CHANGING FACE OF FAMILY WEALTH HAS ENSURED FINANCIAL DISCRIMINATION OF SINGLES

Posted on September 30, 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).

Preface: The basis for this blog post is from the following article which shows that the increased poverty of unattached singles is due to changes over the last two decades on social assistance policies. This blog post expands on this by showing how the definition of family and wealth has changed resulting in unattached singles increasingly becoming unable to achieve the same financial success of families.

“Improving our Knowledge of and Responses to Singles on Ontario Works in Toronto” report by Toronto Employment and Social Services (Singles-Study-) states ‘Over the past two decades, significant changes have taken place in the composition of social assistance caseloads in Canada, with unattached individuals (singles) replacing lone parents as the “new face of social assistance….. Rather than a public policy priority, low income singles more often represent the “forgotten poor…..singles have limited options for support and are often outside or on the margins of policy discussions.’ This same report was cited by the Institute for Research on Public Policy in a segment on BNN Bloomberg re study on ‘Canada’s Forgotten Poor? Putting singles living in deep poverty on the policy radar’ (forgotten-poor).

WEALTH IS NO LONGER OBTAINED FROM WAGES

Unless workers have very high wages, it has become near impossible for singles and poor families to save for emergencies and retirement. Today, the wealthy and wealthy married are achieving their wealth through wealth enablers other than wages such as paid for housing which has become a commodity and is exploding in terms of increasing value, tax free and tax avoidance schemes, a rising stocks and bonds market and benefits given primarily to the married (with and without children) and those with children.

It is impossible for a single person with a $50,000 income to pay for the three major life expenses at the same time, these being purchasing a used vehicle, saving for down payment for a cheap condo and saving for retirement. They have to pick and choose which one or two of these purchases they can afford. They certainly can’t save for many of these if they have student loans to pay.

The above wealth enablers include the top wealthy group of about 30 to 40% of all Canadians most of which was married. This does not even include the top 1% who are able to use other offshore and tax evasion and avoidance schemes to achieve their extreme wealth.

The top 30 to 40 per cent of Canadians who are mostly married and have wealth above $1 million consider themselves to be middle class. Yet they often have multiple properties, recreational cottages, RVs and recreational toys. What does that mean for the rest of Canadians? It means that unattached singles and low income families are exactly that – in the lower financial class.

THE FAMILY LIFE CYCLE HAS BEEN TURNED UPSIDE DOWN IN THE LAST FEW DECADES

The ‘leave it to beaver’ early marriage and one income 50s family allowed mothers to stay at home to raise their children while perhaps earning extra income through baking, sewing, etc.

Now the family life cycle has been altered so that young adults are remaining single longer (can’t afford to date or get married?), possibly marrying in the mid thirties year of age, raising children during parents’ ages late 30s to 60s, and if they have accumulated wealth possibly retiring somewhere between ages 55 and 65.

The financial reality of this changed family cycle is that singles are often forced to struggle financially if they never get married (or are early in life divorced persons). If they have children they will receive Canada Child benefits, but when children are grown they may still face a difficult financial lifestyle and even as seniors.

For the upper middle class married from ages 35 to 60 with double incomes, they have a 20-30 year mortgage after which their houses are paid for, they receive multiple child and marital government benefits and often are able to maximize their RRSP and TFSA accounts times two. Many married couples are able to have one spouse retire early with both retiring early often before the age of 65. (In some cases one spouse retiring early might mean that net income will be lower and will therefore trigger higher Canada Child Benefit payments if they have children under the age of 18).

One has to ask the question, how is this possible? Raising a child is not the biggest expense especially when housing is not included in the child expense equation and parents are receiving Canada Child Benefits. Everyone has to have housing regardless of whether they have children. Housing is the most expensive item of any Canadian during his/her lifetime unless he/she is lucky enough to have inherited a fortune or a house.

The article: “Couple with big age gap forced to contemplate impact of early death” (couple-with-big-age-gap-worry-prosperity-is-fragile) is an example of family life cycle being turned upside down. It states that couple, aged 64 and 55, with grown children have managed to accumulate financial assets of $1,741,500 including $650,000 house, TFSAs, RRSPs, non registered, GICs and cash. At husband’s age 65 couple’s estimated income is $72,000 net income after eligible income splits, tax free TFSA distributions and reduced income tax to average 15 per cent. They spend $17,000 annually on travel and entertainment (repeat $17,000 or almost 25% of their total net salary!).

This couple would have been able to accumulate much of their wealth even while raising children born presumably on or before his age 45 and on or before her age 35 if children are at present at least twenty years of age.

Review of other Andrew Allentuck financial planner articles within the last year reveal that above premise of parents raising child at a later age to be true – 1) parent 1, age 45, raising three children in their teens; 2) parent 1, age 59, raising two children age 12 and 13; 3) parent 1, age 57, and parent 2, age 47, raising two children ages 13 and 17; 4) parent 1, age 47, and parent 2, age 51 raising one child age 14; 5) parent 1, age 46 raising one child age 10; 6) parent, age 56, raising one child age 17; 7) parent 1, age 37, and parent 2, age 40 raising two children ages 4 and 1.

Re wealth differences between the married and singles, an IMF Report highlights ‘marriage gap’ between rich and poor Canadians (marriage-gap-between-rich-and-poor-canadians) – In what it bills as the first-ever analysis of marriage and income done in this country, the Institute of Marriage and Family Canada (Canadian_Marriage_Gap) found that marriage rates among the wealthiest Canadians, or the top 25 per cent of income earners, “remained remarkably stable” over the 30 years that were studied: 1976 to 2011. In contrast, the number of married and common law couples among middle- and low-income earners declined.

In the last year of data included in the study, 2011, 86 per cent of the top quartile (or top 20%) of income earners reported being married or in a common law relationship. Only 12 per cent in the bottom quartile said they were married or living common law. About half of middle-class families include a married or common-law couple, the report found. The study also found that the marriage gap widened after 1976 as marriage rates remained high among high-income earners, but declined among middle- and low-income earners in the 1980s and 1990s. Since then, marriage rates have increased among middle- and low-income earners, but only slightly…..’the “marriage gap” matters because research has found that marriage offers a variety of economic and social benefits.’

It is the opinion of this author that it could also be implied that with the increased social justice and acceptance of gay/lesbian couples (a good thing) this will also contribute to increased wealth of married/coupled families.

HOUSING IS THE BIGGEST LIFETIME EXPENSE

Families and politicians live in tunnel vision bubbles and cannot articulate that children are not the biggest lifetime expense. Housing is the most expensive lifetime expense, especially rental, since it spans an entire adult life. Rent of $1000 per month will total $720,000 over sixty years from age 20 to 80 adult lifespan, $840,000 over seventy years from age 20 to age 90, and $960,000 over eighty years from age 20 to 100 years. Renters are not able to accumulate wealth from housing. Those who are fortunate enough to be able to purchase homes are also accumulating wealth through home purchase.

OAS AND OAS CLAWBACK

Canada provides a very generous social program for seniors through the Old Age Security (OAS) program. Employment history is not a factor in determining eligibility. Any Canadian can receive the OAS pension even if he/she has never worked or is still working.

For persons living in Canada to receive OAS, they must: be 65 years old or older, be a Canadian citizen or a legal resident at the time their OAS pension application is approved, and have resided in Canada for at least 10 years since the age of 18.

For 2020 the maximum monthly OAS benefit per eligible senior is $613.53 ($7362.36 annual). It is indexed to inflation.

OAS Clawback – OAS benefit may be reduced by a clawback if an individual’s net income for the previous calendar year exceeds $79,054 for 2020 (also indexed to inflation). If the net income exceeds this amount, 15% on the excess income must be paid back up to a maximum of the total OAS benefit received. This deduction is like an additional 15% tax on top of the current tax rate.

In the above article ‘Couple with big age’ If husband dies early, financial advisor estimates wife could lose $17,008 gross annual income and potentially pay higher taxes. Partial loss of the reduced income could result from loss of husband’s OAS. Some financial planners gaslight by stating this will be a great financial loss, but fail to acknowledge that senior unattached singles live on one OAS every single day of their senior lives and, above all, this is a very generous pension program which married and financial planners now want to grift by lobbying politicians to give more OAS to wealthy widowers.

OAS CLAWBACK OUTRAGEOUSLY ADVANTAGEOUS TO THE UPPER MIDDLE CLASS MARRIED OR COUPLED SENIORS

Occasionally, there are topics that give one pause resulting in questioning as to the efficacy of the formulation behind the topic of financial equality. The OAS Clawback (proper name is OAS Recovery tax as per Canada Revenue Agency) and the financial discriminatory properties behind the program is one such topic. One way to resolve the questioning is to look at the topic in detail.

OAS is a federal social program designed to provide a very modest pension to low- and middle-income retirees. It is part of the Universal government benefits for seniors (pillar 1) to ensure income security for senior Canadians. In 2020 the annual OAS is $7,362 for a single person and $13,760 for a couple. OAS clawback which began around 2011 does very little to clawback the income of upper middle class persons, particularly married or coupled family units. The clawback of OAS benefits in 2020 starts with a net income per person (and not including TFSA income) of $79,054 (couple $158,108) and completely eliminates OAS with income of $128,137. The repayment calculation is based on the difference between personal income and the threshold amount for the year. The repayment of OAS is 15 percent of that amount. All OAS is clawed back if personal income is over $128,137.

According to Human Resource Development Canada, only about five percent of seniors receive reduced OAS pensions, and only two percent lose the entire amount. This program benefits wealthy couples and widowers the most. There are not many ever single seniors, early divorced in life seniors and single parent seniors who could ever hope to achieve a net income of $79,054; however, for wealthy widowers this may be easier to achieve and they are the ones who complain about clawback.

Many financial advisors will give strategies on how to avoid the clawback while benefiting married or coupled family units the most. This is just another example of financial marital manna benefits and manipulation of assets that within the legal limits of Canada Revenue Agency’s laws allows married or coupled person to increase their wealth (Six Reasons Why Married People Able To Achieve More Power (Wealth) Than Singles – six-reasons). This also is just another example of the upside finances perpetuated in this country by politicians, government and businesses that benefit married or coupled persons the most (regressive-tax-expenditures-financially-discriminate-against-singles-and-poor-families/).

