CANADIAN SINGLES FACE TERRIBLE FINANCIAL FUTURE UNDER CONSERVATIVE AND LIBERAL PERSONAL FINANCIAL SYSTEMS

Posted on January 31, 2020 by ffswpadmin

(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 – financialfairnessforsingles.ca).

For this discussion singles include millennials not yet married age 18 to 34, singles never married no children age 35 to 65, and early in life divorced persons with no children. Early in life divorced persons are unable to accumulate the same wealth as married persons who have two incomes and benefits times two over many years.

First and foremost, governments, society and married people have no concept about how difficult it is for ‘singles’ to live decent respectful financial lives. Canadian financial system has been setup to give benefits compounded on benefits to the wealthy and the married but leave ‘singles’ out of financial formulas and exclude them from the family definition.

SINGLES DO NOT BENEFIT FROM THEIR INCOMES IN THE SAME WAY AS THE MARRIED AND THE WEALTHY

Singles don’t get to income split, pension split, etc. so they are forced to pay more taxes. It is impossible for singles to save for retirement on a present day $50,000 income plus they are forced to live on a very frugal bare bones living wage income. A single person with a 2019 $50,000 Alberta gross income ($25/hr. and 2,000 worked hours) and $11,000 tax, CPP and EI deductions results in a net income of $39,000 ($19.50/hr.). This bare bones living wage that does not allow for savings, vacations or entertainment. It is impossible to maximize $9,000 RRSP and $6,000 TFSA contributions (35% of $39,000 with tax reductions for RRSP) even though many believe $50,000 is a good income for unattached individuals and single parents. As seniors these singles will likely be living only on CPP and OAS benefits.

Singles are only able to achieve full contributions to RRSP and TFSA with $80,000 income but only can do so while living on a bare bones living wage of $39,000, 18% RRSP of $14,400 and $6,000 TFSA contribution with RRSP tax savings of $4,400 or extra income of $366 per month.

This is completely unrealistic since both OECD and Canadian median income statistics show median incomes for unattached individuals is considerably lower than $80,000 and indeed even $50,000. The OECD calculator (oecd) shows that the median income for Canadian one person households is between $32,621 and $43,495 and income for one person households begins at $86,990 for the top 10%. Canadian median income by households in 2015 (vanierinstitute) shows the total median household income in Canada was approximately $70,300 before taxes ($61,300 after taxes), and $34,200 before taxes (just under $30,900 after taxes) for individuals. The Canadian Market Basket Measure (MBM) or OECD equivalence scales (OECDEquivalenceScales) show that it costs more for singles to live than two person households – if singles have a value of 1.0, it is only 1.4 for two person households, not 2.0.

There are many other ways in which singles are forced by government, society and families to contribute to family financial formulas without being able to benefit themselves from these contributions.

SINGLES DO NOT RECEIVE SAME LEVEL OF BENEFITS AS MARRIED/WEALTHY

From the time a married or coupled with children family unit begins at marriage until death of one of the spouses, it is possible they will receive shower, wedding and baby gifts (there is no such thing as ‘singles showers’), maternity/paternity leaves, child benefits, TFSA benefits times two, RRSP benefits times two, RESP grants, reduced taxes, pension-splitting, no OAS clawback, Involuntary Separation payments and possible survivor pension benefits. There also are probably a great number of years where they never pay full taxes while increasing wealth and many can retire early before the age of 65. Singles are not able to achieve these same level of benefits and tax relief.

Married people fail to realize that they get two inheritances (it is quite funny watching married people struggle with this fact until you tell them one heritance comes from the wife’s side and the second from the husband’s side) Singles get one inheritance.

EI CONTRIBUTIONS AND BENEFITS

Government, families and society fail to recognize or even realize that singles often contribute to EI without ever using these benefits in their employment lifetime. Instead contributions (estimated $35,000 at $800 to $900 EI contributions over forty years – investment potential not included) are forfeited to be used by other persons particularly for maternity/paternity benefits. Singles are forced to help pay for maternity/paternity benefits for not only one generation, but possibly two generations. Question: when do EI maternity/paternity benefit payouts outpace the contributions of two working parents, especially when they retire early at age 55 and not contribute their full share to EI?

CPP CONTRIBUTIONS AND BENEFITS

The CPP death benefit is maxed at $2,500, is not indexed and not increased for many years. After forty years of employment with average $2,500 annual CPP contributions will total $100,000. If a single person dies one day after the age of 65 the deceased single person’s estate will only receive $2,500 death benefit which doesn’t even cover funeral costs. Total of $100,000 contribution is forfeited to be used by the survivors of married or coupled households.

