance Plan, June 11, 2016 – ‘Farm Plan Risky for Couple with 4 Kids’ (financialpost)

Ed age 32 and Teresa 33 have four children ages 5, 3, 1 and newborn in British Columbia. Ed works for a government agency, Teresa is a homemaker. At age 32 and 33, already have a net worth of $502,000 ($208,000 home not in the Vancouver area fully paid and $177,000 land with $37,000 (21%) mortgage. They would like to sell their house, move out of town and set up a small farm. Ed would give up his government job and secure income by selling eggs and produce. Would like to retire with about $4,000 in present-day dollars and after tax.

Ed brings home $2,680 per month plus tax-free Canada Child Benefit (CCB) $1,811 for their four children, all under the age of 6 for total family disposable income to $4,491 per month (CCB is about 40 per cent of take-home income. (When all four children are ages 6 to 17, the CCB will be $1,478 a month based on 2016 rates).

Financial Planner’s Recommendations – Maximize Registered Education Savings Plans (RESP), so they can capture Canada Education Savings Grant (CESG) of $500 per beneficiary for total of $7,200 (three per cent annual growth after inflation would generate about $270,000 or about $67,500 per child for post secondary-education). Advice is that Ed continue working until the age of 60 and when the youngest child is 18. Advice is also given for purchase of the farm, details of which will not be discussed here. Each spouse would add $5,500 to their TFSAs for every year until Ed is age 60.

At retirement, if Ed retires at age 60 and Teresa continues as a stay at home spouse, in 2016 dollars they would have a total pre-tax income of $68,495, or $5,137 per month to spend after 10 per cent tax and no tax on TFSA payments. At age 65, they would have total income of $86,163 with no tax on TFSA payouts and pension and age credits or $6,460 a month to spend.

If they follow financial planner advice for retirement at age 60 and maxed out contributions of RESPs and TFSAs, rough calculations show they will have received approximately $339,000 child benefits, $308,000 tax free TFSA savings and $28,800 RESP government grants for total $675,800. This does not include all possible benefits from other sources such as provinces, GST/HST credits and interest generated from investments. If Ed is deceased before Teresa, as a widower Teresa will receive even more benefits as a survivor with survivor pension benefits.

All things remaining the same their assets at age 60 with farm/house $485,000, RRSP $48,000, and TFSA $349,000 will equal a total of $882,000. So, at age 60 they will have assets close to millionaire status while paying very little in taxes. (Financial Post rating – two stars out of five).

CASE 2 – Financial Post Personal Finance Plan, March 24, 2016 ‘Couple sick of existing like college student are living below their means, but could still use a financial tuneup’ (financialpost)

Ontario couple Mark 45 and Cathy 43 have two kids 9 and 12 and bring home $8,670 per month ($7,000 from jobs and net rent income $1,670 from two rental properties that produce good income in North). At ages of 45 and 43 they already have assets of $1,480,272 including RRSPs of $300,322, liabilities of $536,315 for net worth of $943,957. Their two cars are 10 and 15 years old. They feel like they are living like college students. Mark’s job is not secure and produces a lot of stress. They have not contributed to children’s RESP and 130 year old house requires repairs.

Financial planner advice is to restructure their finances, put money into RESPs for children and maximize RRSPs. Both spouses have defined benefit pension plans from past employment..

At retirement pensions, RRSP, rental income and CPP/OAS at age 65 would generate pre-tax income of $105,672. After age and pension splitting, after-tax income at 16% tax would be about $7,400 a month. Financial planner states they would have surplus income for travel and pleasure which they now forego, (plus they will still have assets of home and rental properties). (Financial Post rating – four stars out of five).

CASE 3 – Financial Post Personal Finance Plan, May 21, 2016 ‘Home Ownership Possible but Tight’ (financialpost)

Jessica, age 54 lives in Ontario and has three grown children. She would like to buy $150,000 house in small town Ontario. Assets are $40,000 LIRA, $2,400 in TFSA, $10,000 RRSP and $19,000 in company defined contribution pension plan, car $10,000 and debts of $10,700 for $70,400 net worth total. Her take home pay is $3,315 per month. She puts $240 in TFSA, $100 in RRSP and $300 in non registered account per month. “Her outlook is to retire in 10 years, but that will be struggle. She has to make a middle income (so stated) go a long way”.

Financial planner advice is to pay off debts in nine months. Advice is given for purchase of a home with three per cent twenty five year mortgage and saving for retirement but it will be on a financial shoestring. At retirement and after age and pension credits and 10% tax, she should have take home pay of $2,300 per month. Final comment: “her retirement will be hostage to unexpected expenses. But she will have the security of a home of her own”. (Financial Post rating two stars out of five).

CASE 4-Public Service Canadian employees

In same job/wage categories with 2013 annual income around $67,000 for never married singles, no children (calculations may vary slightly in provinces regarding tax and other deductions) approximate payroll deductions include income tax $11,000, CPP and EI $3,200, union dues $900, public pension contributions $5,300, RRSP deductions $3,500, parking $1,200, health premiums and insurance $600, for total of $25,700. This leaves $41,300 take home yearly income or $3,441 per month.

CONCLUSION

The above four cases show four distinctly different cases, two family units with children, one single parent family unit with children and one family ever single family unit.

It is astounding how two parent family units with children can accumulate wealth while single parent and unattached person family units struggle to live on on $3,300 and $3,400 after tax dollars per month or $39,600 and $40,800 annually while working and into their retirement years.
It is absurd that tax credits should comprise 40 per cent of a family’s income when they have the ability to become wealthy enough to not have to pay mortgage or rent. In some provinces, singles cannot have assets of more than $7,000 to get affordable housing, so why should families have assets of half a million dollars and still get full child tax credits?
It is absurd that a family unit never pay full taxes at any time during child rearing years only to have the ability to retire early at age 60 and have more retirement income than they had during child rearing years and have paid little or no taxes.
It is absurd to claim poverty because of what it costs to raise children when in age thirties and forties family units with children already have assets of half a million dollars and higher.
It is absurd that married/coupled family units with children in retirement pay less than 20 per cent in taxes on very healthy retirement incomes because of pension spitting and other credits. Where is fairness when they pay same or less level of taxes as singles on lower incomes?
Financial planner calls Jessica’s income middle class, but she has difficulties living on it.
Married or coupled family units possibly have a much better retirement life than singles in family units with and without children. (Singles with children generally have the greatest financial struggle).
Life during working years is just as difficult for singles as it is for married or coupled family units.
Government, politicians and families need to consider all family units in financial formulas. These should be based on equivalence scales to provide financial fairness for all family units. Financial fairness should include not only income, but also assets.
It should also be stated that when examining many of the Financial Post profiles for divorced persons with children, particularly those beyond child rearing years, many appear to have assets beyond $750,000. How is this possible? One reason might be inherited wealth. Second reason which has been stated over and over again in this blog is the ability for married/coupled persons with children family units to gain wealth and, therefore, already have considerable wealth when they are divorced later in life.

LESSONS LEARNED

IT IS INHERENTLY WRONG FOR GOVERNMENTS TO NOT INCLUDE ASSETS AS WELL AS INCOME WHEN DOLING OUT TAX CREDITS. THESE CREDITS SHOULD BE GIVEN TO THE POOR, NOT THOSE WITH LOW INCOME AND WEALTHY ASSETS. BETTER YET, TAX CREDITS SHOULD BE COMPLETELY ELIMINATED AND REPLACED BY TAXES WHICH ARE BASED ON INCOME AND ASSETS.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).