From a financial advisor comes this statement (claw-back): “I also want to put the impact of the claw back into perspective. Although no one likes to give up $6,600 in free money, it’s not like you were going to get to keep it all anyway. As the OAS is taxable, most people in the claw back zone would have paid back over 30% of it in taxes.

Secondly, some clients look at paying claw back as the cost of doing business; while they may not love it, they look at it as a price of their own financial success and as money they really don’t need anyway. Moreover, they might correctly see that in some cases combatting the claw back isn’t worth the effort. For example, although the rest of the article will focus on how dividends are often bad news for retirees trying to avoid the claw back, these same people might also be reluctant to modify their investments to produce other types of investment returns, especially if that means unnecessarily courting more investment risk or triggering a big capital gain in order to rebalance their portfolios”.

From another financial planner (minimizing-clawback): “At the end of the day, more people’s concern over OAS clawback will not be such a big deal simply because there are not a lot of people over the age of 65 making more than $72,809 of income. The people that do may have significant pensions or continue to work and earn an income over the age of 65. There will also be a group of people that trigger significant capital gains from the sale of second property or investments but the good news is they will only lose part or all of their OAS in the one year that the capital gains is realized and reported on the tax return. But if you happen to be one of the few that will get affected, make sure you plan ahead accordingly”.

The OAS clawback (implemented by Conservative party) is just another example of how politicians and government have ensured that senior upper middle class married or coupled family units with incomes between 2020 $79,054 and $158,108 net income and not including TFSA income will benefit more from the OAS government program. These same politicians and government agencies have financially discriminated against ever single seniors, early divorced in life seniors and single parent seniors by ensuring only five percent of seniors will receive reduced OAS pensions, and only two percent lose the entire amount. Note we have specifically stated upper middle class married or coupled family units because wealthy married/coupled and widowed family units have already been excluded from receiving OAS pension by virtue of the $158,108 net income limit.

To add further insult, politicians and government have ensured that the upper middle class will receive benefit upon benefit upon benefit to reduce the effects of the OAS recovery tax program. The Liberal party (now ruling federal party) implemented a 1.5% reduction in income tax for incomes between $45,282 and $90,563. These are upper middle class incomes, not incomes of the poor. Pension splitting is another program that reduces the possibility of OAS clawback. As stated above, past governments have also ensured that marital manna benefits and the ability to manipulate assets have been given primarily to married or coupled family units all within legal limits of financial laws. All of these benefits perpetuate an upside-down financial system where the upper middle class and the wealthy are able to achieve greater wealth than ever single, early divorced in life and single parent seniors. In other words, the OAS Recovery Tax program is a failed program which ensures greater wealth for the upper middle class and greater poverty for singles and the poor.

INDEXING OF SOCIAL PROGRAMS

Most government programs are indexed for inflation, and are generally more advantageous for the married/coupled since indexing for them occurs times two, including paying less taxes with pension-splitting while getting more benefits, (and they still keep wanting more while married and as surviving spouses or widows). Indexing ensures wealth spread between married and singles will continue to widen.

An egregious example of failure of government is Alberta Premier Jason Kenney eliminating indexing this year for social programs for persons living with disabilities.

TAX FREE SAVINGS ACCOUNTS (TFSA) AND PENSION-SPLITTING TAX AVOIDANCE IN RELATION TO OAS AND MARITAL FINANCES IN GENERAL

Re TFSA – If $11,000 TFSA (average of $5,500 over eleven years since inception of TFSA time two per couple) is invested for one year at 3.5% annual interest, it will double in about twenty years to $22,000. If $11,000 is invested every year for 30 years at a 3.5% return, it will be worth $568,893.

Re pension income splitting (P.I.S.) – first, married seniors, who have never had children, using P.I.S. pay less taxes just because they are married even though it costs singles more to live (Market Basket Measure – MBM). Second, married seniors with equal incomes cannot use P.I.S. and, therefore, pay more taxes. Third, poor married seniors benefit less as they have less income to split. Fourth, senior singles and lone parents cannot use P.I.S., ever.

TFSA income from investments will never be taxed and will never affect OAS payment because TFSA income is never declared as income under present CRA rules. Pension splitting allows wealthy married to avoid the possibility of OAS clawbacks.

SURVIVING SPOUSES AND WIDOWS NEED TO STOP IDENTIFYING THEMSELVES AS ‘SINGLE’

When discussing financial matters, surviving spouses and widowed persons need to stop calling themselves ‘single’. According to Canada Revenue Guidelines surviving spouses and widowed persons are classified as ‘widow’, not ‘single’. The ‘single’ classification is for those persons who have never been married or lived common-law. Widows and surviving spouses receive more benefits than singles.

SINGLES ARE NOT CLAIRVOYANT ABOUT WHETHER THEY WILL EVER MARRY

Some singles don’t marry because of severe sexual/physical and other abuse at the hands of parents and/or other public at large, or because of poor parenting skills by their parents. Some singles don’t marry because they feel they don’t have what is required to be good marriage partners and/or parents. Some never marry because it just never happened. In a worldwide obsession with marriage and children, why should singles be faced with the financial injustice that is placed upon them by the same people who are obsessed with everyone needing to be married and/or have children?

Singles are not clairvoyant-they can’t predict whether they will get married, not any more than the married can predict they will be divorced (even though they may receive some inkling of this in premarital counselling sessions). Unattached singles deserve the same social justice and financial equality throughout their lifetimes while single and regardless of age as has been afforded to the married without and without children and single parents.

CONCLUSION

The above article “Improving our Knowledge of and Responses to Singles on Ontario Works in Toronto” outlines how unattached singles being affected by extreme poverty includes all ages, genders and education levels of singles.

It is very apparent from that dramatic changes in the life cycle of married/coupled persons and altered family life cycles over the last several decades requires a dramatic change in social programs for and inclusion of unattached singles in the family definition.

If social Conservative Erin O’toole’s suggested family platforms can provide thousands of dollars in Child Care, CCB, and refundable tax credits and (Liberals in their throne speech) then politicians can for damn sure give equal housing benefits to unattached singles.

Band-aid solutions by politicians, think-tanks, and opinion writers will not work. Canada’s financial system is broken and needs to be reworked in its entirety as occurred in the Carter Commission. But poor unattached singles cannot wait for the many years it took for commission to be completed. They need solutions now!

IF HUMAN RIGHTS SAY THEY CAN’T HELP IN FINANCIAL DISCRIMINATION OF SINGLES, WHO CAN?

Posted on June 25, 2019 by ffswpadmin

IF HUMAN RIGHTS SAY THEY CAN’T HELP IN FINANCIAL DISCRIMINATION OF SINGLES, WHO CAN?

While it is wonderful that there is some recognition of the changing face of family and the grave financial struggles singles face, actions speak louder than words.

A single person 2019 $50,000 Alberta annual income ($25/hr. and 2,000 worked hours) with $11,000 tax, CPP (Canada Pension Plan) and EI (Employment Insurance) deductions results in only a bare bones net living wage income of $39,000 ($19.50/hr.). It is impossible to maximize $9,000 RRSP (Registered Retirement Savings Plan – 18% of earned income) and $6,000 annual TFSA (Tax Free Savings Account) contributions (35% of $39,000 with tax reductions for RRSP) even though many politicians, families, and financially illiterate believe $50,000 is a good income for unattached individuals and single parents. As seniors they will likely be living only on CPP and OAS (Old Age Security) benefits and maybe without GIS (Guaranteed Income Supplement). There is no median income family that spends 35% of their income on savings and 10% for emergencies leaving only 55% for daily living expenses.

During child rearing years single parents will receive CCB (Canada Child Benefits), but after child rearing years they are ‘back to square one’ where it will likely be impossible to save for retirement on $50,000.

Example of approximate average cost of living for a single person household (easily obtained from Living Wage research) excluding child expenses: Rent for bachelor apartment (including utilities, 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 $300 (10% of income). 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, license/registration and membership fees, vacations, entertainment, computer purchases and expenses, gifts, condo fees, professional association and union fees, etc. Note: there is no ability for retirement saving beyond CPP contributions. The 2017 living wage for Alberta is about $18 per hour based on 35 hour work week or 1,820 hrs per annum. Unattached never married no children single person households receive very little income from government transfers (municipal, provincial and federal).

Right wing Stephen Harper introduced tax free TFSA investments benefiting wealthy the most (tax-free-savings-account-tfsa-designed-to-make-married-and-wealthy-even-richer.

In the left wing Liberal financial world, tax free CCB benefit clawback for $30,450 to $65,976 net income portion and two children is 13.5%, but only 5.7% for net income portion over $65,976. This is just more upside down politics where clawback percentage is greater for the $30,450 to $65,976 income portion. Shouldn’t it be the other way around where the clawback for the wealthy is 13.5%? Prime Minister Justin Trudeau is so proud that nine out of ten families are receiving CCB benefits including wealthy families with never married no children single persons completely invisible in the family definition. Why are families with $250,000 incomes receiving CCB benefits?

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 (“CCB is a win for most families” article – child-benefit-is-a-win).

Using turbotax calculator for Alberta family with children and $250,000 gross income or approx. $160,000 net income ($80/hr.) they can max out 2019 $45,000 RRSP and $12,000 TFSA for couples. 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. (This example may not include other possible deductions).

For every dollar that is given in benefits and tax reduction for the wealthy and the married is equal to dollars lost (lost-dollar-value-list) to singles.

CONCLUSION

Some of these financial discrimination issues for singles have been submitted to the Canadian Human Rights Commission. They said they couldn’t help. If they can’t help, who can and who will?

To counterbalance the net income, tax avoidance and tax free socialism for the rich and the married mentioned many times in the above, it is crucial that lifetime federal and provincial income tax be exclusively and completely eliminated for singles and single parents with incomes under $50,000 so they also can save for their retirements. This should absolutely not be tied into refundable 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).

