Category Archives: reward programs

CAUSE AND EFFECT OF FINANCIAL POLICIES PROMOTING FINANCIAL DISCRIMINATION OF SINGLES AND THE POOR

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CAUSE AND EFFECT OF FINANCIAL POLICIES 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.)

This blog has attempted to describe some of the many government, politician, business and family financial policy decisions that lead to financial discrimination of singles and the poor.

The question that can be asked is:  “Is there a  cause and effect relationship to these decisions?”

From Wikipedia and other online sources (study) the definition of ‘cause and effect’ is follows: – Causality (also referred to as causation, or cause and effect) is the agency or efficacy that connects one process (the cause) with another process or state (the effect), where the first is understood to be partly responsible for the second, and the second is dependent on the first. In general, a process has many causes, which are said to be causal factors for it, and all lie in its past. An effect can in turn be a cause of many other effects.

A cause-effect relationship is a relationship in which one event (the cause) makes another event happen (the effect). One cause can have several effects. Cause-Effect Criteria – In order to establish a cause-effect relationship, three criteria must be met. The first criterion is that the cause has to occur before the effect. If the causes occurred before the effects, then the first criterion is met.  Second, whenever the cause happens, the effect must also occur.  Consequently, if the cause does not happen, then the effect must not take place. The strength of the cause also determines the strength of the effect when criterion two is met.  The final criterion is that there are no other factors that can explain the relationship between the cause and effect.

A cause is why something happens.  An effect is what happens.

While no scientific ‘cause and effect’ relationship (i.e. fishbone diagrams) has been applied in this blog, certainly many of the financial discriminatory effects of policy decisions (or causes) have been described.  Some of these effects are listed below.

Boutique tax credits

  • Every political party has introduced tax credits to give financial benefits to certain members of the population more than others. June 16/16 (credit)

Business policies

  • Financial decisions by businesses such as not wanting to have minimum wage increase and not wishing to pay proposed increase of CPP employer contributions continue to help disintegrate the financial well being of singles and the poor. Sept. 12/16 (canada-pension-plan)

CPP

  • Financial discrimination of the CPP plan.  Aug 31/16 (plan)

CPP enhancements

  • Financial discrimination of CPP enhancements includes higher income earners only paying 8 percent instead of 11 percent CPP contributions on earnings between $72,000 and $82,700. Sept 12/16 (canada-pension-plan)

Family tax credits

  • Marital manna and family tax credits given over the years have continually increased the financial discrimination of singles and the poor.  Many of these benefits have been implemented by the Federal Conservative government over the last decade and perpetuated by the Federal Liberal party since coming into power in 2015 as well as provincial parties.  Aug 2/16 (credits)

Housing Affordability

  • Just 1,048 new affordable housing units in Calgary have been built over the past 14 years; the need for affordable housing was great in 2002 and it remains so today (most of these years were under provincial forty year reign of the Conservative party). July 17/16 (housing)
  • Homelessness – 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)…attacking housing affordability from the other side, by reducing housing costs, would also be effective….vast majority of homeless shelter users are single. May 23, 2016 (homelessness) and July 17/16 (housing)

Housing Upside Down Pricing and Financing

  • Upside down pricing of housing where purchasers of smaller units pay more per square foot means they will proportionately pay more house taxes, education taxes, mortgage interest and real estate fees on less house and less take home pay. Nov. 19/15 (upside-down)

Income tax privileging for the middle class and the wealthy

  • Tax cuts on both federal and provincial levels have targeted the middle class and the wealthy while making poor pay same amount or more in taxes.
  • Alberta flat tax of 10 percent increased from 8 percent for low income. May 23/16 (homelessness) 
  • Federal tax by federal Liberal party decreased by 1.5% for those earning between $45,282 and $90,563. Aug. 23/16 (family)

Lost Dollar value

  • Lost dollar value list was created to show lost dollars experienced by singles because married or coupled persons are able to achieve more financial benefits.  Some of these include pension splitting, reward programs and Employment Insurance (EI). April 10/16 (value)

Marital manna benefits

  • 1% spousal lending rate, spousal RRSP, TFSAs times two with no cap on total amounts accumulated over years are all within legal limits of financial laws – Six Reasons….(six)