And now Liberal Prime Minister Trudeau wants to increase surviving spousal CPP benefits by 25% while singles will not receive equivalent increase??? Conservative Party’s Motion 110 proposes investigation to ensure parents with early infant deaths do not suffer undue financial or emotional hardship due to government programming design, particularly from Employment Insurance Parental Benefits. Both Conservatives and Liberals continue to implement financial death formulas that benefit only families and the married.

SINGLES AND EMPLOYERS PENALIZED FOR OVERCONTRIBUTIONS OF EI AND CPP

When singles attempt to increase their financial worth by working multiple jobs, they will not be able to contribute to EI and CPP beyond the individual maximum limits. Meanwhile, married persons with both spouses working can contribute to maximum limits time two. This means singles will never be able to achieve the same EI and CPP benefits afforded to married households but Market Basket Measure shows it costs them more to live than two person households.

The irony of singles having to receive a rebate of EI and CPP contributions is that the rebate is paid to the employee, not the employer. In other words, the employer will have also made an overcontribution, but is not able to collect a rebate on the overcontribution. Their overpayment will be forfeited and added to benefits pot.

(Caveat: Uncertain how recent changes to CPP contributions will affect overpayment levels).

ENTREPRENEURS WHO HAVE A MARITAL STATUS OF ‘SINGLE’ WILL PROBABLY PAY MORE INCOME TAX SINCE THEY CAN’T “INCOME SPRINKLE”, etc.

Personal responsibility espoused by Conservatives equals gaslighting in its purest form.

Re small business earners, excerpt from a newspaper article states that “Small business owners, including incorporated professionals such as doctors, lawyers, accountants and others, will likely face a higher tax bill in the years ahead as a result of (Liberal) Finance Minister announcement this week targeting several common, and until now, perfectly legal, tax strategies used in conjunction with private corporations.

The strategies under attack can be categorized into three main areas: income sprinkling, earning passive investment income in a corporation and converting a corporation’s ordinary income into tax-preferred capital gains.

Among these changes, it’s the first one — income sprinkling — which is perhaps deemed the most offensive of the three and the one that will likely have the broadest financial impact on small business owners and incorporated professionals”.

What this newspaper article fails to recognize is that information is only talking about families. It fails to show how entrepreneurs who are single cannot use these benefits since they can only be personally responsible only to themselves since they have no children or spouses. They, therefore, will likely pay more taxes and will possibly be more likely to have business failures as entrepreneurs.

“Income sprinkling” describes how some families use private corporations to sprinkle income among family members. In a typical example, dividends that would have been received by the primary owner/manager of the private corporation, say, mom or dad, would instead be paid to the spouse, partner or kids of the primary shareholder, who are often in lower tax brackets than the primary owner/manager and thus the family’s total tax bill would be reduced. When it comes to income sprinkling of salary income, this rule is meant to prevent a parent who owns a corporation from paying his spouse or child an annual salary when he or she doesn’t actually perform any work or provide services to the business. In the past transferring dividends to children under the age of 18 was eliminated (this blog writer’s opinion – this was the right and fair thing to do as children would benefit from double dipping while using multiple combined medical and educational services and receiving concomitant tax free Canada Child Benefits).

Conservatives in the recent election promised to reverse some of these entrepreneurship rules changed by the Liberals, however, the election resulted in Liberals winning a minority government (example of Conservatives doing the wrong thing that would increase financial discrimination of single marital status entrepreneurs).

Since singles never married no children, millennials not yet married and early in life divorced persons without children in their financial circles can only be basically financially responsible to themselves, ‘Income sprinkling’, distribute dividends to family members, etc. is of no benefit to these entrepreneurs so they will pay more taxes. Why would singles and millennials not yet married even try entrepreneurship when they know from the get go that they will not have the same advantage, Alberta or otherwise, to married and wealthy entrepreneurs with spouses and children? Singles are forced to be more personally responsible since they do not receive equivalent benefits in financial formulas. Tax fairness needs to be ensured regardless of marital status and how income is earned.