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

Posted on May 31, 2019 by ffswpadmin

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:

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.
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).
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.)

AFFORDABLE HOUSING FOR VULNERABLE POPULATIONS, SINGLES AND THE POOR

Posted on December 6, 2016 by ffswpadmin

AFFORDABLE HOUSING FOR VULNERABLE POPULATIONS, 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.)

The following discussion (about 15 pages in length) on affordable housing was submitted in response to a request for input to a national survey on affordable housing. The link for ‘Let’s Talk Housing’ survey is included at the end of this post.

It appears that some of points from this discussion were included in the final results of the survey such as

Including singles in definition of family by using specific wording of “individuals and families” not just “families”
Including affordable housing as a human rights issue
Including quality of life such as laundry facilities.

Issues that appear to not having been addressed are single seniors having own bedroom and bathroom that doesn’t cost more for them than for married or coupled seniors.

There still seems to be a mentality for seniors to age in place even with expensive houses that they can’t afford (tax credits on home renovations and assistance in paying house taxes). Those with considerable net worth and assets should be excluded from housing subsidies of any kind.

NATIONAL AFFORDABLE HOUSING STRATEGY

TO: National Housing Strategy Team, Canadian Mortgage and Housing Corp., 700 Montreal Road, Ottawa, ON K1A 0P7

To Whom It May Concern:

First of all, thank you for the opportunity to respond to your housing strategy. In this response, two categories that have been identified will be addressed – Affordable Housing and Vulnerable populations.

CATEGORY – AFFORDABLE HOUSING

Blog “financial fairness for singles.ca” talks about affordable housing. One of the reasons for unaffordable housing is what author calls UPSIDE DOWN HOUSING. Excerpt from blog is as follows:

UPSIDE DOWN HOUSING

Why does it seem more difficult for individuals/singles and low income persons to purchase affordable housing? For possible reasons why, consider the following scenarios.

One example, condos presently being developed in Calgary by a developer in one housing complex includes 1 bed, 1 bath, 1 patio micro-condos of 552 sq. ft. with starting price of $299,900. Two patio, 2 bed, 2 full bath, 2 story 1232 sq. ft. condos were already sold out so price not available. Then there are 2 patio, 3 bed, 2.5 bath, 2 and 3 story 1830 sq. ft. condos priced from $649,900 to $749,900. Apparently, ultra-deluxe model has master bedroom suite covering entire third 600 sq. ft. floor. The third floor bedroom is bigger than total square footage of $299,900 condo. When price per square foot is calculated, micro-condo is selling for $543 per sq. ft. while three bed condos are selling from $355 to $409 per sq. ft.

So who is more likely to buy micro-condos? Possibly low income couples, single parent with one child, or environmentally conscious, and probably an individual/single person. Who gets to pay $150 to $200 more per square foot for two-thirds less space? Ripple effects are owners of micro-condos have to proportionately pay more house taxes, education taxes, mortgage interest and real estate fees on less house and less take home pay for biggest lifetime expense. When it is sold, will seller recoup buying price?

While singles are living in their small spaces (average size of new studio, one bed and one bed/den new condo combined being built in Toronto is 697 sq. feet), majority of Canadian married/coupled people families are living in average 1950 sq. foot houses (2010) with large gourmet kitchens, multiple bathrooms, bedrooms for each child and guests, basement, garage, yard, and nice patio with barbecue, etc.

To further magnify the issue, lottery in major northern Alberta city has first grand lottery prize of $2,092,000 for 6,490 sq. ft. house ($322 per sq. ft.), second grand prize of $1,636,000 for 5,103 sq. ft. house ($321 per sq. ft.), and third grand prize of $1,558,000 for 5,097 sq. ft. house ($306 per sq. ft.). First house has elevator, games/theatre area, kid’s lounge, gym, and music room. Second house has hockey arena with bleacher seating, lounge and bar. Third house has spa, gym, yoga studio, juice bar and media room. The wealthy get all the extras and pay only $306 per square foot. This is upside down housing. Need anything more be said about the wealthy? They usually get more while paying less and acquiring choicest spots. (Another example is penthouse suites that sell for proportionately less dollars per square foot than a small condo unit on lower floors of a building).

Average square footage of Canadian house is 1950 sq. ft. (2010) so how can a developer socially, morally and ethically justify charging $150 to $200 more per square foot for two-thirds less space? “CREB now”, Aug. 28 to Sept. 3, 2015, page A5, talks about Calgary developer selling 440 sq. ft. condos in north inner city tower for $149,000 ($339 per sq. ft.) in 2012 and 440 sq. ft. condos in south inner city tower for $219,000 ($498 per sq. ft.) in 2015. Two and three hundred sq. ft. condos are now being sold in Vancouver and Toronto for around $250,000 ($1250 and $833 per sq. ft. respectively). In many cases salaries for low income and singles has not risen to same level, nor has Canadian housing prices for the middle class and rich ($400,000 and up).

How is any of this different than loan-sharking or pay day loans where targeting of the most vulnerable occurs? Does no one see a pattern here where the wealthy pay $300 to $400 per square foot, but singles and poor families are forced to live in smaller spaces while paying more per square foot for them?

Further financial unfairness occurs when individual/single homeowners without children are forced to pay education taxes, but parents pay only fixed rate based on value of their home regardless of number of children. For ‘nineteen kids and counting’ it is possible parents are only paying a few cents a day for their children’s education. Some married/partnered seniors with kids are looking to have education tax payments eliminated from their house taxes. For families with children, logic implies parents should pay education tax throughout their entire lifetimes, or individuals/singles without kids should not have to pay education tax ever. However, families don’t seem to be able to apply financial logic of their own finances equally to the financial realities of their single children. And, many families do not want to pay school fees.

There are many more examples of financial unfairness, but just the above few show how financial world for low-income families and individuals/singles has been completely flipped upside down and topsy-turvy. Have governments, society, and our publicly and privately funded education systems failed us so miserably and family/corporate greed taken over with critical thinking, social/ethical responsible thinking sinking to all-time lows? Since when is it okay under present financial system for families to accumulate wealth and huge inheritances while their low income and single children are not able to support themselves on a day to day basis?

Young individuals/singles not yet married are facing huge financial hurdles because of low incomes, less full time jobs, enormous education debt, and out of control housing costs. Families (parents), governments, society, corporations, businesses to date have failed to provide support and responsibility that is needed to ensure all Canadian citizens are able to financially take care of themselves without financial parental aid, inheritances of parents and without bias of gender, race or marital status.

In this so called civilized, enlightened country of ours, it appears that citizens of value are only upper middle-income families and the wealthy while individuals/singles with and without children are being annihilated from financial, political, and everyday living scenes (MADE INVISIBLE). If families have such high family values, shouldn’t family values and moral social values take precedence instead of being trumped by almighty dollar greed and philosophy of charging what the market can bear and more?

Low income families, individuals/singles and young adults not yet married who can apply simple math and critical thinking skills are in financial despair and angst knowing that they, as the most vulnerable citizens of this country, have been targeted and pawned to pay more for housing than middle class families and the wealthy. It is the duty of politicians elected by the people, for the people to represent all Canadian citizens, not just vote getting middle class families.

OUTSIDE THE BOX SOLUTIONS FOR PRICING OF AFFORDABLE HOUSING

Solution 1 – for a housing complex as identified in the above outrageous pricing example, prices should be set where the base price of the unit with the smallest square footage cannot be more than the base price of the unit with largest square footage within the complex. Any changes and upgrades by the buyer would be added to the base price. (In the above example the base price of the 552 square foot condo could only be $355 per square foot to match the cheapest price of the biggest per square foot unit in the complex). Should there be laws and fines applied for these outrageous prices?

Solution 2 – Charges for house taxes, education taxes, and real estate fees should be balanced between square footage and price of the housing unit? Where housing prices follow a fair pricing formula as shown in Solution 1, this could provide financial fairness where fees are based on largest unit and become proportionately less on smaller units.

Solution 3– charge a fee such as a carbon tax fee for units greater than a certain number of square feet. For example, allow a maximum size of 2500 square ft. for a housing unit (assumption is that there is no need for excessive amounts of square footage in housing). For anything greater than 2500 square feet, charge an extra fee to the buyer with an incremental increase in the fee for every additional 500 square feet of space. (The wealthy have been paying less and getting more square footage while using non-renewable resources plus water at an alarming rate, i.e. 5000 square foot log cabin using twelve logging trucks filled with harvested logs and a showhome that has seventeen sinks). The monies collected from these fees could be used to build more affordable housing.

As stated in a recent real estate article, Watermark, a deluxe complex in Calgary is selling an ‘inspired’ (so stated in article) 8,644 sq. ft. estate home and its guest house for $3.45 million or $399 per square foot which is less per square feet than 600 square foot condo mentioned above. Article goes on to say that beyond homes, Watermark garners interest with both natural and manmade beauty. It has 17 cascading ponds and more than five kilometers of interconnected walking and bike trails. Then there’s the central plaza with its 1,000 sq. ft. pavilion, kitchen, barbecues, a sports field and NBA-sized basketball court. One family’s daughter is looking forward to booking the plaza and using the outdoor kitchen for her birthday party. The family goes on to state that space between homes and low density was also very important so they weren’t looking into someone’s back yard. This same complex has a show home with 17 sinks.

Another real estate article talks about another family with three children moving from 1900 sq. ft. house to a 2,837 sq. ft. house with price starting from $900,000s. They are moving because they need more room for the kids as they grow. Their new house will provide 567 sq. ft. per person at a starting price of approximately $317 per sq. ft. Yet again other articles state that owners are happy they don’t have condos in their backyard (NIMBYism) and their children can experience nature from their own bedrooms.

Further advice usually given by married people states singles can live with someone else if they can’t afford housing when they are already living in studio, one bedroom apartments, and basement suites. Senior singles who have lived productive lives while contributing to their country want and deserve their own privacy and bathroom. Many senior assisted living dwellings have in recent years built more spaces for singles who with one income pay more for that space than married/coupled persons. Just how long should shared arrangements go on for (entire lives?) instead of correcting underlying financial issues?

