POLITICAL PARTIES HAVE ‘CHICKENSHIT CLUB’ MEMBERSHIPS BECAUSE THEY TAKE THE EASY WAY OUT ON SOCIAL INJUSTICE AND INEQUALITY

POLITICAL PARTIES HAVE ‘CHICKENSHIT CLUB’ MEMBERSHIPS BECAUSE THEY TAKE THE EASY WAY OUT ON SOCIAL INJUSTICE AND INEQUALITY

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

(Blog author’s comment:  The topic of financial discrimination of singles and low income families has been addressed from many different angles in this blog.  This particular blog post shows how compounding of benefits on benefits such as Registered Retirement Savings Account (RRSP) combined with a tax free Canada Child Benefit (CCB) allows wealthy families with children who can afford to max out RRSPs to benefit the most from reduced taxes, increased income, and increased wealth.  It also shows how governments and politicians fail to right the biggest social injustices and financial inequalities by going after the easiest targets.

WHAT IS THE ‘CHICKENSHIT CLUB’

Jesse Eisinger in his book ‘The Chickenshit Club’  gives a blistering account of corporate greed and impunity, and the reckless, often anemic response from the Department of Justice.  He describes how James Comey, the 58th US Republican Attorney (appointed by Republican George W. Bush and fired by so called Republican Donald J. Trump) was giving a speech to lawyers of the criminal division.  These lawyers were some the nation’s elite. During his speech, Comey asked the question: “Who here has never had an acquittal or a hung jury? Please raise your hand.” This group thought of themselves as the best trial lawyers in the country.  Hands shot up. “I have a name for you guys,” Comey said. “You are members of what we like to call the Chickenshit Club.”

Comey had laid out how prosecutors should approach their jobs.  They are required to bring justice. They need to be righteous, not careerists.  They should seek to right the biggest injustices, not go after the easiest targets.

This ‘chickenshit club’ has continued to grow.  No top bankers from the top financial firms went to prison for the malfeasance that led to the 2008 financial crisis. And the problem extends far beyond finance–to pharmaceutical companies, tech giants, auto manufacturers, and more.

DPAs (deferred prosecution and nonprosecution agreements) have become the norm in the USA (and now is being legislated in Canada) where high crime perpetrators are being given the easiest way out by ensuring prosecution is carried out by paying a nominal fine and agreeing to minor policy changes, but without serving any jail time.

Political parties have joined the ‘Chickenshit Club’ by taking the easiest way out and failing to promote social justice and equality for all therefore ensuring that wealthy households and corporate elites continue to increase their wealth over single person and low income households.

The ‘Chickenshit Club’ of low income and food insecurity and minimum wage

Living Wage and Minimum Wage

It is a known fact that the Canadian minimum wage in all provinces is not sufficient to bring households up to middle class status.

A major failure of Living Wage research is that it usually only identifies three household profiles, a single person, single parent with children and a family comprised of two adults and children.  The failure to include a household of two adults no children provides only a partial picture of inequality because it costs a single person household more to live than a two adult persons household.

Review of Living Wage profiles shows that even though living wages are higher than minimum wage, living wages are “no walk in the park”.  A living wage which only covers basic needs still leaves low income households, especially those with rent or mortgages, suffering a ‘no frills’ lifestyle with an inability to save for retirement or emergencies or replacement of vehicles.

By excluding the two adults no children household profile from Living Wage profiles the single person household is an incomplete profile since it costs more for unattached person to live than the two adults household as shown in cost of living scales like Market Basket Measure (MBM).  Example:  if single person household has a value of 1.0, lone parent, one child or two adults household have a value of 1.4, one adult, two children 1.7 and two adults, two children 2.0.  It costs more for singles to live than couples without children.

Many politicians, married and financially illiterate believe that a living wage is a good income but it only provides the bare necessities of life. The living wage in Calgary is about $18 per hour and in Metro Vancouver is about $19 per hour.  There is no saving for retirement or maxing out of RRSP and TFSA accounts on a living wage (see example below for single person household with $50,000 income).

In a recent Conservative meeting, a Canadian Conservative Member of Parliament for Alberta stated he did not think the recent increase in minimum wage helped anybody, not even the poor.  When challenged that ‘this was quite the statement’ and ‘what was the answer to low wages?’, he said ‘he didn’t know’. As outlined below, the upside financial chickenshit mess that has been created by government and politicians for single person households and low income families is because more benefits with less taxes and no declaration of assets has been given to the wealthy and the married.  To create more financial social justice and equality, a drastic plan along the the lines of “Elizabeth Warren” and “Bernie Sanders” is needed so that the wealthy, married, and corporations pay their fair share.

The ‘Chickenshit Club’ of Single Person Household Poverty

Present day political parties and married/two person households with no children belong to the ‘Chickenshit Club’ when they fail to recognize, through financial illiteracy and financial discrimination, that single person no children households will likely face more income insecurity in their lifetimes.

From The Affordability of Healthy Eating in Alberta 2015 by Alberta Health Services (affordability-of-healthy-eating):

(Page 3) “In Alberta, more than 1 in 10 households experience food insecurity and more than 1 in 6 children live in a home where at least one member is food insecure. Nearly 80% of Albertan households who rely on social assistance cannot afford to purchase adequate amounts of nutritious food or regularly endure significant worry about access to food. Furthermore, more than 75% of all food insecure Albertans are actively employed yet still are unable to secure enough money to support both their nutrition needs and other indispensable life necessities, such as housing and clothing.”

(Page 9) The above report provides a more complete picture of income inequality because it identifies four household types – 1) a family with two parents and two children because this composition is used most frequently by other social, income and poverty reports across Canada, 2) a female lone parent due to the high prevalence of food insecurity among this household type, 3) a single adult under age 65 since this demographic experiences the highest rate of food insecurity and the least financial support through social policy, and 4) a single senior to highlight the ability of current social policy to effectively reduce the risk of household food insecurity in this population.  Unfortunately, the two adults person household is still not represented in these profiles.

Quote from the report (page 18): “Although Alberta remains the most prosperous region in Canada, it also maintains the largest gap in income inequality since the wealthiest 1% earns 18 times more than the average income in the province. Thus, the relative economic power of low income households in Alberta is weaker than low income households in all other regions across the country.  Despite a strong economy, the poverty rate in Alberta has remained around 12%, which is only slightly below the national average of 12.5%. Boom and bust cycles, increasing household debt and the high number of temporary, precarious and low-wage jobs put many Albertans at risk of falling into poverty. The Alberta populations at highest risk to experience poverty include:  single persons, families with children under 18 years old, families with more than one child, female lone parent families, women (not an inclusive list).

(Page 24 and 27) These statistical data sources also validated several important characteristics of Canadian and Albertan households that are at highest risk for household food insecurity:  low income households, individuals who rent their home (rather than own their home), women, lone parents, Indigenous Peoples, individuals who receive social assistance, individuals who work for low wages, unattached (single) people, households with children younger than 18 years of age, recent immigrants and refugees (e.g. in Canada for less than five years), people who have a disability.

(Page 28) Single adult – In Alberta, 40.7% of people aged 15 and older are neither married nor living with a common‑law partner and 24.7% of all households are home to only one person.  Unattached persons in Canada experience three times the rate of food insecurity compared to couple households without children.  In Alberta, single people represent five times more food bank users than couples without children.  The rate of poverty among single adults across Alberta is 28% whereas this value drops to only 6% for all couple families.

(Page 29) Single female – Unattached Canadian women are four times more likely than women in families to live in a low income household.  Sixty two per cent of minimum wage earners in Alberta are female.  Across Canada, 3 out of every 4 minimum wage earners older than 24 years of age are women.

(Page 30) Single adult 25–30 years old – Of all Canadian age groups, young adults between 20 and 34 years of age have the highest rates of moderate and severe food insecurity.  Both males and females between the ages of 20 and 29 have the highest nutrition needs of all adult groups and would therefore need to spend a greater proportion of their income on food to support their health and well-being.  By the time Albertans reach age 25, more than 83% are no longer living with their parents, so this age range would best reflect the reality of a young, single person at higher risk for food insecurity in Alberta.

(Page 31) Minimum wage – The percentage of 25–29 year olds who work for minimum wage in Alberta doubled between 2012 and 2014, and this is the largest jump for any working age group across the province.  More than 1 in 4 female minimum-wage earners and nearly 1 in 5 male minimum-wage earners are 25 years or older.  In Alberta, inflation has quickly eroded the contribution of every small increase to hourly minimum wage rates since the early 1980s.

(Page 39) Unattached persons in Canada experience three times the rate of overall food insecurity and seven times the rate of severe food insecurity when compared to couple households without children or with adult children. Single people represent the largest proportion in Canada, at 27.8% of all households, and they also constitute the largest share of food insecure homes at 38.2%. Single people without children also receive the least amount of government social support, as they are not eligible for the financial support of programs like family‑based tax credits and health benefits.

(Page 40) Single-person household based on the after-tax, low-income cutoff measure (LICO), the rate of low income in unattached male and female households has risen over the past decade while all other household categories have experienced a stabilized or decreased rate of low income.  Nearly 1 in 3 unattached people between ages 18 and 64 lives below the LICO in Canada, compared to only 1 in 20 of the same cohort living as part of an economic family.  An economic family refers to a group of two or more people who live in the same household and are related to each other by blood, marriage, common-law or adoption. The rate of poverty among single adults in Alberta is 28% but this value drops to only 6% for all couple families.  More than 40% of Albertans aged 15 and older are neither married nor living with a common‑law partner and nearly one quarter of all homes in the province are inhabited by only one person. Between 1961 and 2011, the proportion of one-person households in Alberta has more than doubled and now nearly matches the number of homes with families or couples without children.  Across the province, single people represent one third of all food bank users, and they outweigh couples without children by three and a half times.