Income, taxes and benefits, etc. define who employees are and how loyal they are to their employers. Without change to where there is fairness and equality for single employees in pay, pension, taxes, benefits, etc. the trend where young single employees have no sense of loyalty to their employers (revolving door of quitting and applying for job after job after job) will only continue and get worse. This also applies to senior single employees who have tried lobbying and using righteous anger regarding financial discrimination and singlism in the workplace and in society but get nowhere because their employers, politicians and society choose to blatantly not listen.

THE FINANCIAL HYPOCRISY, GREED, SELFISHNESS OF THE MARRIED AND THE WEALTHY AS SHOWN IN FINANCIAL ANALYSTS EVALUATIONS WHERE IMPACT ON NEVER MARRIED SINGLES IS COMPLETELY ABSENT AND INVISIBLE

Financial Post article “Couple with a big age gap forced to contemplate impact of an early death” (alberta-couple-with-big-age-gap-worry)

Article states wife (Lori) could lose $17,000 a year in income if her husband dies first since there is a ten year age difference. They have financial assets of $1,741,500 including a $650,000 house. At age 65 couple is estimated to have income of $6,000 per month ($72,000 annual net income after splits of eligible income, no tax on TFSA distributions and reduced income tax to average 15 per cent. How does single person ever only pay 15%?

If husband dies early, the financial planner estimates that Lori could lose $17,008 in gross annual income per year and potentially pay a higher tax on her remaining income. The reduced income could result from 1) loss of husband’s OAS, 2) part of two of his work pensions, 3) most of his CPP benefits and 4) the inability to split income, but 5) still have $650,000 house. All of these are not available to singles throughout their entire senior lives.

It is distressing to never married singles that this couple should be worried when it appears they are spending over $15,000 annually on travel and entertainment. If they are so worried that Lori’s standard of living will be reduced, why can’t they take personal responsibility, work till age 65, reduce some of their excessive spending and save that money to be used if husband dies early? How about paying fair share of taxes and maintaining lower standard of living that singles never married have to live every day of their lives?

It is also distressing to never married singles that Liberal Prime Minister Trudeau and other politicians are obsessing about benefits for surviving spouses. He is talking about increasing CPP benefits for surviving spouses by 25%. Twenty five percent! Will never married singles get same equivalent amount? Who is paying for this increase? Lori retired at age 55 so why should she receive an extra 25% when she hasn’t contributed to the full amount of CPP?

Michael Lewis, author of “The Undoing Project” book, describes how a Nobel Prize-winning theory of the mind altered our perception of reality. Two Israeli psychologists, Daniel Kahneman and Amos Tversky’s work created the field of behavioral economics which revolutionized thinking of how the human mind works when forced to make judgements in uncertain situations. An example is outcomes of surgery where there might be a 5% chance of death versus 95% chance of surviving the surgery. When patients are presented with 95% chance of survival rather than 5% death rate, they are more likely to go through with the surgery. The same judgement should apply to the hypocrisy of the wealthy.

For upper class and wealthy, please don’t ‘cry me a river’. Wealthy need to look at what they have left after taxation instead of what is being taken from them in taxation.

EFFECTS OF LOW INCOME ON BRAIN AND MENTAL HEALTH ESPECIALLY THE YOUNG

Government, politicians and society need to educate themselves on the effects that low income has on the brain by reducing connective white matter and increasing worse structural integrity as outlined in first article listed below. The second article outlines how Alberta university students are facing food insecurity and even homelessness. One of the reasons in particular for increased university costs is the massive increase in textbook costs – American data suggest textbook costs increased by more than 800 per cent between 1978 and 2013.

The information from the two articles has been submitted as an attachment.

1) “UNPREDICTABLE EMPLOYMENT MAY BE BAD FOR BRAIN HEALTH” by Lisa Rapaport, October10, 2019 (unpredictable-income) and 2) “FINANCIAL AND MENTAL HEALTH PRESSURES MOUNT ON STUDENTS” by Joel Schlesinger (unable to attach link).

THE CANADIAN PERSONAL FINANCIAL SYSTEM IS FRAGMENTED AND BROKEN

There is a complete fragmentation of the Canadian personal financial system where politicians through upmanship throw money at certain populations, include the wealthy but exclude certain populations such as singles, the only reason being to get votes.

Conservatives continue to talk ad nauseum about socialism of the left, but are ‘brain dead’ to the selective privileged socialism they practise every day for the wealthy.

The wealthy often aren’t employed for as many years as singles, yet they believe they should be able to get full CPP benefits and even extend these to surviving spouses (Trudeau to increase by 25% for surviving spouses) some of whom haven’t even been employed for 75% of the employment lifetime of singles.