Following examples show dignity and respect for singles (and low income families). Attainable Housing http://www.attainyourhome.com/, Calgary, allows maximum household income of $90,000 for single and dual/parent families with dependent children living in the home and maximum household income of $80,000 for singles and couples without dependent children living in the home. Living Wage for Guelph and Wellington livingwagecanada allows singles dignity of one bedroom apartment and a living wage income that is 44% of a family of 4 income and 62% of a family of two (parent and child).

While singles are living in their small spaces (average size of new studio, one bed and one bed/den new condo combined being built in Toronto is 697 sq. feet), majority of Canadian married/coupled people and families are living in average 1950 sq. foot houses (2010) with large gourmet kitchens, multiple bathrooms, bedrooms for each child and guests, basement, garage, yard, and nice patio with barbecue, etc.

Above mentioned blog has also tried to attach lost dollars that singles face directly every date in relation to married and coupled family units with and without children. The following lost dollar value is in relationship to housing.

LOST DOLLARS VALUE LIST

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.

Our Lost Dollar Value List in blog (lost-dollar-value) – when lost dollar value for real estate is added to the list, $50 was used as the example not including gestimate loss for taxes and real estate fees, interest charges based on $50.00 per sq. ft.

APPROPRIATE HOUSING DEFINITION

Singles are often told they can always go ‘live with someone’ if they have problems with affordable housing. The CMHC should be aware of the following definition of appropriate housing. Housing dignity and respect as well as quality of life according to this definition specifies that singles deserve a bedroom of their own. (One bedroom actually meaning one bedroom, not just a murphy bed in a 200 square foot condo, shows dignity and respect for singles). It is the belief of this author that appropriate housing for a senior single means senior singles deserve a bedroom and a bathroom of their own. After working for forty years for their country without the marital manna benefits given to married or coupled family units, senior singles deserve at least this much.

Appropriate Housing definition is stated as follows – Under the Social Housing Accommodation Regulation (alberta page 11), such housing is considered overcrowded if more than two people must share a bedroom, with at least one individual in each of the other bedrooms, and if an individual over 18 “must share a bedroom with another member of the household,” or someone over the age of five has to share a bedroom with “an individual of the opposite sex.” (Spouses or partners sharing a bedroom don’t count)…..”Affordable housing is intended to be appropriate housing-appropriate to needs of families. If children age in place or additional children are welcomed into a family, they can transfer within the system…subject to availability.”

Blog “financialfairnessforsingles.ca”also addresses psychological impact where appropriate. The following discusses the psychological impact for housing.

PSYCHOLOGICAL IMPACT

There seems to be very little understanding of the psychological impact that decision makers and policy makers have on singles regarding housing.

Many families live in houses where their young children have separate bedrooms, and likewise, there is a trend towards ‘man caves’ and ‘she sheds’ so family members can have ‘alone’ time, but when children become single adults, singles are consistently told that they can live with someone if they have financial problems with housing while paying more.

And, of course, singles never have claustrophobia, so it is okay to stick them in small spaces for which they have to pay more. And singles never have problems with noise, so it is okay for them to live in small units in less desirable areas close to airports and railway tracks, etc. (As one single person moving from one unit to another stated in a real estate article “I was very impressed with the pricing and the fact that they’re doing concrete floors and walls “. Concrete is said to restrict noise. “I work on Saturday mornings and a lot of people like to stay up a little later on Friday and Saturday nights”. With thinner walls, he adds, it is easier to hear “people in the hallways coming and going. It is not the end of the end of the world, by any means, but I am looking forward to something quieter above and below”. But for this person, the decision was less about sound and more about getting something larger, with better specifications and closer to work-moving from 615 sq. ft. two bedroom condo to 715 sq. ft. two bedroom condo. “The bedrooms are a little bit bigger with an ensuite. I really liked that and I liked the fact that it has a washer and dryer so I don’t have to go to the laundromat.”

Singles deserve same standard of living as married/coupled persons, i.e. having washer and dryer in their own home instead of having to go down a dark hall or to basement in complex to do laundry or paying outrageous prices per load at a laundromat.

When reading or listening to articles on housing for families, families will always talk about how important their housing is for them in regards to creating memories for their children, entertaining and maintaining close ties to friends and families, but apparently adult singles don’t have friends and families or dreams, so it is okay for them to live in micro condos, some as small as 200 square feet, where it is pretty much impossible to entertain or have friends and families stay with them except maybe by having a bunk bed chained from the ceiling.

SOLUTION

Singles and low income persons need to become more aware of financial unfairness by taking pricing down to the lowest common denominator, i.e. price per square foot and speak out about the financial atrocities being directed towards them. They need to start questioning why they are being targeted to pay more while getting less. (While it is recognized that it is expensive to raise children, adult to adult it is also unfair to make one segment of the population like singles and the disadvantaged pay more than another segment).

By your own definition in ‘Let’s Talk Housing”, you state -” Zoning by-laws that encourage affordable, mixed-income and mixed-tenure communities are one way to ensure the inclusion of all Canadians in a variety of social, economic and cultural opportunities”. So how about putting ‘money where your mouth is’ and eliminating financial housing discrimination for singles and the poor that is upside-down and by truly making the wealthy pay their fair share?

CATEGORY- VULNERABLE POPULATIONS

SINGLES/INDIVIDUALS ARE RARELY INCLUDED IN FINANCIAL DISCUSSIONS AND FORMULAS

By your own definition in ‘Let’s Talk Housing”, you state vulnerable populations include seniors, persons with disabilities, victims of domestic violence, newcomers, homeless, lone parent families, indigenous households, youth, veterans.

Why are singles never included today in financial discussions and formulas? Families are only mentioned. What this means is that singles are discriminated against by virtue of exclusion and invisibility. As stated by your definition in sentence above, singles are not included except if they fall into categories of disabilities, homeless, or youth. Into which of these populations do singles between the ages of 25 and 65 fall? Your own definition of vulnerable populations does not include them.

SINGLES ARE INAPPROPRIATELY CLASSIFIED

Singles are inappropriately classified when the ‘catch-all’ word ‘singles’ is used to include single parents, widowers, ever singles (never married, no kids), early in life divorced and late in life divorced singles all in one word. Canada Revenue Agency has clear definitions for singles and widowed persons. Yet, financial planners, government agencies, businesses often consider widowed people to be singles when they are not. Single parents do get some government transfer benefits, which is as it should be. Widowed persons are given benefits, while ever singes are rarely given any benefits except in abject poverty. Widowed persons are more likely to own their own homes and have more net worth than ever singles. Early in life divorced persons are less likely to be able to accumulate net worth and wealth than late in life divorced persons.

Blog article “False assumptions – ‘Four Ways Senior Singles Lose Out’ – December 2, 2015” is a perfect example of how a financial analyst has inappropriately talked about singles in his article when he is actually talking about widowed persons. Widowed persons are often perceived to have more social value simply because they were married and have produced children in comparison never married singles and early in life divorced singles without and without children. This discrimination often leads to never married and early divorced in life singles being left out of financial decisions because they have been made to be invisible.

FINANCIAL ILLITERACY AND IRRESPONSIBLE CONCLUSIONS OF DECISION MAKERS IN HOUSING SOLUTION

Who Really Owns Homes

In your information, you say 69% of Canadians own their own homes, but what you don’t say is the majority of home ownership is by married or coupled family units. The sad reality is that singles are less likely to own their own homes because they simply can’t afford it. You say that seniors are a part of the vulnerable population. In reality, senior singles (not widowed persons and married or coupled persons) are more likely to be part of the vulnerable population.

According to Statistics Canada 2011 articles “Living Arrangements of Seniors” and “Homeownership and Shelter Costs in Canada” (12.statcan) and (12.statcan.gc) ‘approximately 56.4 per cent of the senior population (5 million total seniors in 2011) live as part of a couple and about 24.6 per cent of the senior population live alone (excludes those living with someone else, in senior citizen facilities and collective housing).

Approximately 69 per cent of Canadians own their own home. About four out of five (82.4%) married/coupled people own their own home, while less than half (48.5%) of non-family households (singles) own their dwellings. Just over half (55.6%) of lone-parent households own their dwelling. “ (It stands to reason that more senior married/coupled and widowed persons will own their own homes, while senior singles–‘ever’ single and early divorced–are more likely to have to rent placing them in greater income inequality and a lower standard of living and quality of life). Regardless of housing tenure, the proportion of non-family households and lone-parent households that paid 30% or more of total income towards shelter costs was about twice the proportion of the couple-family households’.

We are going to repeat this statement again: Regardless of housing tenure, the proportion of non-family households and lone-parent households that paid 30% or more of total income towards shelter costs was about twice the proportion of the couple-family households’. This very statement reinforces the fact that singles need to be included in the definition of vulnerable populations.

Singles are constantly told to ‘go live with someone’ when they have difficulties paying for housing; meanwhile married/coupled and widowed persons may be living in their big houses (enjoying the same lifestyle they had before pre-retirement) and seeking help with paying their taxes while refusing to move to a less expensive dwelling when they have financial difficulties.

Seniors who own their homes want to remain in their homes as long as possible versus renters

You state in your information that seniors want to remain in their homes as long as possible. You also state renters, on the other hand, can benefit from lower monthly costs and more flexibility when they want to move.

Several comments – there are many seniors who have huge net worth in their homes, can’t afford to live in them, and yet want to remain in them. They have such a sense of entitlement that they are seeking help with paying house taxes, and now politicians are looking to give them financial help with upgrading their homes. The above statements show no regard for the psychological impact of renting for singles and the poor. Just how long do you think renters should stay in one place – ten, twenty, thirty years- for example, as seniors without renovations and upgrades taking place in their rental units? The likely answer that you and everyone else will give to this is that they can always move. Moving in psychological impact is stressful, plus moving is expensive (your statement regarding ‘flexibility to move for renters’ is a negative, not a positive).