Marrying for money pays off

  • Study shows persons who marry and stay married accumulate nearly twice as much personal wealth as a person who is single or divorced.  Jan. 17/16 (pays)

Maternity and parental benefits

  • Studies have shown that middle class and wealthy families benefit more from maternity and parental benefits.  Many poor families cannot afford take full maternity and parental leave.  August 23/17 (family)

Minimum wage/living wage

  • Decisions and arguments to not increase minimum wage or implement living wage have a dramatic impact on financial well being of singles and the poor.  May 4/16 (discriminatory) and Sept. 12/16 (canada-pension-plan)

Net worth and assets

  • When net worth and assets are not included in family benefit formulas, benefits are often given to those who need these benefits less (middle class and the wealthy) than the poor who have less net worth and assets.  August 17/16 (assets)

OAS recovery tax (OAS clawback)

  • OAS clawback benefits wealthy couples and some widows the most.  OAS for couples only begins at net income of $145,618 ($72,809 per person) thus allowing them to receive full OAS of $13,760 as a couple.  Not many senior singles (except some widowed persons) who could ever hope to achieve a net income of $72,809. Aug. 29/16 (oas)

Pension splitting

  • Pension splitting benefits only wealthy married or coupled family units.  Singles don’t get to pension split. Jan. 31/16 (government) and May 4/16 (selective).

Reward programs, company perks, money benefit programs, and fee schedules benefit families the most

‘Selective’ social democracy

  • There has been much that is good about democratic socialism, but there also has been some negative outcomes .  One outcome is ‘selective’ democratic socialism where certain members of society receive more social benefits than others. May 4/16 (selective)

Senior singles pay more

  • Senior singles often ‘pay more, get less’ because they are not included equally in financial formulas.  Singles also help support widowed persons and survivor pension plans. Dec. 22/15 (senior) and June 2/16 (retirement)

Singles not included or improperly identified in family definition

  • Ever singles (never married, no kids) are often not properly identified in family definitions.  Widowed persons and single parents are not ever singles.  Widowed persons and single parents are afforded some benefits that ever singles do not receive.  Dec. 2/15 (false) and Aug. 7/16 (definition)

CONCLUSION

It is very clear from the many examples above that government, politician, business and family financial policy decisions are often made in isolation and in financial silo fashion.  Continuation of these practises without a clear path to proper evaluation of all ‘across the board’ financial formulas and their ‘cause and effect’ on each other will only lead to perverse financial privileging of the middle class and wealthy while continuing financial discrimination of ever singles, early in life divorced singles, single parents 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.)

REWARD PROGRAM DISCRIMINATION OF SINGLES AND POOR FAMILIES CONTINUES

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REWARD PROGRAM DISCRIMINATION OF SINGLES AND POOR FAMILIES CONTINUES

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

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

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

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

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

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

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

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

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

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

LOST DOLLAR VALUE LIST TO DATE AND FINANCIAL DISCRIMINATION OF SINGLES

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LOST DOLLAR VALUE LIST TO DATE

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

The Lost Dollar Value entered in posts to date (updated April 28, 2018) have been collected and are itemized below.  Description of Lost Dollar Value item as well as the date of the post in which item was described are given below the table.