The Canadian financial system for personal finances is broken. Continuation of overspending for the wealthy and the married will lad to bankruptcy of the personal financial system.

Solutions:

Instead of having a Minister for the Middle Class, a non partisan committee with participation by all political parties is needed to annually review financial formulas and personal benefits based on application of MBM/OECD. (See oecd for handy calculator by country and the number of persons in households). More ‘zooming out’ and balance between ‘right and left brain thinking’ (see below for explanation) needs to replace the present narrow focus of only financially privileging the wealthy and the married.

To counterbalance the net income, tax avoidance and tax free selective socialistic privileging for the married and the wealthy, it is crucial that lifetime federal and provincial income tax be immediately and exclusively completely eliminated for singles and single parents with incomes under $50,000 so they also can save for their retirements. (This change would be the equivalent of about $7,000 and would not exceed the many privileges such as CCB benefits and tax loopholes for the wealthy and the married).

Instead of singles subsidizing the married, the married should have to purchase mandatory term life insurance just like vehicle and house insurance.

The ‘financial pimping’ of singles and millennials not yet married by the married and the wealthy has to stop. Singles are tired of being financially pimped by their own wealthy parents, wealthy married siblings and wealthy married fellow employees. When singles are forced further into poverty to the point of homelessness, what will you do then?

The financial imbalance between the rich and the poor, singles and married only leads to populist anger, male millennial suicides (Alberta) and despair. There already has been created a genocide of indigenous peoples. We don’t need a financial genocide of singles.

TWO THEORIES ON WHY FINANCIAL SYSTEMS ARE FAILING AND INDEED MAY RESULT IN THE DEMISE OF CIVILIZATION

Governments, politicians, and society continue to manipulate the financial system so that selective socialistic benefits are given unequally to the married and the wealthy. Some believe continued progression of this inequality will lead to the degradation of civilization and, indeed, may even the demise of civilization. Indeed, even higher educational institutions of learning have migrated to teaching that is focused more to the narrowness of ‘left brain thinking’ (enormous capacity for denial and capacity to ignore things and keep them shut out – students specialize in narrow fields. Theories, and categories become important) and ‘zooming in’ (think smaller by focusing on vulnerability of poverty, not the wage of inequality) without ‘zooming out’ (getting people to care about problems first by ‘zooming in’ on a vivid person and then getting them to care by ‘zooming out’ from persons to systems”. To fight inequality means to change systems as a group of people).

‘Personal responsibility’ smacks of individualism instead of betterment of society as a whole.

Further explanation of the two theories outline why this may be happening.

The first is by Iain McGilchist and “The Divided Brain” from the Documentary Channel. He states that imbalance towards left brain hemisphere thinking gives narrow, sharply focused attention to detail without understanding the larger context resulting in bureaucracy, excessive concentration on money and wealth, bad politics and warped economic systems. Reduced role of right brain hemisphere thinking results in decreased ability to relate to things and understand them as a whole.

The second theory by Anand Giriharadas, “Winners Take All” says the same thing but in a different way. He refers to ‘zooming in’ and ‘zooming out’. ‘Zooming in’ causes us to think smaller by focusing on vulnerability of poverty, not the wage of inequality. ‘Zooming out’ causes us to care by ‘zooming out’ from persons to systems”. To fight inequality means to change systems as a group of people.

Both theories show how higher learning institutions have been affected by a narrowed focus on learning which then translates into a narrowed kind of thinking by politicians and society when these graduates get out into the real world.

Synopsis of Iain McGilchist and “The Divided Brain” from the Documentary Channel

The two hemispheres of the brain have styles or takes on the world, they see things differently, have different values, prioritize differently.

The left hemisphere’s goal is to enable us to manipulate things (like a calculator) whereas the role of the right brain is to relate to things and understand them as a whole ( like a tree branches growing out of the ground and sprouting out and upwards). Two ways of thinking about things are both needed but at the same time are compatible.

McGilchrist claims that the left hemisphere is gradually colonizing our experiences of the world with potentially disastrous implications. The way of thinking which is too mechanistic has taken over our way of thinking. We behave like we have right hemisphere damage. Do we pay a price for being too left brain centered? It has made us enormously powerful; it has enabled us to become wealthy, but it also means we have lost the means to understand the world.

Could the problems of the modern world be influenced by an imbalance of the human brain? And what does that imply about our future? For McGilchrist the problem is not only bad politics or a warped economic system. The problem is inside our modern brain.