Families don’t take their own advice which they dish out to singles. Senior couples or widowed don’t want to give up their big houses, but ask for reduced house taxes and senior education property tax assistance programs (Calgary Herald, “Not Now” letter to the editor, August 26, 2015). If you can’t pay your house taxes, how about moving to smaller place or go live with someone (tit for tat)? If families with kids don’t pay education property taxes as seniors, then homeowners who have never had kids should not have to pay education taxes throughout their entire lives.

Financial analysts and decision makers have in their end points created such a sense of entitlement and greed that many believe home equity should not be treated as an asset and, even more ludicrous, as a retirement asset.

Blog post ‘Continued Financial Illiteracy and Creation of Financial Silos Benefitting Married/Coupled Persons Equals Financial Discrimination of Senior Singles-Part 2 of 2’ (part-2-of-2) is author’s response to one such article: February, 2016 the Broadbent Institute in Canada and Richard Shillington of Tristat Resources published the report: “An Analysis of the Economic Circumstances of Canadian Seniors” (broadbentinstitute)

Quote from report : ‘ …..Many of those who argue that there is no looming pension crisis have included home equity as a liquid asset. This analysis has not treated home equity as a retirement asset because the replacement rate analysis has as its objective an income that allows one to enjoy a lifestyle comparable to that which existed pre-retirement. We do not include home equity here because we accept that the pre-retirement lifestyle for many middle- and moderate-income Canadians include continued homeownership”, (Page 19)’.

(blog author’s response to this statement) ‘It is ludicrous that this report does not treat home equity as a retirement asset. Those who have to rent are at a much greater financial disadvantage than those who own their own home’.

Singles with mortgage or rent face serious financial obstacles regardless of what age they are. Young are facing outrageous housing and mortgage costs. Senior singles who have to rent face serious quality of life issues when their rent is beyond what they can afford. Also, financial analysts state that most singles cannot have a mortgage and save at the same time, they only can do one or the other.

What some politicians’ and other responses have been so far

Blog author has been blogging about financial discrimination of singles for almost a year and has been attempting to contact government and politicians regarding this issue. Here are a couple of absurd responses received so far (none have been positive).

One politician said that if singles are having problems with affordable housing, they can seek assistance. Community Housing in Alberta is a subsidized rental program, but to qualify assets and belongings cannot exceed $7,000. Really, $7,000? (Assets in pension funds, registered retirement savings plans, or registered retirement income funds are not included in calculation of assets. So this means, subsidized housing can be given to those with considerable assets). Another answer stated that maybe charitable and social agencies need to include singles in assistance that is already provided to low income persons and single parent families. Really? This is another slap in face answer that does nothing to solve the affordability housing problem for singles.

Singles continually get told by married or coupled persons that singles can go live with someone if they have problems with being able to afford housing. At a session on affordable and inclusive housing, blog author was told as much by one gentleman from around Springbank (one of most expensive areas to live in Canada) who was so proud that he was able to winter every year in Arizona.

When reading or listening to articles on housing for families, families will always talk about how important their housing is for them in regards to entertaining and maintaining close ties to friends and families. They talk about about how their ‘hearts are eternally and inexplicably changed’ when bearing their children, but same hearts appear to become ‘hearts of stone’ when these same children become adult singles, low income or no income persons and families.

It often appears that desired results have been achieved for what married/coupled persons and families think are appropriate for singles. Singles can now sleep in spaces that are two hundred square feet in size. It seems these same people no longer consider singles to be their children or part of the family. Instead, the state of business has overtaken the value of family to the point of unadulterated greed.

Singles deserve better in affordable housing solutions. When they talk to government, decision makers and families about lack of affordable housing, they are met with anger, shunning and deaf ears. They are given the response that it is ‘what the market can bear’.

Every adult with marital status of being single deserves a living wage and a dignified place to live that is equal to adults in families. Every adult with marital status of being single deserves to be included in financial formulas that are equal in benefits to adults in families. Every adult with marital status of being single children of families deserves to treated with same financial dignity and respect as married/coupled children in same family.

Single employables (singles and single parents) deserve the same financial dignity and respect as married/coupled persons with and without children. Singles and single parents (white, aboriginal and of immigrant status) deserve to be included in financial formulas at the same level as married or coupled persons with and without children.

Financial discrimination of singles is accepted in mainstream and is, indeed, celebrated. Article like “It Pays To Be Married” (marrying-for-money-pays-off) implies married/coupled persons and families are more financially responsible. From “Ten Events in Personal Financial Decathlon Success” (financialpost), the Family Status step says: ‘From a financial perspective, best scenario is a marriage for life. It provide stability for planning, full opportunities for tax planning and income splitting and ideally for sharing responsibilities that can enhance each other’s goals and careers. One or two divorces can cause significant financial damage. Being single also minimizes some of the tax and pension advantages that couples benefit from’. How nice!

CONCLUSION

It is morally, ethically and socially reprehensible and irresponsible when government, businesses and families don’t recognize singles and continue to violate one of the basic principles of Maslow’s Hierarchy of Need, that is shelter.
It is morally, ethically and socially reprehensible and irresponsible when government, businesses and families don’t recognize singles and continue to violate what has been deemed by international organizations to be a violation of the Human Rights of all Canadian Citizens, that is housing.

(From Wikipedia) “The right to housing is recognised in a number of international human rights instruments. Article 25 of the Universal Declaration of Human Rights recognises the right to housing as part of the right to an adequate standard of living. It states that:

“

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

”

Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) also guarantees the right to housing as part of the right to an adequate standard of living.

In international human rights law the right to housing is regarded as a freestanding right. This was clarified in the 1991 General Comment no 4 on Adequate Housing by the UN Committee on Economic, Social and Cultural Rights. The general comment provides an authoritative interpretation of the right to housing in legal terms under international law.”

OTHER CONSIDERATIONS

It is morally, ethically and socially reprehensible and irresponsible when government, businesses and families continue to be uneducated (illiterate)and completely unaware of what it costs singles to live in comparison to families in relation to equivalence scales.
It is morally, ethically and socially reprehensible and irresponsible when government, businesses and families discriminate based on marital status. Discrimination based on marital status is a also a violation of human and civil rights.
It is morally, ethically and socially reprehensible and irresponsible when government, businesses and families continue to exclude singles from financial formulas and housing solutions. Singles need to be included in all financial formulas.
Equivalence scales (equivalence-scales-in-relation-to-cost-of-living) – if there anything that is can be so eye-opening in describing how financially disadvantaged singles are in comparison to families for cost of living, it is equivalence scales. Member of National Housing Survey need to educate themselves in this regard.
Real estate fees have reached an outrageous level of unaffordability. These fees, in addition to outrageous housing prices, need to be addressed.

In present political system, singles are losing financial ground. Words ‘individuals’ or ‘singles’ rarely come to the financial lips of politicians, families or media. What is needed is to bring financial issues of singles to same financial table as families and to make positive changes for both parties. Singles who have worked for forty years, never used EI and helped to support families through wedding and baby gifts, education taxes and other taxes so that families can have maternity and parental benefits, child benefits, widow and survivor benefits, etc. deserve same financial respect as families. Singles never get any thanks and are never recognized for their contributions. The only benefits singles ever receive is if they are in abject poverty. Singles are not asking for more financial benefits than families, but equivalency to family benefits as applicable as shown in equivalence scales. They deserve this as citizens of this country.

Quite frankly, with all the rhetoric, surveys, solutions and bafflegab, this author is very pessimistic and believes CMHC and others involved in this project are going to fail, and will fail miserably. Unaffordable housing will not be resolved UNLESS THE MINIMUM WAGE IS RAISED TO A LIVING WAGE AND TO A LIVING WAGE THAT IS INDEXED TO INFLATION. Success will only be achieved if innovative solutions AND a living wage occur simultaneously. Everything that occurred in the last decade by government, businesses, and families in regards to financial solutions has benefitted only the upper middle class families, not singles and the poor. (Blog post on CPP enhancements, August 31, 2016 further supports how lack of minimum wage and schizophrenic programs further discriminate against singles and the poor-CPP a federal program while minimum wage is a provincial program).

List of some of the blog posts regarding housing and financial discrimination of singles and the poor:

False assumptions – ‘Four Ways Senior Singles Lose Out’ (false-assumptions)- December 2, 2015 -describes how one financial analyst shows singles lose out on married or coupled family unit tax advantages, lose out on tax and pension systems tilted to benefit couples, lose out on benefits, face higher tax bill, and face OAS recovery tax. The sad fact is that this financial analyst was talking about widowed persons, not ever singles.
Senior Singles pay more – Parts 1 to 4 – December 5 (senior-singles), Dec. 9 (part-2), Dec. 12 (part-3), and Dec. 22, 2015 (part-4), – show the many ways that senior singles pay more and get less over their married or coupled family unit counterparts.
To rent or own affordable housing – that is the question January 10, 2016 (to-rent-or-own-affordable-housing)
Continued Financial illiteracy of financial gurus equals financial discrimination of singles – Part 2 February 28, 2016 (financial-illiteracy) – blog author’s perspective on yet another financial analyst (Broadbent Institute) providing incomplete facts about what it costs singles to live, inappropriate classification of singles, and not including home equity as a retirement asset.
Incomplete reporting of news and media articles promote financial inequality of singles to married/coupled persons March 24, 2016 (financial-inequality-of-singles-to-marriedcoupled-persons) – inability to say the word ‘single’ or ‘individual’ promotes financial discrimination of singles.
Lost dollar value list to date – April 10, 2016 lost-dollar-value-list) (attached table – please see article for full description of items)
Singles deserve affordable housing and financial fairness for singles April 13, 2016 (singles-deserve-affordable-housing)– talks about a San Francisco single person who created a private sleeping space in the living room of an apartment he shares with other roommates (one bedroom apartments rent for $3,670 a month). He sleeps in a wooden box (he calls it a ‘pod’) that is eight feet long, four and a half feet tall and probably about five or six feet wide)
Rental or affordable housing – misconceptions about psychological impact on singles April 20, 2016 (affordable)
Real financial lives of singles April 24, 2016 (real-financial-lives-of-singles-and-financial-discrimination-of-singles) – shows financial profiles of three married or coupled family units and three ‘singles’ from various backgrounds
Homelessness in Canada bigger problem for singles and poor single parent families May 23, 2016 (homelessness-in-canada-bigger-problem) – study on single employables comprised of singles and single parents and how they are having a very difficult time surviving on low wages and lack of affordable housing
Affordable housing not party of Conservative Party definition July 17, 2016 (affordable-housing-not-part-of-conservative-party-definition) – appropriate housing definition and how Conservative party after 40 year reign in Alberta contributed very little to affordable housing during the oil boom)
Improper definition of single status promotes financial discrimination August 7, 2016 (improper-definition-of-single-status-promotes-financial-discrimination)
Equivalence scales August 17, 2016 (equivalence-scales-in-relation-to-cost-of-living see article for further description of scales and application in Canada)
History of family tax credits over decades are financially discriminating to singles Part 2 of 2 August 23, 2016 (history-of-family-tax-credits-over-decades table – see article for full description)