(Page 40) Minimum wage is an important social policy because it intends to help lift low-paid workers above the poverty line so they have adequate income to meet basic needs for overall well-being.  However, unlike Canada Pension Plan (CPP) and Old Age Security (OAS), minimum wage is not regularly indexed to inflation through adjustments to match the increase in the Consumer Price Index.  This can lead to a hidden erosion in the value of this social policy since the general public tends to be unaware of how governments calculate changes to minimum wage rates over time.  In 1965, Alberta’s minimum wage equalled 48.5% of the average provincial income, but by 2010 this proportion had declined to only 35.5%. Alberta’s hourly minimum wage rate had been the lowest of all provinces and territories for several years, but recent increases have raised low-paid workers’ earnings to a minimum of $11.20 per hour as of October 2015.

(Page 41) There is a widespread misconception that most Canadians who earn minimum wage are teenagers who live with their parents, but more than 1 in 4 female minimum wage earners and nearly 1 in 5 male minimum wage earners are actually 25 years old or older. In addition, individuals who are older than 24 years of age are the most likely to live alone while they earn minimum wage.

(Page 42) …. In fact, unattached Canadian men and women between the ages of 18 and 64 are five times more likely to live on a low income compared to their counterparts who live in economic families.  Although the probability of living in a food insecure household is higher for females than males across all age groups and household compositions, income-related food insecurity affects unattached men at the same rate as unattached women.

(Page 44) Among all unattached Canadians, there are twice as many single adults younger than 65 years of age living below the after‑tax LICO compared to single seniors who live below this income.  In addition, the prevalence of household food insecurity is two and a half times lower for the elderly who live alone than for unattached adults who are younger than 65 years old.  However, the likelihood that a single senior will live on a low income is 10 times the rate for seniors who live as part of an economic family. This is significant since 25% of Albertans aged 65 years old and older live alone and unattached individuals are the most likely to rely on OAS and GIS.

“Social assistance soaring in Alberta, even as economy improves”, 2017 – Number of claimants on provincial income assistance programs has climbed to 54,374 in January of 2017, about 20,000 higher than at the start of the recession in 2015.  Makeup of claimants include individuals 69%, lone-parent families 24%, couples with children 5%, and couples alone 3%.  (Note:  Couples with children and couples alone only equal 8% of the total).  The Calgary Food Bank served a record 171,000 clients in 2016.

The real truth about the financial lives of unattached (one person) household

A single person household has to make an extraordinarily high income to achieve the same level of wealth as married with and without children households. A minimum wage means they will be living in poverty and with a living wage barely able to meet the financial necessities of life with no ability to max out RRSP and TFSA contributions.

Example of approximate average cost of living for a single person household (easily obtained from Living Wage Research):  Rent for bachelor apartment (including water, electricity, tenant insurance) $1,000, food $400, vehicle (gas, repair and insurance) $200, phone/internet $300, clothing/footwear $100, dental/eyecare $100, house tax and insurance if a homeowner $250, contingency saving for emergencies and replacement of vehicle (10%) $300.  Total equals $2,650 or $31,800 per year ($16 per hour based on 2,000 work hours). Totals do not include other expenses like bank fees, personal care expenses, household operation and maintenance, pets, vacations, entertainment, computer purchases and expenses, gifts, condo fees and professional association and union fees, etc.  Note: this does not include saving for retirement beyond Canada Pension Plan (CPP) contributions. The living wage for Alberta is about $18 per hour based on 35 hour work week or 1,820 hrs per annum. Single person households receive very little income from government transfers (municipal, provincial and federal).

The following three examples, although simplistic, are real life examples for single persons:

  1. Single person private sector employee with $50,000 income ($25 per hour based on 2,000 worked hours) will pay about $11,000 for taxes, CPP and EI deductions.  This results in a only a barely survivable net or take home living wage income of $39,000 ($19.50 per hour based on 2,000 hrs. or $3,250 per month). Using average cost of living of $32,000 from above paragraph, this person only has a reserve of about $600 per month.  It is impossible for this person to maximize RRSP ($9,000) and TFSA ($6,000) contributions (about $1,200 per month) even though many financially illiterate believe $50,000 is a good income for unattached individuals.  Moreover, as seniors their standard of living will likely be frugal and less equal to that of married/common-law households.
  2. Single person private sector employee with $60,000 income ($30 per hour and 2,000 work hours) will pay about $14,500 in taxes, CPP and EI contributions.  This results in a net income of $45,500 ($22.75 per hour or $3,800 per month). This person will not be able to max out RRSP ($10,800) and TFSA ($6,000) contributions (about $1,400 per month).  This still equals a frugal lifestyle (note expenses like vacations and eating out are not included in the average cost of living).
  3. Single person public sector employee with $75,000 income ($37.50 per hour and 2,000 work hours) will pay about $17,000 in taxes, CPP and EI benefits plus pension plan contribution of $7,500 (10 per cent).  Union dues are not included here. This results in a net income of approx. $51,000 ($25.50 per hour or $4,200 per month). This person may be barely able to max out RRSP ($13,500) and TFSA ($6,000) accounts (about $1,541 per month) at the expense of no vacation and eating out expenses and will have a public pension on retirement, but still will not have a standard of living equal to that of married/coupled households since they pay more taxes than married households and will not receive benefits of married persons (spousal RRSP, pension splitting, etc.)  Market Basket Measure shows it costs single person household more to live than married households.

Lessons learned:  A minimum wage of $15 means single person households will live in poverty and a living wage equals a very frugal lifestyle with no frills.

‘Chickenshit Club of women being paid less for equal work

From the above Alberta Report and Canadian statistics it is evident that a major problem still  exists of women being paid less for equal  work.

From Global News, report finds that women in Canada earn just 84 cents for every $1 earned by men, a gap similar to the one reported in official statistics. In 2017, Statistics Canada said Canadian women were making 87 cents for every $1 earned by men.  [T]he Glassdoor study went one step further, finding a four per cent pay differential between men and women even when factors like education, years on the job, occupation and professional title are taken into account. In other words, Canadian women are making just 96 cents for every $1 earned by men with the same qualifications, job and experience, something Glassdoor is calling the “adjusted pay gap.”

How many years is it going to take before women receive equal social justice on pay equity?  Instead of being ‘chickenshit political parties’ which political party is going to take this issue on?

‘Chickenshit Club’ of Canada Child Benefit

The present day ‘chickenshit club’ Canada Child Benefit does help to bring low income households with children out of poverty and food insecurity (this is a good thing), but only during the first eighteen years of the household’s entire lifecycle.  When children are grown, low income single parent households are back to ‘square one’ of the adult probability of living in poverty.

The Canada Child Benefit was implemented by Stephen Harper, previous Conservative Prime Minister, and was taxed.  Liberal Prime Minister Justin Trudeau made it non taxable.

All political parties have been complicit in perpetuating financial policies that increase middle class wealth to upper middle class status while forcing poor families and single unmarried individuals further into poverty.

Financial Post “Couple needs to cash in rental condo gains to make retirement work” (ditch-rental-condo-to-get-ahead) details a couple age 42 and 43 already having a net worth of $1.8 million, take home pay of $10,936 per month and receiving $286 in Canada Child Benefits for three children.

In 2018, Ontario couple with a child under six years of age would stop receiving CCB payments with a net income reaching $188,437.50 without other deductions such as RRSP (canada-child-benefit-is-a-win-for-most-families).  $188,000??? This is not an income of poverty.

The inequality of family benefits for the upper middle class and wealthy families is perpetuated even further by the compounding of benefits on top of benefits.  The article “Supercharge your Canada Child Benefit by making an RRSP contribution” (supercharge-by-making-an-rrsp-contribution) outlines how RRSP contributions are considered to be a tax deduction; therefore, they lower taxable income and can increase the amount of CCB payments.  The example of Ontario family with 3 kids under age 6 years of age and a family net income of $75,000 with full $13,500 RRSP contribution for the year (18% X $75,000) can expect a CCB payment of $13,215 and will pay approx. $11,814 in taxes.  Because of RRSP contributions in the previous year, their CCB payments increased by $1,465 for the present year. Additionally, they will save $1,401 in taxes and at a marginal rate of 29.65%, their RRSP contribution will also result in a tax refund of about $4,000.  The compounding effects of benefits means they will pay less taxes, get larger CCB payment and increase their RRSP wealth. The total family income with CCB is $88,215 (combined after tax and tax free) and they have increased their wealth by $13,500 RRSP for the year of contribution).

Using turbotax calculator for Alberta family with $250,000 gross income or approx. $160,000 net income ($13,300 per month) they should be able to max out maximum allowable 2019 $45,000 for couple to their RRSPs and $12,000 TFSA for the year.  Through compounding effect of benefits, including marital, they will pay approx.$21,000 less taxes, get larger CCB payment, increase their RRSP and TFSA wealth, own their home, and have approx. $181,000 minus TFSA $12,000 contribution or $169,000 ($84.5/hr.) spending capability annually.

It should be noted that there may be other credits and deductions that can be used which will further increase income available for spending.

What would anyone think that unattached individuals with no children don’t deserve to be angry because they know their hard earned money is used to increase the wealth of upper middle class and wealthy families since these families never pay their fair share in taxes because they can avoid taxes through multiple compounded benefits ???