Experiments showed that each hemisphere had a different way of looking at the world. The left talks and is analytical and the right pulls stuff together. Each hemisphere engages in everything, so each hemisphere, right and left, is involved in reason and language and emotion but in crucially different ways.

Why does the brain have two centres of consciousness, each capable of maintaining consciousness on its own but in a different way? The left brain will recognize parts i.e. (picture of a human cut in pieces) of a body to recognize a human , but the right brain requires the correct position of the human body to recognize it as a human. Both hemispheres are doing an excellent job and both hemispheres can contribute and both hemispheres can decide human or non human but both do it with different cognitive strategies.

He observed that the left hemisphere gives narrow, sharply focused attention to detail without understanding the larger context. It sees objects in relation to their usefulness. It is in charge of the right hand which has the power to manipulate things such as tools and to technology. As it can’t make human connections it does not not understand relationships, humor and tone of voice. Things and people are not unique and individual but groups that it can organize, sort and file in a system of rules and linear connections. On its own it has no sense of the whole. Even people are seen as body parts. The world of the left hemisphere is lifeless. It shatters the world into an assortment of bits without meaning.

The right hemisphere by contrast sees the broad view of the world. It is the master of the brain. It perceives an interconnected world. It understands relationships, body language, facial expressions and implicit meaning. The right hemisphere engages with life, understands movement, story and metaphor. It perceives how humanity fits into the whole of creation.

The divided brain give us two types of attention, two ways of engaging with the world. It has made us the most powerful species on earth.

But the left hemisphere’s narrow kind of attention reminded McGilchrist of something else. Our world! I began thinking how everything in public life has become more regulated, more rule bound, more explicit. For the last hundred years the way of thinking which is reduct to mechanistic has taken us over. It has enabled us to manipulate the world, to use resources, to become wealthy, but it has also meant we have lost means to feel satisfaction and fulfillment through our place in the world. We have created outside ourselves a world which looks very much like the interior world of the left hemisphere, rigid lines of things that were rolled out mechanically and were non unique. Bureaucracy is in its element. It depends on qualities which the left hemisphere provides: organizability, animity, standardization, uniformity, abstraction and so on. Systems designed to maximize utility with loss of cohesion socially because the left hemisphere needs control. There is a lack of trust and a lot of paranoia with the use of CCTVs and monitoring of all kinds .

The left hemisphere is the quick and dirty one because it has to make action. It likes things to be black and white. People think that, well, the left hemisphere surely is the basis for intelligence, it is the one that does all that analysis. But that is not the case. There is a lot of evidence that that the really critical one from the point of view of intelligence is the right hemisphere. Another important difference, a very important difference, is that between fixity and flow. Things in the left hemisphere are fixed whereas in the right hemisphere flow is what it sees and understands. Now that is very profound. That actually changes the whole nature of what life is. Nothing is just isolated. It is always part of a flow. Things can only be understood in context when you take them out. They change when you grab them and put them in the spotlight of attention and make them explicit.

“One of the primary features of the left hemisphere is that you find this enormous capacity for denial, this capacity to ignore things and keep them shut out. The left hemisphere that wants to slice and dice and execute quickly. To make quick decisions the left hemisphere relies on abstractions, categories and models of the world.

Economics detached from a robust resourceful picture of human well-being is very dangerous and that is what we are living with in large parts of the globe. We seem to take it as absolutely self evident that unlimited material growth is the best thing that we could hope for. The biggest single task is thinking again through that question of growth and why it is so obvious and target why some kinds of growth are privileged over the notion of growth of real human well-being and understanding.

The school curriculum moves away from the right hemisphere resulting in an imbalance between right and left hemisphere learning. In universities the learning becomes even more left hemisphere dominant. The student specialize in narrow fields. Theories, and categories become important.

McGilchrist: (Consequences- riots, protests) What certainly would not happen is that things would be calm because the left hemisphere is emotional and one emotion that lateralizes particularly clearly is anger and it lateralizes to the left. Discourse in public will become marked by anger and aggression. But, according to the right hemisphere everything is connected to everything else. It is about the relationships.

McGilchrist notes three periods where there was a flourishing of civilization in the west – Athens in the sixth century, the beginning of the empire in Rome, and early Renaissance. The civilization in these three cases showed a marvellous balance in the right hemisphere and left hemisphere ways of thinking, but in each case it ended up with a movement further and further towards the left hemisphere after which the civilization collapsed.