The above table shows benefits available to a married or coupled family units with children from time they are able to use maternal and parental benefits to time of death of one spouse (yellow, blue and green fill in). Single parents only have benefits related to their children (orange fill in). Married or coupled family units without children have all the benefits related to having a spouse or partner (navy fill in). Ever singles and early divorced singles have none of the benefits available to married or coupled family units (fill in is blank because they have none of the benefits of spouse #2. In addition, they are often are unable to max out RRSP and TFSA contributions). (While late in life divorced singles have none of the benefits for spouse #2, they may have been able to accumulate more net worth and assets while they had a spouse or partner).

15. Boutique tax credits pushing singles into poverty Part 1 of 2 June 23, 2016 (boutique-tax-credits) and Part 2 of 2 July 3, 2016 (part-2-of-2) – shows how family tax credits given to families with high net worth (brought in by Liberal party this year) are financially discriminatory to singles and are actually pushing them into poverty

16. Six Reasons Why Married/Coupled Persons are Able to Achieve More Financial Power (Wealth) than Singles (six-reasons – see article for further description – for marital manna benefits an example of a gourmet ice cream cone where married/coupled persons get additions of chocolate sauce and sprinkles, but singles only get the ice cream and cone)

“LETS TALK HOUSING” survey link (letstalkhousing)

(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

Posted on September 25, 2016 by ffswpadmin

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%.

ANALYSIS

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?

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.

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.)

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

Posted on September 18, 2016 by ffswpadmin

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

Feb. 11/16 (company) and Mar. 7/16 (money) and Mar. 10/ 16 (reward) and April 27/16 (fee) and July 21/16 (2016/07/21)

‘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.)

CANADA PENSION PLAN ENHANCEMENTS WILL DO NOTHING TO ELIMINATE FINANCIAL DISCRIMINATION OF SINGLES AND THE POOR

Posted on September 12, 2016 by ffswpadmin

CANADA PENSION PLAN ENHANCEMENTS WILL DO NOTHING TO ELIMINATE 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).

The last post discussed how the CPP plan in its present format financially discriminates against singles and the poor. CPP is part of the Pillar 2 plan of Canada’s retirement income system for seniors. The last post (program) showed how Canadian seniors will not receive full CPP benefit if they have not made full work contributions for forty years and if they do not have full Yearly Maximum Pensionable Earnings(YMPE) contributions for those forty years. Canadians most likely to not receive full CPP benefits are those who have not worked for forty years or have not been able to make full contributions because of low income. Senior singles also pay more and get less in seniors benefits (pay-more).

Recently there has been much discussion about CPP contributions and benefits being enhanced because Canadians are not saving enough for their retirement. Apparently, the enhancements will include increasing the amount of required CPP contributions and, in return, the amount of CPP benefits received.

Enhancements include: Once fully implemented in 2025, the total CPP contribution rate (which is shared between employees and employers) will increase from the current rate of 9.9 per cent to 11.9 per cent of eligible earnings up to a maximum of $72,500. In addition, earnings between $72,500 and $82,700 will also be subject to mandatory CPP contributions at a lower rate of 8 per cent.

CPP retirement benefits will also be increased. The replacement rate for pensionable earnings will increase from 25 per cent to 33 per cent. According to the Department of Finance, it will take “about 40 years” for the full increase in retirement benefits to be phased in. The Department of Finance has stated that like the current program, future benefits will be based on the years of contribution and actual contributions.

The significance of these changes is astounding. Future benefits will remain the same based on the two principles of the years of contributions and actual contributions, in other words, same old, same old. The premise remains the same – individuals with highest YMPE will receive the most CCP, while those at lower income levels will receive the least CPP benefits because they have not been able to make maximum CPP contributions.

The YMPE will be be raised to between $72,500 and $82,700 (up from $54,900 or approximately $25 per hour in 2016). Based on approximately 2,200 hours of work per year, $72,500 equals approximately $33 per hour and $82,700 equals approximately $38 per hour. In other words, the more income an individual makes, the more CPP benefits they will receive.

In 2013, the minimum wage was around $10 in all provinces. In constant dollars, this rate was similar to the rate observed in the late 1970s. It is only in the last several years that the minimum wage has increased somewhat. Historically, Alberta’s minimum wage went from $8 in 2007 to $9.95 in 2013. In addition to the stagnant wage, the Alberta income tax rate in 1999 went from a graduated rate based on income to a flat tax of 10%. The tax rate for the middle class and wealthy was changed to 10% while the rate for lower income individuals went up from 8% to 10%.

The 10% tax rate remained in place for about fourteen years until 2015, when the NDP came into power and reverted the flat tax system to a graduated system.The current minimum wage rose to $11.40 in October 2015 and is set to rise to $12.20 in October 2016. This is has all been a result of the NDP party coming into power in Alberta after a forty year reign by the Progressive Conservative party.

At the present time, the difference between Alberta’s minimum wage today of $12.20 per hour and the present CPP YMPE rate of $25 per hour is striking. What this means is that the middle class and wealthy working for forty years will be able to attain greater CPP wealth than the person earning a minimum wage who has faithfully worked for 40 years. Why wouldn’t those working at minimum wage be angry and in utter despair at policy decisions that don’t financially include them with fairness and equality? If ordinary persons without math degrees can figure this out, why can’t government, policy makers and businesses?

In order for there to be financial fairness, the minimum wage has to rise at same rate as the increase the CPP YMPE rate! Think that is going to happen, don’t hold your breath!

PROBLEMS:

Governments and businesses give many excuses as to why minimum wage should not be raised
Businesses don’t want to pay the proposed increases of their required CPP employer contributions because they say it will impact their businesses-they are threatening to go to contract and part time employees.
Currently only two provinces index their minimum wages based on the Consumer Price Index, thus offering guaranteed protection from wage erosion. Currently, there is no accountability for those actually determining the minimum wage.
With new proposed enhancements earnings between $72,500 and $82,700 will also be subject to mandatory CPP contributions, but at a lower rate of 8 per cent. Why is it that higher income earners always get the reduced rates? Why should those earnings between $72,500 and $82,700 get a lower rate of 8 per cent? What is the factual basis for choosing a lower rate for income range between $72,500 and $82,700?
Minimum wage or a living wage and income tax rates are two very important factors that help determine quality of financial life for singles and the poor. So why is that politicians, governments and businesses always give better rates to higher income earners (middle class and wealthy than lower income earners and to families over singles)? Those at lower income levels are more often made to pay more while getting less. Examples of this are increasing minimum wage at pitiful rates and making lower income earners pay the same income tax rate while decreasing rates for the middle class and wealthy as described above (Alberta Conservative government). The present Liberal party did same by reducing taxes only for the middle class, but not reducing rates for the poor.
Upside down finances continue to be perpetuated (finances) so that the poor are forcibly made to remain poor by the upside down financial decisions by government and politicians. Why don’t single persons deserve a full CPP benefit if they have been faithfully employed for forty years, (never used EI, never used maternity/paternity benefits, etc.) but have not been able to contribute full YMPE because of a lower income?

CONCLUSION

The policy decisions by government for CPP enhancements past and present have created a pillar whose base is cracked and breaking. The only way most ever singles, early divorced singles, single parents and the poor can ever hope to reach the maximum CPP YMPE is by working multiple jobs. Married or coupled family units may have the option of both spouses working and receiving two CPP pensions. The indexing of a minimum wage or a living wage is paramount in avoiding financial discrimination in CPP enhancements for singles and the poor. To do anything less is a blatant violation of the human and civil financial rights of poor and low income Canadians.

THE MINIMUM WAGE IN CANADA

An excellent article “The Minimum Wage in Canada” by the Canadian Labour Congress, April 2015 gives an excellent perspective on minimum wage (minwage).

Some of the details of this article include the following:

“A profile of minimum wage workers will show that the stereotypical teenage employee is not the reality and many individuals are struggling to provide for their families on minimum wage incomes. Common concerns about increases to the minimum wage, such as a rise in unemployment rates, the financial impacts on small business, and alternative policy changes to address poverty will be discussed in order to break down the myth that an increase to the minimum wage will have detrimental economic impacts…..

British Columbia froze its minimum wage at $8.00 an hour for almost a decade. During this freeze period minimum wage earners were put under increasing financial strain as inflation restricted their ability to consume. Currently only two provinces index their minimum wages based on the Consumer Price Index, and are offered guaranteed protection from this type of wage erosion….

There are two clear considerations that must be made when evaluating the adequacy of the minimum wage in Canada….Letting the real value of the minimum wage deteriorate just creates a cycle of poverty….