“Ontario woman’s problem is too much debt and too little income” (forced-to-retire) is a very good example of what singles might face (i.e. on $3,750 income per month) when they are forced to retire early due to illness (doesn’t say if she is divorced or widowed).

Solution:  As per above example of $50,000 income it is impossible for single person household to have a meaningful financial life equivalent to that of married no children households.

Politicians need to get off their chickenshit politics, stop taking the easy way out, and do the hard thing by including assets and Market Basket Measure calculations in financial formulas so that singles and low income households get financial social justice and equality equal to that of wealthy and married households.

How about implementing legislation where never married no children persons should not have to pay any income tax on incomes below $50,000 so that get a benefit equivalent to that CCB and multiple benefits to families with and without children?

Chickenship Club of Climate Change

The Green Party keeps talking about a climate change plan, but like other plans and environmentalists/protesters it is all talk with very little information.  When is the Green Party (they are after all the Green Party) going to come up with a plan, for example, a line graph that shows what will happen in year one, year two, etc.  What is going to happen to all the gas combustion vehicles, gas furnaces and water tank heaters. Where are you going to dump them?  Apparently some gas combustion vehicles can be converted to electric. What are you doing about that? Are you going to shut very expensive oil refineries down that are still able to be used for another fifty years?

Many green earth technologies use rare earth minerals some of which are very toxic.  At the present time China produces 80 per cent of the rare earth minerals.  Just how do some extreme environmentalists and politicians think rare earth minerals get to Canada from China to be used in production of wind turbines?  The answer is probably by tanker.

The hypocrisy of the tanker ban is that it is only one way?  Does the  ban on tanker traffic address the tankers coming into Canada?

Elizabeth May was so impressed with India’s climate change plan.  However, India has just voted in again an authoritarian government with the help of far right Hindu religious voters.  India at present time has no middle class and the highest rate of unemployment in forty five years.

Any plan that is implemented by any country has to provide 100% climate change funds to the poor to convert from gas to electricity instead of excessive compensation of the wealthy who are the highest emitters of energy and the biggest consumers of natural resources.

Elizabeth May since her marriage has upped her membership in the ranks of the wealthy high super emitters of energy and super users of natural resources. Those with multiple properties (examples: second property hop farm owned by Elizabeth’s husband, Arizona and other vacation properties that sit empty for six months of the year and excess travel between these properties, huge motorhomes, etc.) should pay more for this privilege afforded to them by their wealth.

Green Party Reform of spousal pensions for those who have married after the age of 60 or retirement

The Green Party and particularly Elizabeth May belong to the chickenshit club of married/coupled financially privileged households.

From the ‘Surviving Spouses Pension Fairness Coalition’ May states she has lobbied to repeal legislation that denies pension benefits to spouses who have married after the age of 60 or retirement.  In one of her letters she states:  …The Green Party supports deleting these restrictive clauses in the Federal Superannuation Acts which penalize pensioners who have remarried or married for the first time after age 60 after retiring….these clauses serve to unfairly deny hard earned pension benefits to deserving partners.  These….clauses are causing great hardship to the survivor whose spouse gave a life in service to our country.”

Liberal Prime Minister Trudeau in his letter also supports this –  “I and the entire Liberal Caucus, believe that Canadian seniors are entitled to a dignified, secure, and healthy retirement. Retirees deserve financial security; they deserve a strong Canadian Pension Plan, and a government who is not only committed to protecting the CPP, but is dedicated to improving its benefits.  A secure and comfortable retirement is essential to achieving middle-class success, and Liberals believe that the federal government must do more to fulfill this promise. While the Conservative Government has left Canadians and the provinces to fend for themselves, Liberals support working with the provinces to create legislation that will make retirement security easier, not harder for all Canadians to achieve.”  (Shouldn’t the same apply to never married no children senior households?)

Tom Mulcair, NDP letter states – “New Democrats want to acknowledge the debt we owe our seniors and reward the years of hard work and dedication to our country.  That’s why we are committed to ending these archaic restrictions on benefits for pensions and their spouses.”

This is not the only pension plan where marriage for only a few years privileges the surviving spouse who hasn’t made any contributions to the pension.

Why, why, why do married persons believe they are entitled to benefits they haven’t earned?  These newly married persons never worked for and never made contributions to the pension of their spouses.  The reform of all spouses pensions similar to the above promotes the financial discrimination of never married, no children persons.  Why do these married persons who never worked for these pensions deserve to have a better lifestyle than never married, no children persons?  Never married, no children persons can never access another person’s pensions. As stated above, it has been shown that it costs more for never married, no children persons to live.  Why can’t a new widow because of death of the spouse live with the same financial realities as a never married, no children person? Afterall, the widow is now ‘single’.

Solution:  A proper financial justice solution would be to pay whatever is left in deceased spouse’s pension to the surviving spouse in the same way that whatever is left in the never married, no children person’s pension is paid to the listed benefactor.  If benefit after benefit is given to widows, equal financial remuneration equivalent to these benefits should also be given to never married, no children seniors.

Chickenshit Club of Conservatives Jason Kenney (Alberta) and Doug Ford (Ontario)

Jason Kenney is already showing his true Trumpian values by targeting most vulnerable residents at the lower end of the financial scale.  He is doing this by lowering corporate taxes and reducing teen minimum wage instead of making the wealthy pay their fair share of taxes. Just waiting for him to reduce progressive taxes back to a flat tax!  Doug Ford continues to do his damage by breaking election promises, attacking healthcare and public sectors and employees of these sectors, and implementing retroactive financial policies on budgets that have already been planned.

Where are the ‘Elizabeth Warren’ and ‘Bernie Sanders’ of Canadian politics that will promote social justice and financial equality by ensuring corporations and upper middle class families and the wealthy pay their fair share of taxes without the compounding of benefits that make them wealthier than single person and low income households?

Chickenshit Club of Liberal Party

The Liberals also belong to the Chickenshit Club of politics as they have done very little to promote social justice and equality where wealthy and corporations pay their fair share.  They are promoting ideas for the elderly to receive benefits if they have to work over the age of 65. How nice – make the senior poor work longer while giving benefits to the wealthy and married who have multiple compounding of benefits which allow them to retire at age 55.

Liberals keep talking about helping the middle class – the real truth is they are pushing the middle class up to the upper middle class while keeping unattached persons and low income families at the lower end of the financial scale.  With their plans there will be no middle class.

The Liberals have done nothing to mitigate the financial injustice and inequality of Conservative Tax Free Savings Account (TFSA) which benefit wealthy the most.

The following  was published in the Calgary Herald as this blog author’s opinion letter on TFSAs – ( Ted Rechtshaffen and Fraser Institute are telling half truths since only child rearing years are discussed on who is paying more taxes.  Wealthy Canadians with TFSA accounts pay no tax on investments earned; therefore, someone else is indeed picking up the bill, i.e. those who can’t afford TFSA accounts. Singles pay more taxes throughout entire lifetime).

“TAX LOOPHOLES NEED TO BE CLOSED”

Re: “Trudeau is right, 40 per cent of Canadians pay no income tax, Opinion, Feb. 8, 2019 (someone-else-is-picking-up-the-bill) ”

Ted Rechtshaffen and the Fraser Institute once again tell half-truths about who pays the most income tax.  Conservatives have created a TFSA monster at home (not offshore) tax loophole.

“They Want To Spend $50,000 In Retirement, Did They Save Enough?”(did-they-save-enough) outlines how an Ontario couple with large TFSA, RRSP accounts and a $600,000 house can retire at 55 and evade income taxes for 15 years while using benefits intended for low-income persons.

Canada, one of the few countries with TFSAs, has the most generous plan with the only limit being annual contribution amounts. Others (example Roth IRA) impose age, income and lifetime limits on contributions.

Without further addition of TFSA limits, the wealthy will pay less income tax than those who cannot afford TFSAs.

Chickenshit Club of Drug Cost and Advertising

All political parties are lobbying to cut drug costs.  Has anyone thought of limiting the amount of advertising drug companies can do?  Advertising is very expensive. Surely, this money could be used to decrease drug costs and to promote research for new drugs.  Why does one have to listen to advertisements on Peyronie’s disease, hemorrhoids, female and male sexual drive dysfunction, etc. over and over again.  Information on benefits of drugs should occur from discussion between the doctor and patient, not from advertisements. One solution would be to limit the amount of times each drug company can advertise in a given time period.

Chickenshit Club of Issues like Tanker Traffic Ban, Money Laundering, etc.

It doesn’t matter which political party it is – Liberal, Conservative, Green Party, BC NDP party, etc., all political parties with their chickenshit politics are trying as hard as they can to harm certain provinces and low income citizens in any way they can.  Governments at all levels have failed in controlling ‘dirty money’ and indeed have been complicit in promoting it. Some have hypocritically implemented legislation that negatively impacts only certain parts of the country.

Tanker Traffic Ban – on west coast, but not the east coast while increasing other revenue generating traffic such as cruise ships, ferry traffic and sightseeing boat traffic on the west coast.

Money Laundering in BC and Canada – The money laundering problem is prevalent across Canada but the egregious case of the ‘Vancouver Model’ of money laundering in BC shows how greed of chickenshit government overtakes the moral and ethical logic of doing the right thing.  BC governments failed to address the problem because of the huge amounts of money generated for the BC Lottery Corporation to be used for government programs. Since this also apparently involved real estate, housing prices rose to an exponential level.  Who is affected most of all? – low income persons who can’t afford housing, be it rental or ownership.