What McGilchrist’s work can do is point us in the direction toward a solution. If we can get better at seeing things more holistically, more specifically, more in context, if we can get better at systematically resisting attempts to turn things into algorithms, to always measure, to always quantify, if we can get better and more robust at doing that, the world will begin to steer towards a better place.

We need a better balance between the right and left hemisphere. We need to look at the world in a different way.

Einstein said the rational mind is the faithful servant, but the intuitive mind is a priceless gift. We live in a world that honors the servant that has forgotten the gift. We do need a paradigm shift, it is not about little things here and there. It is about the whole way we can see what a human being is, what the world is and what our relationship to it is.

Synopsis of “Winners Take All” by Anand Giriharadas (italics are blog author’s comments)

MarketWorld (capitalism) believes social change should be pursued through free market and voluntary actions without public life, law and reform of systems that people share in common.

MarketWorld “thought leader” thinkers (capitalists) promote so called ‘world-changing’ ideas with little risk to themselves. Their ideas cause us to “zoom in” and think smaller by focusing on vulnerability of poverty, not the wage of inequality. They don’t like “social justice” and “inequality” words, but rather use “poverty” and “fairness” while speaking of “opportunity”.

“Public intellectual” thinkers (conscious capitalists) counterbalance this thinking and change the trajectory of MarketWorld “by getting people to care about problems first by ‘zooming in’ on a vivid person and then getting them to care by ‘zooming out’ from persons to systems”. To fight inequality means to change systems as a group of people.

“Thought leaders” have permeated higher learning institutions by purposefully changing the language in which public spheres think and act. Young people are taught to see social problems in a “zoom in” fashion by confining questioning to what socially minded businesses they can start up like “buy one, give one”, but not inequality.

To counteract and provide balance to MarketWorld “our political institutions–laws, constitutions, regulations, taxes, shared infrastructure: these million little pieces provide a counterbalance to help hold democratic capitalistic civilizations together.”

Blog author’s thoughts on this theory: The one-sided financial hegemony of MarketWorlders has created the present day ‘graft and greed’ college financial scandal, FAA allowing Boeing to “self-inspect” and SNC Lavalin corruption.

One word comes to mind–brainwashing, or at the very least gaslighting. MarketWorlders have done a very good job of gaslighting the political, financial and higher learning powers that be.

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

CANADA CHILD BENEFIT PROGRAM SHOWS FINANCIAL DISCRIMINATION AT ITS BEST

Posted on July 25, 2016 by ffswpadmin

CANADA CHILD BENEFIT PROGRAM SHOWS FINANCIAL DISCRIMINATION AT ITS BEST

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

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

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

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

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

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

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

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

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

SYNOPSIS OF APPROXIMATELY 2500 READER COMMENTS FROM TWO NEWS ARTICLES

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

-Negative comments (most were negative)

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

-Positive comments (very few)

-Bashing of political parties (Liberals versus Conservatives)

-Worried about future debt generated by benefits

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

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

-Program will be abused

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

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

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

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

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

-Immigrants

-Education

-Advantages of Child Benefits

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

-Eighteen years a long time for benefits

-Misconceptions about what is benefit versus welfare

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

-Net worth and assets

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

Reader comments regarding SINGLES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ANALYSIS OF COMMENTS REGARDING SINGLES

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

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

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

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

Reader Comments regarding NET WORTH AND ASSETS

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

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

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

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

ANALYSIS OF COMMENT REGARDING NET WORTH AND ASSETS

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

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

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

CONCLUSION

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

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

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

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

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

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

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

Additional Reader Comments: click on link below:

CANADACHILDBENEFITSCOMMENTS2 (1)

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

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

Posted on July 10, 2016 by ffswpadmin

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CONCLUSION

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

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

FALSE ASSUMPTIONS- ‘FOUR WAYS SINGLE SENIORS LOSE OUT’

Posted on December 2, 2015 by ffswpadmin

FALSE ASSUMPTIONS OF ARTICLE ‘FOUR WAYS SINGLE SENIORS LOSE OUT’

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

(On searching internet a few days ago this article was found – ‘Four ways single seniors lose out’ by Ted Rechtshaffen, Financial Post October 13, 2012. While the intentions of the article are great, the assumptions and categorization of singles is false.)