lost dollar value table2018

  1. Tax Free Savings Account (TFSA) Boondoggle (November 8, 2015 post) 2015/11/08/tfsa – If age 25 to age 65 or forty years and annual contribution of $5,000 is calculated for maximum contribution of TFSA that can be used by spouse number two, then calculated lost dollar value equals $200,000 ($5,000 times 40 years.  This does not include amounts lost through compound interest and investment potential.)
  2. Real Estate Upside down finances (November 21, 2015 post) 2015/11/21 – For a 700 square foot condo where price is $50 more per square foot than lowest price of largest condo in complex, it can be assumed that the purchaser will be paying $35,000 more than purchaser’s base price of largest condo; if the price per square foot is $100 more per square foot then purchaser will be paying be paying $70,000 more; if the price per square foot is $150 more per square foot then purchaser will be paying $105,000 more and so on. The amount of house and education taxes, real estate fees and mortgage interest will also incrementally increase.  For Lost Dollar Value $50 per square foot including gestimate loss for taxes and real estate fees, interest charges will be used as the example.
  3. Targeted tax relief-Senior singles pay more (December 5, 2015 post) 2015/12/05/senior-singles-pay-more – Since it costs ‘ever’ single and divorced/separated seniors with rent or mortgage about 70% – 75% of married/couple seniors’ income, lost dollars of 70% for $20,000 extra that married/coupled seniors get tax free or $6,000 per year (age 65 to 90) will be added to the list.  Total value of dollars lost will be $150,000 or $6,000 times 25 for years age 65 to 90).
  4. Inheritances  (December 30, 2015 post) 2015/12/30/inheritances– A value of $100,000 lost will be added to the list.  This is probably grossly understated since, first, inheritances are likely higher than $100,000, and second, the rule of 72 growth has not been added since it is not possible to calculate.  (However, using rule of 72, a rate of return of 3.5 per cent would double the original $100,000 in twenty years.) 
  5. Pension Splitting (January 31, 2016 post) lostdollars/2016/01/31– From estimate on income splitting described in research (lop.parl.gc.ca), it has been suggested that income splitting would provide tax relief of $103 for income $30,000 or less and $1,832 for income of $90,000 and over or an average of $794 overall.  If $800 ($794 rounded off) is calculated times 25 years (age 65 to 90), then Lost Dollar Value will equal $20,000 (value revised April 14, 2016).
  6. Reward Programs (March 10, 2016 post) 2016/03/10/reward-programs– A ’lost dollar value’ for singles of $240 fuel rebate for total of 12 months) will be used.   The only ‘lost dollar value’ that will be added to the list is the fuel rebate as this is the only constant available and easily calculated for an entire year.  (Lifetime total, age 25 to 85, $240 times 60 years equals $14,000).
  7. Employment Insurance (April 6, 2016 post) 2016/04/06/employment-insurance– For a person (‘ever’ single and married/coupled persons without children) who has been gainfully employed for forty years and paid an average gestimate of $900.00 of EI per year (which is now at a maximum of $930.60 per year), the lifetime Lost Dollar Value would be $36,000 per person. (Review of data shows that over last couple decades, EI premiums have been as low as approximately of $800.00 per year to a high of over $1,000 per year.)
  8. Canadian Pension Plan death benefits (CPP) (added April 28, 2018) (financial-death benefits) – Estates of singles never married, no kids who die, including tragic deaths, before receiving  (CPP) benefits may forfeit huge dollar value of CPP contributions.  In just ten years of employment with maximum $2,500 annual CPP contributions or $25,000, deceased single person’s estate will only receive a $2,500 death benefit.  Total of $22,500 contribution is forfeited to be used by the survivors of married or coupled households. Imagine what the total might be for forty years of CPP contributions (?$90,000)! 

ADDITIONAL FINANCIAL DISCRIMINATION AGAINST SINGLES NOT INCLUDED IN ABOVE (added April 11, 2016)

  • Extra surcharges for fees like library, recreational, gyms, hotel rooms, etc.
  • Extra surcharges for cruises (can be as high as 150 to 200 %).  Some cruises have now added solo cabins, some as small as 100 square feet, which shows that singles are still seen as less than equal to married/coupled persons.
  • Freebies for families like free children’s meals
  • Gifts – family of four as a single unit will receive more monetary value from gifts given by parents, grandparents, etc. than a single person living in a single unit.  This may not necessarily be a bad thing.  All that is being said is that singles over a lifetime will receive less in monetary value from gifts than families.  The same can be said for giving gifts – singles may spend more in giving obligatory gifts without receiving same monetary value back.

CONCLUSION

While married/coupled people often don’t realize financial benefits they have over singles and families will argue over and over again on how expensive it is to raise children ($250,000 per child), it is also very expensive to be single when financial benefits are taken away or left out by omission for singles.  Canadian singles possibly actually lose the equivalent of raising two children as seen in calculations presented above (and the list is not even complete yet)!  And, in fact, many of the values are probably under reported!

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