CONCLUSION:

Unless there is a major change to the upside down financial situation of politics and government where the wealthy, married and corporations stand to financially benefit the most (selective socialism for the rich), there is little hope that single person households and low income families will ever reach the middle class status so hypocritically touted by governments, politicians, families, and the elite. They should seek to right the biggest social injustices and financial inequalities, not go after the easiest solutions.

(Updated June 8, 2019)

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

OPINION LETTER ON ‘LEFT’S BIG LIE…’ AND FINANCIAL DISCRIMINATION BASED ON MINIMUM WAGE CONTROVERSY

OPINION LETTER ON ‘LEFT’S BIG LIE…’ AND FINANCIAL DISCRIMINATION BASED ON MINIMUM WAGE CONTROVERSY

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

This blog post was submitted as an opinion letter to a local newspaper on October 27, 2016 in response to three opinion letters entered in the paper on left and right wing political parties.  It should be noted that this opinion letter was edited and shortened by the newspaper because there are often only so many words that can be submitted to newspapers. The title of the opinion letter was ‘Notley is a champion.’  The three opinion letters on which this post was based are outlined at the end of this blog post’.  The ‘The left’s big lie…’ does not appear in its entirety.

October 13 and 20, 2016 letters ‘The left’s big lie…’, ‘Only right and wrong’ and ‘Minimum wage increase won’t help anyone’ letters only produce financial misinformation and reduce political process to shoes (Conservative-minded folks are in the right and the wrong party Liberal -socialist species are in the wrong-the left should only refer to shoes).

Re ‘The left’s big lie…’ statements on socialism and left-wing politicians, analysis shows Conservative and Liberal policies surreptitiously and purposefully eliminate the middle class, thus practising ‘selective’ social democracy (democratic).  Advertently or inadvertently, future class system will consist mainly of the poor, upper-middle class and wealthy while favouring married or coupled family units with multiple ‘marital manna benefits’.  Square root equivalence scale (if value of ‘1’ is used for a single person, then a value of ‘1.4’ is applied for two adults since it costs them less to live) and ‘financial fairness for singles’ are ignored (singles-finances).

During federal Conservative and Liberal party reigns, even while reducing social programs helping vulnerable populations of aboriginals and veterans, introduced programs like pension splitting and OAS clawback particularly benefit the wealthy and married or coupled family units.  In OAS clawback only about five percent of seniors receive reduced OAS pensions, and only two percent lose entire amount.  The very program that is supposed to provide a ‘very modest pension to low and middle-income seniors’ has been redesigned to benefit the upper-middle class.

During provincial Conservative party forty year reign and oil boom, just 1,048 new affordable housing units in Calgary were built over the past 14 years.  Two thirds of shelter beds in Canada are filled by people who make relatively infrequent use of shelters and are more likely forced into shelters by economic conditions (due to structural factors, the state of housing and labour markets that destine the very poor to be unable to afford even minimum-quality housing).

Federal Liberals have continued Conservative benefit programs like Canada Child Benefit in perpetuity which is based on income and number of children, but not net worth and assets, so families may receive large tax free child benefits and continue increasing wealth even while already having huge assets (tax-credit).  

Elimination of the middle class is also evident in Liberals’ proposed Canada Pension plan enhancements (canada-pension-plan).  Premise remains the same – individuals with highest YMPE will receive the most CPP, while those at lower income levels will receive the least CPP benefits. Persons with highest YMPE of $82,700 (massive jump from 2016 $54,900) and forty years of contributions will receive 33 percent CPP benefit or about $2,300 per month, while those making a minimum wage of $15 per hour, $30,000 annual income with forty years of contributions will receive about $800 per month.  A single person earning $15 per hour minimum wage would have to work two and half full time jobs for forty years to equal the $82,700 YMPE.  

Schizophrenic political systems exist where CPP pension enhancements are controlled federally, but minimum wages are controlled provincially.  The continued unwillingness of government and business to promote minimum wage increases to indexed living wages means the poor will remain in poverty even with pension systems that are supposed to improve financial quality of life as seniors.

The words ‘hard-working people’ has been used again to ad nauseum.  The idea that minimum wage only increases having to pay more income tax is ludicrous. Yes, increase in minimum wage may increase income tax deductions by, for example, 20 percent but these recipients will also have 80 percent more income to spend which will be used to increase product and services.  Increasing CPP, but not increasing minimum wage means children in the future who are living in poverty will receive less CPP, while their wealthy CPP parents and family members will receive the bulk of the CPP enhancements.

We are all responsible for not fighting financial greed of plutocracy, big government and corporations like Walmart, tax loopholes, Wallstreet, outrageous salaries and prices in the entertainment, sports industries, housing and gentrification of cities.  This has resulted in small businesses not flourishing and poverty increasing to an unprecedented level. Failure to increase the minimum wage instead of dealing with real underlying problems equals fighting the wrong fight.

More champions for the vulnerable like Rachel Notley and Bernie Sanders are needed. Bring it  on!  (End of opinion letter)

The three opinion letters that this blog post refers to are included as follows:

‘The Left’s Big Lie…’ October 13, 2016 local newspaper

The totality of this article talks about climate change and ‘The radical environmental movement as well as left-wing Canadian political parties, most notably the Alberta NDP, are telling the BIG LIE about our energy industry and the global environment.’…..To explain, it goes back to the goal of socialism, which is to “restrict private enterprise and control the economy”…..If we continue down the path dictated by our left wing politicians, the standard of living in Alberta will continue to decline…..Albertans must come together and take back government from these politicians who put their radical ideology ahead of the interests of all the hard-working people in our great province.’

‘Only right and wrong’ October 20, 2016 local newspaper

‘Great letter (The left’s big lie).  However we have to get this right and left idea straight.  The only thing in my home that is left is my shoe.  In politics, it should be referred to as follows:  Conservative-minded folks are on the right.  Liberal-socialist species are on the wrong.  Wrong being the proper opposite of right unless you are describing an object such as my shoe.’

‘Minimum wage increase won’t help anyone’ Oct 20, 2016 local newspaper

‘I do believe all people should make a living wage, but driving up the minimum wage does not have that effect.  If you look at the numbers according to the Government of Alberta website there are 290,000 people in Alberta that make minimum wage.  If they all get $1/hr. raise at approximately 40 hours per week the economy needs to breakout an additional $638 million, with no real increase in product or service.  The cost of all things go up and still we have no living wage, but those on minimum wage now pay more income tax.  So, now the NDP has made political points as well as more tax revenue, while some have lost hours or jobs.  All fixed income people, like vets and seniors, are hit most because they get no raise in pay.’ (End of post)

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

WHO IS THE MIDDLE CLASS? AND FINANCIAL DISCRIMINATION OF SINGLES AND THE POOR

WHO IS THE MIDDLE CLASS? AND FINANCIAL DISCRIMINATION OF SINGLES AND THE POOR

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

There has been much discussion in the last few years about who the middle class is and whether the middle class is disappearing.

Certainly, if one looks back technology has improved the quality of life.  Some of us older folks, but not that old, remember housework like laundry that included heating water on the stove, wringer washers and drying clothes on the line.

Other changes over the decades include the following:

  • Families have become smaller so income goes further (due to socio-economic pressures)
  • Day care and  college/university education have become very expensive, but health care and grade 1-12 education are covered under government programs
  • Certain occupations face high operating costs (farm machinery and price of farmland)
  • Social issues and cyberspace has made child rearing more complex
  • Knowledge’ and automation revolutions have replaced certain higher wage jobs with low wage jobs (service)

The definition of the stereotypical ‘American Dream Family: ’they own their own home, have more than one car, can afford to send their children to college, have access to healthcare and benefits, and have spare time to vacation or simply have free time in general.

INCOMES AND NET WORTH OF THE CANADIAN MIDDLE CLASS

In Canada it would appear that the middle class primarily includes those earning between $40,000 and $80,000.  However, when the Canadian population is divided into unattached family units and family units of two or more persons, the income levels are quite different. According to Statistics Canada 2013 (statcan.gc.ca/daily) the median after tax income for unattached persons over 65 is $25,700, for unattached persons under 65 $29,800, and female lone parent families $39,400.  For two parent families with children the median after tax income is $85,000 and senior families $52,500.  (After-tax income is defined as the total of market income and government transfers, less income tax).

The median net worth according to Statistics Canada 2012 (statcan) is as follows: Unattached person under 65 $22,700, unattached person over 65 $246,000, senior families $650,000, non-senior families couples only $365,200, non-senior families with children under 18 $302,100, lone parent families $37,000 and other non-senior families $423,000.

The following information from MoneySense shows Stats. Can. 2011 income and net worth data divided into quintiles:

INCOME TABLE (MoneySense based on Stats. Can. 2011 macleans)

INCOME (PRE-TAX) – HOW DOES YOUR PAY STACK UP

Quintiles Unattached Individuals Families of Two or More
Bottom 20 % $0 to $18,717 $0 to $38,754
Lower-Middle 20% $18,718 to $23,356 $38,755 to $61,928
Middle 20% $23,357 to $36,859 $61,929 to $88,074
Upper-Middle 20% $36,860 to $55,498 $88,075 to $125,009
Highest 20% $55,499 and up $125,010 and up

NET WORTH TABLE

Quintiles Unattached Individuals Families of Two or More
Bottom 20 % Negative to $2,468 Negative to $67,970
Lower-Middle 20% $2,469 to $19,264 $67,971 to $263,656
Middle 20% $19,265 to $128,087 $263,657 to $589,686
Upper-Middle 20% $128,088 to $455,876 $589,687 to $1,139,488
Highest 20% $455,877 and over $1,139,489 and up

(Caveat:  It is difficult to determine if unattached individuals includes widowers who often have more net worth than ever singles, early in life divorced persons and single parents).