For those who oppose increasing the minimum wage in Canada, there are several arguments used to justify maintaining low rates. …The amount of people earning the minimum wage has remained under 10% of the total working population. This is not a large enough portion of the population to make a difference; if most people already earn above the minimum wage there’s no need to increase it. One thing often used to strengthen this argument is that, of the small number of minimum wage workers that exist, the majority are teenagers or students who are not attempting to support a family. Instead, they are working for personal money or for the experience and will soon move up the job ladder. The first major issue with this argument is that it blatantly accepts discrimination as a reason to pay someone low wages. Age is one of the prohibited grounds outlined in Section 15(1) of the Canadian Charter of Rights and Freedoms which guarantees all citizens equal and fair treatment under the law. To say that the wages of adults should be prioritized over the wages of young workers is a clear violation of this right. The purpose of setting a minimum wage is to create a sense of equality for vulnerable workers of all ages. Second, teens account for less than half of the minimum wage earners, so there are quite a few adults in Canada earning the lowest legal wages. Young adults may not have been active in the labour market for long but they are just that, legal adults who have financial responsibilities. Some do attend a post-secondary institute; however, that does not mean they are working out of choice. Not all young people have the financial support of their families to help them pursue their education. They rely on their paid employment to cover the ever increasing costs associated with education. ….The reality is that minimum wage earners are not one specific group of people and they definitely do not fit the stereotype of a few teenagers and students getting their first jobs. ….

The philosophy associated with our economic system is the constant need to keep costs as low as possible, which also means low wages for much of our workforce …. The theory is that as wages increase operation costs, employers are forced to find other ways to make up the difference. ….Although Canada’s unemployment rate has made some recovery since the 2009 recession, as of August 2014 it was still 7.0%…. Given the current economic climate, this argument suggests that the potential repercussions that increasing the minimum wage might have on unemployment rates, could seriously affect Canadian society. After examining the economic research available on the connection between unemployment and minimum wage increases, it is difficult to say with conviction how the two factors are related, if they are at all….. According to The World Bank’s World Development Report 2013: Jobs, there is no known universal impact of the minimum wage on unemployment rates. In order to say with certainty what the impact actually is, individual countries would have to closely monitor the labour market and compile vast amounts of research (World Bank, 2012). Our opinion on the matter is very similar. Based on the research that has already been done, there is too much contradicting evidence to say with confidence what the real effects on unemployment rates are.

A proposed alternative to increasing the minimum wage is to instead increase the basic personal tax exemption…..This policy does not introduce more money into the economy, it simply redirects it from government revenues to individual households. ….The redistribution of money does not make Canadians better off, it only continues to subsidize the low wages offered by employers…..

Minimum wage workers are more likely to be employed with a large firm than a small company; a troubling trend that requires further examination. This recognition that large scale companies are more likely to pay the minimum wage than small businesses raises some serious concerns about who is utilizing minimum wage laws and why. ….However, some of Canada’s largest companies continue to offer many of their staff members only the minimum wage despite their recent success and profitability…..

Individuals earning low wages are the least likely to be meeting all their needs, so when their wages increase instead of saving their new income they use it to purchase the goods they have been lacking. This directly contrasts the wealthy who are more likely to save or invest additional income than inject it back into the local economy.

Minimum wage laws can actually benefit communities. Studies have shown that because individuals cannot afford to financially support their households on the minimum wage, they often turn to social services for assistance ….This means that the taxpayers are essentially subsidizing the low wages of a company that makes billions in profits. Additionally, when large firms move into an area and offer low priced goods, it drives down the wages of workers employed at small firms that need to reduce costs to stay competitive….. In some cases, not only will wages in the area drop but small employers will be forced to close—eliminating jobs altogether.

Even with most provinces attempting to conduct neutral reviews on the minimum wage rate, the final decision still remains politically motivated. One team of researchers found that, while the proximity of an election did not influence the decision to alter the minimum wage, the political ideologies of the government in power did. The New Democratic Party in particular were more likely to have a higher minimum wage rate in place than other parties (Dickson & Myatt, 2002). A 2006 study (Green & Harrison, 2006) found similar trends relating to the minimum wage and political agendas; conservative governments would let the minimum wage stagnate and centre-left parties would approve increases but neither were willing to make drastic changes. ….The issues at play when debating the appropriate minimum wage rate are complex, as it is not exclusively an economic policy….. Rather it is the ideology of “universal fairness” that generates support ….. This attitude is further portrayed by research that suggests the public perception of poverty is not to blame the victim. One study found that respondents, instead of citing the self-destructive behaviours of individuals like laziness and the inability to adhere to a budget, were more inclined to believe structural factors were the major contributors to poverty. This included social and economic factors like low wages (Love, et al, 2006). Individuals also recognized that employment no longer guaranteed people the means to escape poverty, as wages are often insufficient and, while workers are often willing to work more hours, full time positions are becoming more rare (Love, et al, 2006). The reality is that minimum wage policy is an economic, political, and social matter. As Canadians we must decide what we need from our minimum wage rates, then determine how to balance all these factors to achieve that goal. Decreasing wage inequality should be the first priority, as minimum wage policies have the potential to prevent extreme poverty. Increase the wages of other low paid workers and allow individuals to accumulate more financial support (World Bank, 2012). We must decide what quality of life we feel all Canadians deserve. Should full-time workers only be able to meet their basic needs like food and shelter, or are they entitled to a lifestyle that also considers their social and political well-being when determining basic living standards….? It is not possible to set the minimum wage based solely on economic factors because these broader social implications are the end results for Canadians.

Currently, there is no accountability for those actually determining the minimum wage.

This is not an issue that only affects businesses, so the human aspect needs to be given more priority in the minimum wage debate. While it is important for our economy to remain stable, we must also ensure the needs of workers are being met. They should be able to enjoy a certain standard of living; however, full-time employment is no longer a guaranteed escape from poverty. It is time to evaluate what our society deems fair, and compensate minimum wage workers accordingly. Raising the value of labour at the bottom, is a raise for everyone in Canada”.

(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

Posted on August 31, 2016 by ffswpadmin

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:

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.
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:

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.
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).
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.
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.
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).

OAS CLAWBACK OUTRAGEOUSLY BENEFICIAL TO UPPER MIDDLE-CLASS MARRIED OR COUPLED SENIORS, BUT FINANCIALLY DISCRIMINATORY TO SINGLES AND POOR

Posted on August 29, 2016 by ffswpadmin

OAS CLAWBACK OUTRAGEOUSLY BENEFICIAL TO UPPER MIDDLE-CLASS MARRIED OR COUPLED SENIORS, BUT FINANCIALLY DISCRIMINATORY TO SINGLES AND 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).

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

Occasionally, there are topics that give one pause resulting in questioning as to the efficacy of the formulation behind the topic. The OAS Clawback (proper name is OAS Recovery tax as per Canada Revenue Agency) and the financial discriminatory properties behind the program is one such topic. One way to resolve the questioning is to look at the topic in detail.

OAS is a federal social program designed to provide a very modest pension to low- and middle-income retirees. It is part of the universal government benefits for seniors (pillar 1) to ensure income security for senior Canadians. In 2016 the OAS maximum amount is $6,680 for a single person and $13,760 for a couple. OAS clawback which began around 2011 does very little to clawback the income of upper middle class persons, particularly married or coupled family units. The clawback of OAS benefits in 2016 starts with a net income per person of $72,809 (couple $145,618) and completely eliminates OAS with income of $118,055 (couple $236,110). The repayment calculation is based on the difference between personal income and the threshold amount for the year. The repayment of OAS is 15 percent of that amount. All OAS is clawed back if personal income is over $118,055.

According to Human Resource Development Canada, only about five percent of seniors receive reduced OAS pensions, and only two percent lose the entire amount. This program benefits wealthy couples and widowers the most. OAS clawback for couple 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. There are not many ever single seniors, early divorced in life seniors and single parent seniors who could hope to achieve a net income of $72,809; however, for wealthy widowers this may be easier to achieve and they are the ones who complain about clawback.

An example of OAS clawback is the following example:

The threshold for 2015 is $72,809. If your income in 2015 was $80,000, then your repayment would be 15 percent of the difference between $80,000 and $72,809:

$80,000 – $72,809 = $7,191

$7,191 x 0.15 = $1,078.65

You would have to repay $1,078.65 for the July 2016 – June 2017 period.

Many financial advisors will give strategies on how to avoid the clawback while benefitting married or coupled family units the most. This is just another example of financial marital manna benefits and manipulation of assets that within the legal limits of Canada Revenue Agency’s laws allows married or coupled person to increase their wealth (manipulation-of-assets). This also is just another example of the upside finances perpetuated in this country by politicians, government and businesses that benefit married or coupled persons the most (quality-of-life).

Limiting OAS Clawback

There are a few strategies you can implement to reduce clawback amounts (strategies):

Split your pension with your spouse. If your spouse has a lower income, you can transfer up to 50 percent to your spouse, which should reduce your overall income. This could also include a Registered Retirement Income Fund and annuity income.
Dip into your Registered Retirement Savings Plan before you turn 65. An RRSP is only a tax deferral, meaning that at some point, you’ll have to pay those taxes. Consider taking funds out before reaching the age of 65 so you do not lose the OAS.
Use your tax-free savings accounts to generate investment income, which is non-taxable and would not count towards your net income.
Interest on funds borrowed to earn investment income can be deducted and could reduce your net income.
Watch for capital gains. If you are planning a sale of an asset that could trigger large capital gains, consider selling it before you turn 65.

From another financial planner (minimizing-clawback): “At the end of the day, more people’s concern over OAS clawback will not be such a big deal simply because there are not a lot of people over the age of 65 making more than $72,809 of income. The people that do may have significant pensions or continue to work and earn and income over the age of 65. There will also be a group of people that trigger significant capital gains from the sale of second property or investments but the good news is they will only lose part or all of there OAS in the one year that the capital gains is realized and reported on the tax return. But if you happen to be one of the few that will get affected, make sure you plan ahead accordingly”.

CONCLUSION

The OAS clawback (implemented by Conservative party) is just another example of how politicians and government have ensured that senior upper middle class married or coupled family units with incomes between $72,809 to $118,055 net income per person will benefit more from the OAS government program. These same politicians and government agencies have financially discriminated against ever single seniors, early divorced in life seniors and single parent seniors by ensuring only five percent of seniors will receive reduced OAS pensions, and only two percent lose the entire amount. Note we have specifically stated upper middle class married or coupled family units because wealthy married and coupled family units have already been excluded from receiving OAS pension by virtue of the $$118,055 (couple $236,110) net income limit.