In his October 13, 2012 article Ted Rechtshaffen (four-ways-single-seniors-lose-out) talks about four ways that single seniors financially lose out. Portions of the article are outlined in part here (full article is available online):

Rechtshaffen states:

“Being part of a couple in old age has so many tax advantages that losing a spouse through divorce or death can be very costly. Given the fact that so many more single seniors are female, this unfairness is almost an added tax on women. Becoming single in old age could cost you tens of thousands of dollars through no fault of your own. The current tax and pension system in Canada is significantly tilted to benefit couples over singles once you are age 65 or more….

Here are four ways that single seniors lose out:

1. There is no one to split income with. Since the rules changed to allow for income splitting of almost all income for those aged 65 or older, it has meaningfully lowered tax rates for some…If you are single, you are stuck with the higher tax bill.

2. CPP (Canadian Pension Plan) haircut… If one passes away, the government doesn’t pay out more than the maximum for CPP to the surviving spouse. They will top up someone’s CPP if it is below the maximum, but in this case, they simply lose out almost $12,000 a year.

3. RSP/RIF (Retirement Savings Plan/Retirement Income Fund) gets folded into one account. This becomes important as you get older and a larger amount of money is withdrawn by a single person each year — and taxed on income…her tax bill will be much larger… than the combined tax bill the year before, even though they have essentially the same assets, and roughly the same income is withdrawn.

4. Old Age Security (OAS). The married couple with $50,000 of income each, both qualify for full Old Age Security —… If the husband passes away, you lose his OAS, about $6,500. On top of that, in the example in #3, the wife now has a minimum RIF income…and combined with CPP and any other income, she is now getting OAS clawed back.

The clawback starts at $69,562, and the OAS declines by 15¢ for every $1 of income beyond $69,562. If we assume that the widow now has an income of $80,000, her OAS will be cut to $414.50 a month or another $1,500 annual hit simply because she is now single. In total, almost $8,000 of Old Age Security has now disappeared. As you can see, a couple’s net after-tax income can drop as much as $25,000 after one becomes single.

On the other side, there is no question that expenses will decline being one person instead of two, but the expenses don’t drop in half. We usually see a decline of about 15% to 30%, because items like housing and utilities usually don’t change much, and many other expenses only see small declines.

In one analysis our company did comparing the ultimate estate size of a couple who both pass away at age 90, as compared to one where one of them passes away at age 70 and the other lives to 90, the estate size was over $500,000 larger when both lived to age 90 – even with higher expenses.

So the question becomes, what can you do about this?

I have three suggestions:

1. Write a letter to your MP along with this article, and demand that the tax system be made more fair for single seniors. You may also want to send a letter to Status of Women Minister…as this issue clearly affects women more than men.

2. Look at having permanent life insurance on both members of a couple to compensate for the gaps. Many people have life insurance that they drop after a certain age. The life insurance option certainly isn’t a necessity, but can be a solution that provides a better return on investment than many alternatives and covers off this gap well. If you have sufficient wealth that you will be leaving a meaningful estate anyway, this usually will grow the overall estate value as compared to not having the insurance — and not hurt your standard of living in any way.

3. Consider a common law relationship for tax purposes. I am only half joking. If two single seniors get together and write a pre-nuptial agreement to protect assets in the case of a separation or death, you can both benefit from the tax savings.

Ultimately, the status quo is simply unfair to single seniors, and that needs to change.”

Ted Rechtshaffen is president and wealth advisor at TriDelta Financial, a boutique wealth management and planning firm. www.tridelta.ca

The first thing that is so wrong with this article is the definition of single versus married/partnered in marital status. The senior persons mentioned in this article are not single. According to Statistics Canada definitions, they are widowed or divorced/separated (after age 65). Persons who are true and ever singles have none of the financial benefits/losses mentioned in this article. And if persons are divorced/separated, especially at an early stage of their marriage, they also do not have many of the benefits/losses mentioned here. (The earlier the divorce/separation in life, the greater is the loss of benefits that married/coupled persons enjoy).