DEFINING MIDDLE CLASS IN CANADA

Defining middle class in Canada by Sanita Fejzic (middle-class) article gives an interesting perspective on the middle class.

‘There are two ways of looking at the middle class. The first is to focus all the attention on the baby boomers and define middle class based on their experience. While this is problematic, it also makes sense for two reasons: (1) baby boomers make up a large portion of Canada’s total population, so, in terms of simple number crunching, their experience results in a national average and (2) because baby boomers are the majority, their votes become valuable and therefore most of the political rhetoric on middle class inevitably revolves around their experience. The hiccup with this scenario is that middle class baby boomers are relatively financially wealthy.

The second way of seeing middle class acknowledges the situation from an intergenerational point of view.

“Data suggests it’s really important to be careful about using the language of the middle class squeeze,” adds Paul Kershaw, Interim Associate Director, Human Early Learning Partnership at the University of British Columbia and Founder of Generation Squeeze Campaign. “While this language is popular among some political parties, it hides the reality that the squeeze is much more of an age issue.”

As Kershaw points out, high housing prices explain why the median 55-64 year old today reports wealth that has nearly tripled compared to the same age group a generation ago. “That’s not a middle class squeeze,” says Kershaw. “That’s the middle of a demographic nearing retirement with more wealth than the country has ever seen.”

High home prices that were good for people who bought homes decades ago are crushing their kids and grandchildren’s dreams of home ownership. “Gens X and Y pay housing prices that have nearly doubled after adjusting for the CPI, with wages that are down $3/hour, even though they are more than twice as likely to have post secondary [education] today compared to the past, and take jobs that are far less likely to pay generous pensions,” he explains. “In sum, the squeeze is primarily on younger generations.”

Political focus is on the baby boomer middle class.

As 93% of Canadians (see link) self-identify as middle class, all three political parties have high stakes when it comes to winning the hearts of middle class voters.

The middle class is the political battleground,” states  Leslie Pal, Professor of Public Policy and Administration and Director of the Centre on Governance and Public Management at the University of Carleton. “And it’s not about which parties benefit the middle class but how they are appealing to an older, greying middle class.”

In other words, the three parties are either completely ignoring the generational aspect of the problem or simply don’t understand it. Instead, their energy is going into securing the votes of middle class baby boomers.

According to Pal, there are two broad directions the three parties have taken to appeal to the baby boomer middle class. “One is what I call the jelly bean policy and the other is policy that tackles major problems,” he says.

In jelly bean policy, small offerings are made to baby boomer middle class voters because they’re already living relatively comfortably and have no sense of urgency.

Here we see the Conservatives’ tax breaks on sports equipment, bus passes and policy that unbundles cable packages and the NDP’s messages regarding high ATM fees. “They’re tiny policies,” says Pal. “Like giving jelly beans, it’s sweet and tasty, but it doesn’t fix the problem.”

The other direction solves larger problems, with a focus on reforming the pension system. Much has been done to this regard and there is much to do.

“The use of the term middle class [in the political arena] is rhetorical to some extent,” says Pal. “The Tories have crafted a package whose appeal is sharper [to the baby boomers.]” They’re tough on crime, focused on tax breaks and have strict immigration policy.

The Liberals’ middle class rhetoric is lighter on policing and immigration and focuses on minorities, making ends meet and affordable education, while the NDP is focusing on household debt and lowering credit card fees. The NDP has created a number of social support systems that have safeguarded the middle class, including Medicare. However, their focus has traditionally been about protecting main-street workers and minorities.

But none of the three parties are drafting policy that addresses the threat of a disappearing middle class in the future. As they get ready for the 2015 election — and with the help of sophisticated technology to micro-target various demographic groups — they’ll have to remember to tailor real policies aimed at the group that’s potentially got the most to lose, generation squeeze’. (End)

THE DISAPPEARING MIDDLE CLASS AND HOUSING

(disappearing-middle-class) An Excerpt from Joel Kotkin’s Forthcoming book The New Class Conflict

‘…..This process has been greeted with enthusiasm by financial hegemons, who have stepped in with billions to buy foreclosed homes and then rent them; in some states this has accounted for upwards of twenty percent of all new house purchases. Having undermined the housing market with their “innovations,” notably backing subprime and zero down loans, they now look to profit from the middle orders’ decline by getting them to pay the investment classes’ mortgages through rents.

Part of this shift has been exacerbated by the movement of large investment groups like Blackstone to buy up single family houses for rent, representing a kind of neo-feudalist landscape, where landlords replace owner occupiers, perhaps for the long-run.

The very idea of homeownership is widely ridiculed in the media as a bad investment and many journalists, both left and right, deride the investment in homes as misplaced, and suggest people invest their resources on Wall Street, which, of course, would be of great benefit to the plutocracy. One New York Times writer even suggested that people should buy housing like food, largely ignoring the societal benefits associated with homeownership on children and the stability of communities.  Traditional American notion of independence, permanency and identity with neighborhood are given short shrift in this approach.

This odd alliance between the Clerisy and Wall Street works directly against the interest of the middle and aspiring working class. After all, the house is the primary asset of the middle orders, who have far less in terms of stocks and other financial assets than the highly affluent. Having deemed high-density housing and renting superior, the confluence of Clerical ideals and Wall Street money has the effect on creating an ever greater, and perhaps long-lasting, gap between the investor class and the yeomanry’.  (End)

INCREASE OF SQUARE FOOTAGE IN HOUSING SINCE THE 40’S AND 50’S

“Why Canada’s houses are getting smaller”, Tristin Hopper, National Post, July 13, 2012 (shrinking-home)

‘From post-war bungalows to 1990s McMansions, the Canadian House has spent the last 60 years progressively ballooning into one of the largest domiciles in history….In 1947, to accommodate a wave of post-war home construction, houses were often no bigger than 1,000 square feet.  Then came powder rooms, family rooms, enclosed garages; by 1975 home sizes had jumped to 1,075 square feet.  But still, their children, the Baby Boomers, shared bedrooms and cope with the weekday morning ritual of waiting for a spot in the home’s only bathroom.

Crazed for elbow room, when the Boomers finally seized the reins of home ownership in the 1980s, all hell broke loose.  Wide hallways, gargantuan entrance halls, mud rooms.  By the turn of the millennium, Canadians lived in some of the world’s largest houses – and were filling them with some of the world’s smallest families….

But then, by 2007, the meteoric growth of Canadian houses began to a slow to a trickle…the average new home size had dropped to 1,900 square feet – well down from a mid-2000s peak of 2,300 square feet….over the years, lot sizes stayed pretty much the same, but builders added storeys, dug out basements and pushed the front steps to the sidewalk….Canada, too, is witnessing the slow death of walk-in closets, hobby rooms and even the once-ubiquitous living room…..

The Millennials, the generation born from 1983 onwards, enjoyed a childhood free of bunk beds or even shared bathrooms.  Growing up in plush mega homes undoubtedly helped them become, in the words of one author, ‘self-centered, needy, and entitled with unrealistic work expectations.  Oddly, it also spawned a group of people patently unimpressed with backyards and breakfast nooks….

Under current economic forecasts, Millennials are poised to spend their early adulthood decidedly less affluent than their parents.  They are also facing a housing market that has outpaced income growth for well over a decade….

Except, of course, in Alberta, in the land of $85,000 median wages and dirt-cheap housing lots, young families are still snapping up giant, single-family homes like it’s still 1985….Edmonton has more space per person than any major city in Canada….In Calgary, even the condos are 4,000 square foot ‘monsters’.’ (End)

WHAT DETERMINES HOW THE MIDDLE CLASS IS CREATED

Michael Lind, “Are We Still a Middle-Class Nation?” The Atlantic Monthly 293, no. 1 (January/February 2004) (issues).

Michael Lind goes so far as to claim “each of America’s successive middle classes has been artificially created by government-sponsored social engineering—a fact that is profoundly important for us to admit as we think about the future of middle-class America.” (End)

Andrew Coyne: “Forget the Liberal mythology, Canada’s middle class is not struggling” (middle)

This has always been implicit in Liberal rhetoric about “the one per cent,” but now it is policy. If the rich have been “taking” from the middle class, then the Liberals want you to know they will take it back: a cut of one-and-a-half percentage points in the lower-middle bracket, paid for by an increase of four percentage points in the top rate of tax. Fairness demands nothing less.

Seldom have the politics of “gimme that” been expressed quite so nakedly. It is one thing to redistribute from rich to poor, or from the broader society to those on its margins. But the beneficiaries in this case are not the poor, or even the median: as the NDP helpfully pointed out, the $44,701 threshold at which the Liberal tax cut would kick in would benefit only the top one-third of tax filers.” (End)

CONCLUSION

Wants have changed, it seems new homeowners all want hardwood floors and granite countertops and will pursue those dreams and accumulate high debt even with out of reach house prices.

Many wealthy Canadians (mainly married or coupled person family units)  think they are only middle class, but own their homes outright, have multiple properties, recreation vehicles, winter in Arizona or Florida, and have huge net worth and assets. Many also have multiple income sources from their net worth and assets in their senior years.  Many will buy properties with their increased wealth to rent out to those at the bottom of the wealth pile.  The rent charged is set at levels of greed to not only cover the mortgage and other costs, but also make 3 or 4% profit on their investments (affordable)

As stated above, 93% of Canadians believe they are in the middle class.  Yet MoneySense statistics presented above shows that 40% of Canadian families of two or more persons have incomes above $88,000 and have net worth and assets above $600,000.  THIS LAST STATEMENT BEARS REPEATING AGAIN.  Forty per cent of Canadian families have incredible wealth and yet think it is okay to lie to themselves and other Canadian singles and poor families about their wealth. They continue to spin these lies and this spin is perpetuated by government and politicians.

As has been shown in past blog posts, government and politicians have created upside side down and schizophrenic financial policies that benefit upper middle class families more than ‘middle of the road’ middle class families, singles and the poor (government-program).  Baby boomers and families because of their voting power are considered to be more financially important than other generational persons such as millennials.

What’s the point of hard work and common decency if the financial system is stacked against singles and the poor?  The values that have actually enriched the wealthy and upper middle class appear to be greed, over consumption, arrogance, dishonesty and telling lies upon lies upon lies about their wealth (especially with regards to affordable housing) .

‘Hard working’ phrase is used ad nauseum, but many middle class families  think they should not have to work til age 65 due to a sense of entitlement.

Even with having one of the highest standards of living in the world,  middle class Canadian families are still unhappy and want more and appear to have no qualms about financially discriminating against the lower middle class, singles and the poor.

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

STAGNANT MINIMUM WAGE AND LOW INCOME IMPACT ON CPP ENHANCEMENTS

STAGNANT MINIMUM WAGE AND LOW INCOME IMPACT ON CPP ENHANCEMENTS

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

Occasionally there are events or things in life that will ‘rock you to your core’, ‘knock your socks off’, or ‘set you back on your heels’.  On writing for this blog, one of these things or events is the minimum wage or low income and what an impact this has on financial lives of the poor and low income regards to proposed CPP enhancements.

From Department of Finance, “Background on Agreement in Principle on Canada Pension Plan Enhancement” (fin.gc) for proposed enhancement of CPP states the following:

‘Today, middle class Canadians are working harder than ever, but many are worried that they won’t have put away enough for their retirement.  Each year, fewer and fewer Canadians have workplace pensions to fall back on.  To address this, we made a commitment to Canadians to strengthen the Canada Pension Plan (CPP) in order to help them to achieve their goal of a strong, secure and stable retirement……

There will be gradual 7-year phase-in below the Yearly Maximum Pensionable Earnings (YMPE), followed by a 2-year phase-in of the upper earnings limit….

The maximum amount of earnings subject to CPP (from 2023 to 2025) will be increased by 14%.  The upper earnings limit will be targeted at $82,700 upon full implementation in 2025…..

In 2023, the CPP contribution rate is estimated to be 1% higher for both employers and employees on earnings up to the YMPE.  Beginning in 2024, a separate contribution rate (expected to be 4% each for employers and employees) will be implemented for earnings above the then prevailing YMPE.

All working Canadians will benefit from an enhancement of the CPP. This enhancement will increase income replacement from one-quarter (25%)  to one-third (33%) of pensionable earnings.

As the CPP enhancement will be fully funded, each year of contributing to the enhanced CPP will allow workers to accrue partial additional benefits. In general, full enhanced CPP benefits will be available after about 40 years of making contributions. Partial benefits will be available sooner and will be based on years of contributions.’

The following information regarding the middle class has been taken from (theglobeandmail):

A 2013 internal government document, entitled “What We Know about the Middle Class in Canada,” draws the lines more precisely, deeming the middle class as those whose after-tax income falls between 75 per cent and 150 per cent of the national median – which, using 2012 figures, would include any family taking home $54,150 to $108,300 a year.  “Family,” however, is a catch-all demographic that includes couples of all ages, with or without children, single or double-earners, and single parents. Single people are excluded entirely – one of the fastest growing groups in Canada and a big chunk of the middle class – whose income, using the same government calculation above, would fall between $21,150 and $42,300…..This is one reason why so many millionaires (44 per cent of those who responded to a recent survey by CNBC) outrageously define themselves as middle class when, in fact, once your personal income closes in on $200,000, you leap into the top 1 per cent of earners in Canada….(and top twenty per cent have salaries over $116,000).

Average income (before taxes and transfers) by quintile, all family types, 2013

  • Lowest: Up to $13,000
  • Second: $13,100-$37,000
  • Middle: $37,000-$66,500
  • Fourth: $66,500-$111,600
  • Highest: $111,600 and up

Source, Income Statistics Division, Statistics Canada

What the numbers say: Income levels have fluctuated over the last four decades, with lasting growth concentrated among the wealthiest. In 2011, the incomes of the bottom three quintiles were still lower than in 1976, adjusting for inflation. The top 40 per cent had jumped ahead, with the largest gains made by the top 20 per cent. Compared with 1976, they were the only Canadian households who saw their share of income rise….

What the numbers say: Between 1999 and 2012, the median net worth of Canadian families rose nearly 78 per cent, from $137,200 to $243,800. Most of this wealth is concentrated in housing, especially for lower-income groups. This new wealth wasn’t evenly distributed, however. Gains were higher, the wealthier the family. While median net worth grew by 107 per cent for the richest families, for the bottom 20 per cent it rose just 14.5 per cent. Within the middle class, richer Canadians also did better – the upper middle income saw their worth grow by 90 per cent; the lower middle income by 60 per cent…..

Baby boomers are working longer than expected, debts are rising, and grandma’s housing bonanza is pricing her grandchildren out of the real-estate market, especially in big cities where the best jobs are increasingly concentrated. Paul Kershaw, who studies generational equity at the University of British Columbia’s School of Population and Public Health, has calculated that Canadians in their late 20s and early 30s will have to save, on average, five years longer to produce a down payment, and work one month a year more than their peers in 1976 to cover their mortgage. And according to a June report from the Canadian Centre for Policy Alternatives, thirty-somethings are the only age group with a lower overall net worth in 2012 than they had in 1999…..’

READER COMMENT on above article:

‘This is the reality of Canadians in their twenties and thirties.  They are buffeted on the one hand by a regressive Service Sector (Service Sector-more than fast food outlets- includes banking, insurance, and information technology) senior management style reminiscent of pre industrial revolution feudal management and owners who believe that the 15% federal tax is excessive and should be demolished.  On the other hand these all important Canadians under forty years are hopelessly burdened by the same senior management who are responsible for policy that has created unmanageable long term student debt, unconscionable large mortgages with no long term rate matching to amortization and no defined benefit pension plans….the existing Bank Act and Insurance Act as well as Competition Law provides ample power for an enlightened government to bring fairness to our most important asset – Canadians under forty years old’.

MoneySense (middle-class)data based on Stats.Can. 2011 figures – Middle 20% pre-tax income for unattached individuals is $23,357 to $36,859 and for families of two or more $61,929 to $88,074.

In 2013, Stats.Can. data shows median after-tax income for unattached singles over 65 to be $25,700 and under 65 to be $29,800.  For female lone parent families $39,400, for two parent families with children $85,000 and senior families $52,500.

Living Wage Dollars (politicians) (a basic wage that keeps poor working Canadians off the streets) for 2013 Guelph, Wellington and 2012 Grande Prairie range from $19,284 to $25,380 for unattached singles and $56,796 to $62,844 for two parent, two children family unit.  Living Wage for Guelph/Wellington for 2015 has been set at $16.50 for family unit of two parents and two children. The City of Vancouver employee living wage for 2016 is $20.64.  The calculated living wage for Toronto family unit of four for 2015 is $18.52.

Minimum wage in 2015 (minimum) in provinces looked like this – British Columbia $10.25, Alberta $10.20 ($11.20 in Oct. 2015), Saskatchewan $10.20, Manitoba $10.70, Ontario $11.00, Quebec $10.35, New Brunswick $10.30, Nova Scotia $10.60, Prince Edward Island, $10.35, Newfoundland $10.25, Yukon $10.72, Northwest Territories $10.00, Nunavut $11.00.  For 2016, provincial minimum wage ranges from $10.65 to $13.00.  Very few provinces index minimum wage to inflation.  The Alberta NDP party who came into power in 2014 promises to raise minimum wage to $15 by 2018.