Being part of a couple in old age has so many tax advantages…How true!
The current tax and pension system in Canada is significantly tilted to benefit couples over singles once you are age 65 or more….This statement is not completely true. The system is even more unfair for singles who are true (‘ever’) singles, not widows. Singles who are true singles have been excluded from the discussion.
Benefits – Article correctly states that pension splitting, CPP, RSP/RIF and OAS are benefits to married people because the couple receives these benefits times two and is able to pension split, but widowed persons have less of these benefits. To this, true singles and early divorced/separated persons ask the question, “so what”? If widowed persons are now so called ‘single’ they should have to live same standard of living, not better than, true singles and early divorced/separated persons.
Losses – Losses are correctly stated, however, true (‘ever’) singles and early divorced/separated persons have a hard time understanding why this is a hardship. Widowers are now ‘single’ so why can’t they live the same lifestyle as true singles and early divorced/separated persons?
Higher tax bill – Why is this a problem? Widowed persons are now on more equal playing field to true single and early divorced/separated persons.
Clawback – Again why is this a problem? True singles and early divorced/separated persons enjoy none of these benefits. Also, many true (ever) singles and early divorced/separated Canadian persons do not have the luxury of a $70,000 income.

Estate size $500,000 less
– Just more proof that married/coupled persons want it all and want more, more and more from the time of marriage until the death of their spouse/partner and even after the death of their spouse/partner. In article ‘The Added Price of Single Life?’ by Bella Depaulo (belladepaulo) talks about a A British study that showed true singles lose equivalent of $380,000 USA over a lifetime to married persons, so what is the problem with losing $500,000? Another good article is ‘The high price of being single in America’ theatlantic.com.

The article then goes on to make these enlightening points:

“There is no question that expenses will decline being one person instead of two, but the expenses don’t drop in half. We usually see a decline of about 15% to 30%, because items like housing and utilities usually don’t change much, and many other expenses only see small declines“.

It would be exceedingly wonderful if government, businesses, society and families (married/partnered) would recognize this fact for true singles and early divorced/separated persons instead of telling them “it must be their lifestyle” that is making them poor. Fifteen to 30 percent decline? Wow, singles would love these percentages to also be used for them especially since 60 to 70% income of married or partnered persons is often used (i.e. MoneySense articles). If only true singles and early divorced persons could say they should have the same benefits as widowed persons, that is, 70 to 85% income of married or partnered persons.

Unfair to single seniors? The most unfairness is to true singles and divorced/separated persons, not widows.

Regarding the suggestions that are made:

“Write your MP and demand that tax system be made more fair for single seniors”. The article refers only to married/coupled and divorced/separated seniors after the age of 65. It dis criminates by exclusion against true singles and early divorced/separated persons.

“Look at having permanent life insurance on both members of a couple to compensate for the gaps”. This is a great idea. The author of this blog has long thought this would be a solution to providing benefits to survivors once spouses have died and they would actually be paying for those benefits through premiums. At the present time, survivors are getting marital manna benefits, but then are asking for more as this article suggests. They are also getting survivors benefits from pension plans and paying very little for these benefits. An example is a pension plan where only $100 is deducted each month from living spouse for pension benefits in the thousand dollar range. Deduction of $100 per month or $1200 per year does not pay for survivor pension that is two-thirds of full pension of the spouse. Life insurance plans at present time do not extend to 90 years of age without excessive premiums. To stop all the marital manna benefits that survivors get, life insurance plans need to be extended to 90 years of age, and spouses need to pay premiums for entire life. Another critical thinking, outside the box idea is to eliminate marital manna benefits and make permanent term life insurance plans compulsory, just like house and car insurance, so that married/coupled persons would actually pay for the benefits they receive. This methodology would allow true singles and early divorced/separated persons to be on more level financial playing field to married/coupled persons since generally true singles do not need life insurance. A longer term for collecting premiums should help to offset the costs of the premiums that will be paid out. Permanent life insurance would ease burden that married/partnered benefits place on government programs. There also would then be more monies to bring government programs for true singles and early divorced/separated persons to have same standard of living as married/coupled and widowed persons.

Consider a common law relationship for tax purposes. He says he is only half kidding. Really? According to Canada Revenue Agency rules this is not legal. Ever singles and divorced/separated persons cannot just shack up with someone for tax purposes. More true singles and early divorced/separated persons would be doing this if they could.

Lessons learned

Writers who wish to write about the financial affairs of singles should use correct definitions for singles. The persons in this article were not true singles. In other words, correctly identify who your audience is.
Writers of financial institutions who wish to write about the financial affair of singles should include all singles in their discussions. To do anything less is discriminatory and disrespectful to singles who truly are single.
By all means vote and contact your Members of Parliament, but insist that true singles and early divorced/separated persons (senior and otherwise) be included in financial discussions and formulas equal to and at the same level as widows and middle class families. (Seventy to 85% income of married/coupled persons would be wonderful).

The blog posted here is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

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