The following table shows CPP contribution and benefit rates from 1987 to 2025.  Future proposed rates are shown in yellow.  It is interesting to note that the maximum CPP pension payout does not equal 25% of the YMPE.  Rather it seems to average around 24%.  Where did the remaining dollars go – perhaps for administrative costs?  Payout for 2025 has been calculated at 32% rather than 33%.

cpp-enhancements

ANALYSIS

  1. Minimum wage or living wage in relation to CPP enhancement – A minimum wage averaging between $10.00 and $11.00 in Canada or approximately $20,000 and $22,000 annual wage for 2,000 worked hours per year means these employees working for forty years will receive virtually nothing in CPP payments in comparison to those employees whose maximum CPP YMPE will be $82,700.  If the estimated amount of CPP after forty years of contribution for $82,700 maximum YMPE will equal about $2,000 per month, then the CPP benefit for $20,000 annual salary could be estimated to be 25% or $500 per month.  Even with a living wage of $20.00 per hour or $40,000 annual salary for 2,000 worked hours will possibly only equal 50% or $1,000 (equivalent to rent or mortgage) CPP benefit per month.  Just what incentive is there for the poor and low income to work when the YMPE will rise to a level that is higher than the middle quintile income of  $37,000-$66,500 and when one of the criteria is working for forty years?  While it is understood that incomes will likely rise over the next forty years, past history has shown that it will repeat itself by not increasing the minimum wage to a living wage equally in proportion to CPP contributions and benefits.  Ever singles and early divorced singles without children deserve better when they  have worked for forty years, never used EI, never used family benefits like maternity or parental benefits, child rearing dropout credits, child benefits and widowed person benefits along with all the marital manna benefits (pension splitting). Question to be answered:  Will the minimum wage along with OAS and GIS rise to same level that CPP YMPE will rise and will they be indexed to same level (33% would be nice) so that CPP, OAS and GIS benefits for the poor and low income will be at least a living wage level throughout their senior lives?
  1.  Upper-middle class will benefit the most while the poor and low income Canadians have been left out of the formula – Politicians and governments continue to coddle the middle class and especially the upper-middle class (so stated by financial government officials themselves in above article “middle class Canadians are working harder than ever”).  The Canadians who will benefit the most from the proposed CPP YMPE are the top two quintiles earning $82,000 and up per year (fourth quintile $66,500-$111,600 average income for all family types as shown in above statistics).  As the CPP YMPE rises at a level that is exponentially higher than the average income level of the middle class, so will the CPP payouts rise at a level that is exponentially higher for the upper middle class.  In the table shown above, the yearly YMPE has risen at a relatively steady rate for each year.  Examples:  The YMPE rose $600 for years 2000 to 2001, $1,200 for 2015 to 2016 and proposed $1,100 for 2022 to 2023.  The YMPE will take a dramatic jump of $7,100 ($67,800 to $74,899) for 2023 to 2024 and $7,800 ($74,900 to $82,700) for 2024 to 2025.  The YMPE, which used to be more ‘middle of the road’ middle class, will now rise to upper middle class levels just like all other defined benefit plans in this country, the higher the salary-the higher the benefit.   (Widowed persons of higher income deceased spouses also benefit more from these plans, but have not made contributions equal to the pension payouts, even though as widowed persons they are now technically single).  It almost certainly can be guaranteed that annual incomes will not increase by that amount for any of the lower income groups and especially for the poor and low income groups.  Pension plans in this country have been made schizophrenic and financially upside-down when they are controlled by the federal government, but minimum wages are controlled by the provinces, while ensuring the wealthy will get wealthier and the poor will remain poor.
  1.  Four things that need to happen to eliminate financial discrimination of CPP enhancements – What is the incentive for ever singles, early divorced singles and poor families to work when government, politicians and businesses purposely implement financial policies that work against them?? Four things need to happen – one. raise minimum wage to a living wage with indexing; two, exponentially increase indexing of OAS and GIS to same level of $82,700 CPP YMPE; three, eliminate marital manna benefits that privilege high income families such as pension splitting and revise programs such as OAS recovery tax so they truly do progressively eliminate OAS according to income for the upper-middle class; and four, review all retirement benefits and retirement programs in totality and with each other (both on federal and provincial level) to prevent creation of financial silos that privilege the wealthy few.

SOLUTION

In addition to the above four items, how about adding six years of CPP benefits to total years worked for singles (ever singles and early divorced singles, excluding widowers), equivalent to child rearing dropout credits? (Added Sept. 26, 2016 but then, singles already work forty years so that idea won’t work.  So how about applying the equivalence scale of 1.4 to the CPP benefits that singles have earned while working)?  It is a known fact that it costs unattached singles more to live (senior-singles-pay-more) than married or coupled family units.  The Canada Revenue Agency knows who singles are as they have indicate themselves as such on their income tax submissions.  Now, wouldn’t that be a novel idea to eliminate financial discrimination and promote financial fairness for 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 PENSION PLAN JUST ANOTHER GOVERNMENT PROGRAM PROMOTING FINANCIAL DISCRIMINATION OF SINGLES AND THE POOR

CANADA PENSION PLAN JUST ANOTHER GOVERNMENT PROGRAM PROMOTING FINANCIAL DISCRIMINATION OF SINGLES AND THE POOR

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

(singles-need-to-learn-how-to-articulate-financial-discrimination-of-singles)

Our last post discussed the financial discrimination of Old Age Security (OAS).  This post discusses the financial discrimination of the Canada Pension Plan (CPP).

CPP is part of the Pillar 2 plan of Canada’s retirement income system for seniors.  Some of the attributes of the plan are:

  • Federal government and Provinces are joint stewards of the CPP
  • Provides retirement, survivor, and disability benefits
  • Universal coverage of all workers in all industries
  • Employees and employers make equal contributions (4.95% each – 9.9% combined in 2015?) on earnings up to annual maximum of $54,900 (2016)
  • Defined Benefit – up to 25% of the average wage
  • Fully portable
  • Inflation-indexed to CPI
  • Actuarially sound for the next 75 years
  • The maximum CPP benefit for 2016 is $1,092.50 per month.

Unfortunately, most Canadians do not realize that the average Canadian will not receive the maximum CPP on retirement.  In fact, most will only receive about $643 per month of CPP maximum.  Why is this so?

Jim Yiu from ‘Retire Happy’ in his article “How much will you get from Canada Pension Plan in Retirement?” states (words in italics are my words):  

‘When planning for retirement, the first piece of advice given is not to plan on getting the maximum.  When you look at the average payout of CPP, it’s just a little over $643 per month in 2016, which is a long way from the maximum. In other words, not everyone gets the maximum. At the most basic level, the amount you get from CPP depends on how much you put into CPP.

Why is it that so many people do not qualify for the maximum amount of CPP? The best way to answer that is to look at how you get the maximum retirement benefit. Eligibility to receive the maximum CPP benefit is based on meeting two criteria:

  1. Contributions – The first criteria is you must contribute into CPP for at least 83% of the time that you are eligible to contribute. Essentially, you are eligible to contribute to CPP from the age of 18 to 65, which is 47 years. 83% of 47 years is 39 years. Thus, the way to look at CPP is on a 39-point system. If you did not contribute into CPP for at least 39 years between the ages of 18 to 65, then you won’t get the maximum. If so, then you might get the maximum but there is another consideration.
  2. Amount of contributions – Every year you work and contribute to CPP between the age of 18 and 65, you add to your benefit. To qualify for the maximum, you must not only contribute to CPP for 39 years but you must also contribute ‘enough’ in each of those years. CPP uses something called the Yearly Maximum Pensionable Earnings (YMPE) to determine whether you contributed enough. (For 2016 the YMPE is $54,900 – EQUIVALENT TO ABOUT $25 PER HOUR).

Basically if you make less than $53,600 of income in 2015 ($54,900 in 2016), you will not contribute enough to CPP to qualify for a point on the 39-point system…..As you can see, it’s not easy to qualify for full CPP especially with the trend of people entering into the workplace later because of education and people retiring earlier.  If you have 39 maximum years of contribution you’ll get the maximum CPP amount. If you have 20 maximum years of contributions you will get approximately half the maximum (you might get some partial credits for part years).

Planning your retirement needs and income requires some understanding of how much you will get from CPP. Many people either assume they will get the maximum or assume they will get nothing at all because they fear the benefit may not be there in the future. Both these assumptions have significant flaws. Take the time to personalize the planning by understanding how the CPP benefit is calculated and how much you will receive.’

ANALYSIS

Reasons why CPP is financially discriminatory to singles with low/moderate incomes and the poor:

    1. The YMPE 2016 salary to get maximum CPP benefits is $54,900 (up $1,300 from last year).  If average annual hours of work equals 2,200 hours then YMPE salary will be approximately $25 per hour.  Many singles and the poor do not have $25/hr. jobs.  In addition politicians, government, and businesses generally refuse to increase the minimum wage or ensure a living wage for all Canadians. If the YMPE is increased by $1,300, why aren’t the wages increased by the same amount for the poor so they can also contribute more to CPP?  Even those persons who work faithfully at full time jobs for forty years, but don’t have $25 per hour jobs will not receive full CPP benefits.  (Is this really what they deserve after working faithfully for their country for forty years)?  So who benefits most from CPP?  It is the middle class and wealthy who have at least $25/hr. jobs and, therefore, are able to get full  CPP benefits.
    2. Early retirement – who gets to retire early?  It is generally the upper middle class and wealthy married or coupled family units because of the marital manna benefits they receive, high incomes and the net worth they have.   In reality many of these families really do not need full CPP benefits.  From personal experience of this blog author, some married or coupled spouses will say both spouses do not need to work when really both spouses should be working or because of their high income only need one spouse working.  (To get full  CPP benefits each Canadian born citizen needs to contribute into CPP for at least 39 years between the ages of 18 to 65.   And, Canadians must not only contribute to CPP for 39 years but they must also contribute ‘enough’ to maximum of YMPE in each of these years).
    3. Marital manna benefits – Married or coupled family units have received many marital manna benefits that allows them to achieve more wealth than many singles and the poor.  One such example is the Child Rearing Drop-out Benefit.  CPP benefits may be increased for years that spouse did not generate income because of staying home to rear child from ages 1 to 6.  This is not necessarily a bad thing in and of itself, but those who are more likely to be able to stay home for child rearing are those with healthy incomes.
    4. Perception of financial  need –  Many politicians, governments, and financial planners have misconceived perceptions that financial goals should be for Canadians to have equal or higher pension income than while working.  In other words, if poor, it is okay to always be poor even in retirement.  For middle class or wealthy they say the goal should be equal or more pension income than working income even with high net worth and assets.  In reality, institutions like the OECD states less wealthy need 100% retirement income  of working income, while wealthy need retirement incomes that are much less of working income.  What is left out of these perceptions is quality of life.  Equal or higher pension income than income while working for singles with low/moderate incomes and the poor especially if paying rent or mortgage in retirement often does not equal a good quality of life.
    5. Proposed enhancements to CPP contributions and benefits – Proposed enhancements where CPP retirement pensions will be higher if taken after age 65 and./or will be higher if person works past age 65 are very good things. However, it is likely that singles and the poor are not the ones who will be able to postpone receiving their CPP benefits, and it is also more likely that singles and the poor are the ones who will need to work longer.  As for increasing CPP contributions now so that CPP benefits can be increased in the future, this generally is a good thing; however, the stress of having to contribute more will be more financially distressing for singles with low and moderate incomes and the poor rather than the middle class and the wealthy.

CONCLUSION

It seems to be more important for politicians and governments to ensure that upper-middle class and wealthy maintain their standard of living than it is to treat ever singles, early divorced singles, single parents and the poor fairly in benefits they receive (cpp).

Upside-down financial systems (upside-down) and marital manna benefits have created a nanny state where married/coupled persons want it all and once these benefits are in place, it is very difficult to eliminate them because of voter entitlement.  Upper middle class and wealthy married/coupled persons have been made irresponsible by their own politicians and government.  Many are not living an equal life style in their retirement, but a much better lifestyle.  A further question is whether these programs will be financially sustainable because upper class and wealthy married or coupled family units have not contributed enough to pay for these benefits.

Much is required of all family units regardless of marital status to educate themselves on what their actual retirement income will be.  If you don’t work, you won’t get CPP.   You won’t get CPP if you don’t work.  You won’t get CPP if you don’t make CPP contributions, for example, working ‘under the table’.  (And, wouldn’t it be nice for parents to pass this financial information onto their children so that their children will also make wise financial decisions)!  Much is required of financial planners to educate themselves on quality of life issues, not just equal or higher pension incomes.  Much is required of politicians and governments to educate themselves on how financially discriminatory many of the pension benefits are and to make changes so that there is financial equality and fairness in distribution of pension benefits for every Canadian,not just middle class married or coupled family units and the wealthy.

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

NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF SINGLES-Part 2 of 2

NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF SINGLESPart 2 of 2

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

When politicians, government and the wealthy continue to perpetuate myths that net worth and assets are too difficult to calculate or should not or cannot be included in financial formulas, this continues to make it possible for the wealthy to maintain their wealth and impossible for singles and the poor to maintain or increase their financial well-being thus resulting in financial discrimination and poverty for these groups.

The following three examples show how inclusion or exclusion of net worth and assets perpetuates the myths proposed by financial analysts, politicians, government and the wealthy.

EXAMPLE #1

Affordable Housing (services)

One assistance program in Alberta is Community Housing which is a subsidized rental program. It provides housing to families and individuals who have a low or modest income. Program funding comes from the federal, provincial, and municipal governments.To qualify, applicants must be Canadian Citizens, independent landed immigrants, or government sponsored landed immigrants. Assets and belongings cannot exceed $7,000. Assets include, but are not limited to:

  • bank accounts
  • investments (excluding RRSPs)
  • equity in property
  • equity in a motor vehicle (assessed by reviewing the value in the most current Canadian Red Book)

EXAMPLE #2

Legal Aid Alberta (legalaid)

Financial Eligibility Guidelines – If income falls within the amounts listed below, person(s) may be eligible for legal representation and to have a lawyer appointed.  Representational services are not free. Repayment will be discussed if a lawyer is appointed.  Legal Aid’s Financial Eligibility Guidelines allow the following eligible monthly income for family size of 1 – $1,638, 2 – $2,027, 3 – $2,885, 4 – $3,120, 5 – $3,354 and 6+ – $3,587.

An example of this is an actual court case going on at the present time.  Legal Aid has refused to assist client’s claim of defence for an estimated $25,000 in legal fees.  Legal Aid says client still has a large amount of property ($500,000 mortgage free), $34,000 in savings, tax free savings account (TFSA), and GICs and mutual funds worth another $21,000, plus $570 a month in old-age security payments with monthly expenses of $1,660.  Legal Aid does not give coverage to individuals with assets in excess of $120,000.  Legal Aid states: “client would be left with well over a half a million dollars in assets even after payment of legal fees.”

EXAMPLE #3

Family Tax Credits (tax-credits)

June 11, 2016 Financial Post Personal Finance Plan “Farm Plan Risky for Couple with 4 kids” shows how plethora of tax credits works for this family, Ed 32 and Teresa 33, stay at home spouse have four children ages 5, 3, 1 and newborn.  Government employee Ed brings home $2,680 after monthly tax income.  Net worth is already $502,000 including $200,000 paid for house.  Non taxable Liberal Canada Child Benefit for four children will be $1,811 per month bringing income to $4,491 per month.  (From ages 6 to 17, Canada Child Benefit will be $1,478 per month).

LESSONS LEARNED

These three examples show how the inclusion or exclusion of net worth and assets benefit the wealthy and families more than singles and poor families.  In Example #1, to receive housing assistance only $7,000 is allowed in assets.  Really, that is it? Compare that to Example 3 where a family already having significant net worth will receive benefit upon benefit upon benefit in addition to Family Tax Credits.  In Example #2, this could be said to be a good case where financial fairness has prevailed.  This client has plenty of net worth and assets to pay for $25,000 legal defence.  When the Legal Aid income scales are analyzed, it is apparent they have at least used some form of equivalence scales (finances). Hallelujah, here is one example where a family unit of two is not assessed at a value times two of that of family unit of one!

CONCLUSION

This post is just another example of the blatant hypocrisy and upside-down finances that financial analysts, politicians and government, and families perpetuate by not including net worth and assets in all financial formulas across the board whether they are local, provincial or federal or of a service type such as Legal Aid.  The blatant financial discrimination of singles and the poor continues while the wealthy get to write their own ticket to wealth by paying less and increasing wealth.

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

WHAT IS THE POINT OF POLITICS AND POLITICIANS IN FINANCIAL DISCRIMINATION OF SINGLES?

WHAT IS THE POINT OF POLITICS AND POLITICIANS IN 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).

One wonders what is the point of politics and politicians when there is such gross financial discrimination (along with violation of human rights) of singles.

One online review describes the purpose of government and politics as follows:

The purpose of politics is to enable the members of a society to collectively achieve important human goals they cannot otherwise achieve individually. Through negotiation, debate, legislation and other political structures, politics procures safety, order and general welfare within the state. The question of the precise ends of politics is one of the greatest, and most inconclusive, in philosophy, as manifested by the divisive, heated debates among political parties.

Government is the regulation of human activity, and politics consists of the processes by which a society decides the nature and extent of that regulation. There are many theories concerning the proper role of politics and what aspects of human life should be politicized.

Politics is often involved in prescribing the rules that govern interhuman relationships. It determines laws regarding marriage, parenting, businesses and contracts. It creates laws regulating educational institutions and civil associations. Money always plays a big role in politics. Much time goes into deciding where public money will come from and how resources will be spent.

The activities of government, politics and politicians, however, can go very wrong especially when certain members of a population are underserved or not served at all.  An example of this is the cultural genocide of indigenous persons and violation of rights of targeted groups such as non-white persons (example:  In USA implementation of voter ID cards that would make it harder for the poor to vote).

This blog has attempted to show financial discrimination of singles.  In a financial world where parents and children rule, singles are an invisible minority.  This blog has also described how singles are financially excluded in a political world where ‘selective’ social democracy rules (singles).  The last decade has been especially financially unkind to singles in which married or coupled persons and parents with children have received the most benefits from the time they are married until the time they are seniors and then widowed (decades).

Politicians and government, both in Canada and the USA, continue to leave singles out of their discussions.  Politicians refer mostly to the middle class and families.  Singles or individuals are not included in the definition of family.  Benefits continue to be targeted more towards families, children, and the middle class, rather than singles and the poor.

Some of the reasons for the financial discrimination of singles are voter entitlements and political parties implementing programs strictly for increasing number of votes.  How decisions for these benefits are arrived at are, indeed, a puzzlement as the premises behind these benefits would never work at a business budget level or a family budget level.

Problems with government budgets and formulas include:

    1. Redistributing monies so that benefits are given to one group (families with children) while another group(singles) is forced to pay for them.
    2. No continuity of benefits from one year to another or from one political party to another.  Benefits may be implemented in one year only to be eliminated in the following year.  Over the years, this may result in one group receiving some benefits, while other groups are never able to receive any of the benefits because of the many changes over the years.
    3. There often appears to be no financial expert consultation on the financial impact or efficacy of the implemented benefits.  An example is the ability of family units with children to receive benefits even though they may be quite wealthy and  not working. The reason for this is that programs have been implemented without taking into account the net worth and assets of the groups receiving the benefits.  As a result of the benefits, these groups may become even wealthier.
    4. Financial formulas are created in isolation (federal separate from provincial).  This creates scenarios where benefits upon benefits upon benefits are doled out allowing some groups to achieve considerable incomes levels that they did not have before receiving the benefits.
    5. There appears to be no financial accountability to ensure financial fairness for all citizens.

If businesses or families and  individuals operated their budgets in this manner where the money cannot be followed, they probably would be considered by financial analysts to be poorly run, face audits from the Canada Revenue Agency and possibly even become bankrupt.

CONCLUSION

So, again the question must be asked:  What is the point of politics and politicians when programs are implemented that defy the financial intelligence of basic math, budgeting and common sense financial principles resulting in financial discrimination of certain groups like singles?

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

SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

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

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 responseSingle 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).

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

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.)