To add further insult, politicians and government have ensured that the upper middle class will receive benefit upon benefit upon benefit to reduce the effects of the OAS recovery tax program. The Liberal party (now ruling federal party) implemented a 1.5% reduction in income tax for incomes between $45,282 and $90,563. These are middle class incomes, not incomes of the poor. Pension splitting is another program that reduces the possibility of OAS clawback. As stated above, past governments have also ensured that marital manna benefits and ability to manipulate assets have been been given primarily to married or coupled family units all within legal limits of financial laws. All of these benefits perpetuate an upside-down financial system where the upper middle class and the wealthy are able to achieve greater wealth than ever single, early divorced in life and single parent seniors. In other words, the OAS Recovery Tax program (supposed to provide income security for poorer seniors) is a failed program which ensures greater wealth for the upper middle class and greater poverty for singles and the poor.

SOLUTION (added August 31, 2016)

Equivalence scales (scales) and net worth – how many times can it be said over and over again that wealthy and upper middle class married or coupled family units are increasing their wealth by government programs designed to give more to these family units? To correct this financial discrimination and upside finances for singles and the poor, equivalence scales and net worth need to be applied to these programs. Monies saved could then be redistributed to the poor regardless of marital status.

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

HISTORY OF FAMILY TAX CREDITS OVER DECADES ARE FINANCIALLY DISCRIMINATING TO SINGLES – Part 2 of 2

Posted on August 23, 2016 by ffswpadmin

HISTORY OF FAMILY TAX CREDITS OVER DECADES ARE FINANCIALLY DISCRIMINATING TO SINGLES – Part 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).

The August 2, 2016 post (decades) outlined almost all of the family tax credits that have been brought into play over the decades. Many are financially discriminating because they leave ever singles and early divorced singles out of the equations. Single parents do receive some of these benefits for their children, but are not included in all the benefits afforded to having a spouse or partner.

The above table (updated Aug. 29/16) shows benefits available to a married or coupled family units with children from time they are able to use maternal and parental benefits to time of death of one spouse (yellow, blue and green fill in). Single parents only have benefits related to their children (orange fill in). Married or coupled family units without children have all the benefits related to having a spouse or partner (navy fill in). Ever singles and early divorced singles, have none of the benefits available to married or coupled family units (fill in is blank because they have none of the benefits of spouse #2. In addition, they are often are unable to max out RRSP and TFSA contributions). (While late in life divorced singles have none of the benefits for spouse #2, they may have been able to accumulate more net worth and assets while they had a spouse or partner).

Age categories of age 30 to 50 years are used to show suggested family unit of two children, one newborn and second child born two years later. Life expectancy for Canadians is 80 for men and 84 for women so ages in table were calculated to age 85 assuming both spouses were still alive at age 85.

Estimation of the ADVANTAGES OF BENEFITS include the following:

Maternity and Parental Benefits

It is difficult to determine total number of Canadians who have receive EI benefits in a year as statistics seem to be based on month to month data. However, there are studies that state annually about 25% of EI claimants receive maternity and parental benefits. (Some parents may not receive these benefits if they did not contribute to EI or were not employed long enough receive any benefits).

StatsCan’s latest data on Employment Insurance recipients indicates Canada’s federal government (huffingtonpost) is growing stingier with EI benefits since Canada’s EI regime has been significantly toughened under Harper’s Conservative government. Changes that came into place include tougher, more complex rules for keeping EI benefits, and a new requirement that EI beneficiaries who have used EI frequently have to take any job available to them and accept as much as a 30-per-cent pay cut.

There is no such restrictions for maternal and parental benefits. Although the benefits have a defined time limit (usually up to a year), there is no exhaustion of time limits for benefits for maternity and parental benefits as there is for regular unemployed persons (also can have benefits for multiple pregnancies). While it is acknowledged that mothers go through stress of caring for a new infant, it should also be acknowledged that unemployed persons receiving EI go through stress of applying for EI and then constantly have to be looking for a job while EI benefits are running out and they have no money to pay for expenses. Employees in EI offices are often not the most pleasant people to deal with.

Question: do beneficiaries of EI (i.e. two or more children) use more benefits than other beneficiaries during working life of 35 years? Present maximum EI contributions equal about $1,000 per year. Over a 35 year period of working, contributions by a married or coupled family if both spouses are working is approximately $70,000 (this only holds true if each spouse is employed for 35 years each, many wealthier couples retire at age 60, not 65). If a married or coupled family unit have two children with a maximum allowed $50,800 EI yearly insurable earnings at 55%, they will basically have used a large portion of the monies they contributed to the plan (with three children they will definitely likely have used all monies contributed).

Study ‘Benefitting from Extended Parental Leave’, March 2003, Katherine Marshall (statcan): “Significantly more mothers who returned within eight months reported annual earnings below $20,000 in their previous or current job (49%) compared with those who returned after almost a year (29%) … this suggests that women with lower earnings (and possibly lower savings) may not be financially able to stay at home for an entire year on 55% of their earnings….Also, more likely to be a household where total income was under $40,000 (46%) compared with those who returned between nine and twelve months (38%)”. Many families and family organizations are lobbying for the lengthening of maternal and parental leaves to two years. It has to be stated once again that upside down financing ensures that more wealthy parents get to use full EI benefits than poor parents. Dollar value assigned for maximum maternity and parental EI benefits for two children equals approximately $55,880 ($50,800 X 55% X two children).

Canada Child Benefits – the outrageous discrimination of this program where net worth and assets has not been taken into consideration has already been discussed (poverty). Maximum annual Canada Child Benefits for 2016 are set at $6,400 per child ages one and up to six years and $5,500 for children ages 6 to 17. Dollar value calculation using ‘middle of the road’ value (maximum values divided by 2) of $6,400 and $5.400 annually ($3,200 times five years times two children ages 1 and up to six equals approximately $32,000, $2,700 times 12 years times 2 children ages 6 to 17 equals approximately $64,800) equals a total of approximately $96,800.

Registered Education Savings Plan (RESP) – based on the amount of the RESP contributions and income level, the government may additionally contribute up to $7,200 per child as well as other grants. Dollar value for two children may total at least $14,400 of government benefits not counting other grants such as provincial grants.

Spousal Registered Retirement Savings Plan (RRSP) – allows a higher earner, called a spousal contributor, to contribute to an RRSP in their spouse’s name (it is the spouse who is the account holder). A spousal RRSP is a means of splitting income while working and during retirement and, therefore, possibly pay less tax. (It is not possible to calculate how much income tax might be saved).

Tax Free Savings Account (TFSA) – implemented in year 2009 with maximum contribution allowed per person of $5,500. For years 2009 to 2016, the approximate maximum allowable amounts for spouse #2 is a total $42,000 (all tax free and not including monies generated from investments). The Canadian Parliamentary Budget Office states “the TFSA program is regressive, overall, it offers no additional benefit to low- or middle-wealth households” (global) . TFSAs for the wealthy are used as tax shelters. It has been suggested that one half of Canadians have a TFSA account, but only half of those with the account have contributed to the account on a regular basis. It is a well known fact that mostly wealthy Canadians have been able to contribute the maximum amounts to their accounts even in their senior years (another upside financial scheme to allow wealthier Canadians to gain even more wealth). Many singles and poor families do not have the financial ability to max out their TFSA contributions. Dollar value used for spouse #2-lifespan from age 30 to 85 years equals $5,500 time 55 years for a total of $302,500.

Income tax (federal) decreased by 1.5% for those earning between $45,282 and $90,563 – each spouse receives benefit of reduced income tax. Using 2015 Canada Income Tax form, the calculated income tax for approximate income between $45,282 and $90,563 is $16,539. A 1.5% tax reduction equals $248 annually. The majority of ever singles and early divorced persons do not have incomes over $45,282, especially seniors. While middle class families with children get less of the Canada Child Benefit, this is offset by the reduced income tax. This is one benefit piled on top of another benefit. Dollar value used for spouse #2 (assuming 55 working years) is $248 time 55 working years for a total of $13,640.

Pension Splitting – allows splitting of the pension income between spouses to reduce tax paid. This strategy allows the spouse who has the highest income to lower his/her tax payable by sharing up to 50% of his/her pension income with his/her spouse. Apparently 2.2 million Canadian seniors benefit from pension income splitting. This may also allow the higher earner to receive the full OAS benefit without clawbacks. Review of online data (Splitting) shows: “of the $1.2 billion federal cost for pension splitting in 2015, $250 million of that cost is due to increases in OAS payments that wouldn’t have otherwise occurred. Hole. Wealthiest 10% of families get 31% of this benefit while bottom 50% of families get 2% of the benefits. Single-parent families and Canadians living alone would gain no benefit from the creation of this tax loophole. The gains from the pension income splitting loophole go disproportionately to the richest four deciles—the richest 40% of the Canadian senior population. In fact, the richer the senior family, the more it receives from this loophole. The poorer the senior family, the less support it receives. The poorest 10% of seniors receive an average of 10 cents in terms of a tax break from this loophole, whereas the richest 10% receive an average of $820 in perks. The richest 10% of senior families receive more benefit from this loophole than the bottom 70%. Looking at it from another vantage point, one out of five of the richest 10% of Canada’s senior families receive a cheque for over $1,000 from this program while three out of five make some gain from it. Of the poorest half of all senior families, only one out of every 1,000 seniors gets more than $1,000 from pension income splitting. Seven out of 10 seniors enjoy no benefit at all from this tax loophole. The poorest half of all senior families—they’re making less than $36,000 a year—receive only $2 out of ever $100 paid out by this loophole. In contrast, the richest 10% of senior families making over $85,000 receive $30 out of every $100 paid out. Most of the seniors in the bottom 40% of the income distribution are single women. As such, there is no one to split with and therefore no benefit from this loophole. The cost of this tax loophole is large and gets larger every year. While most of this program’s payouts are going to Canada’s richest seniors who don’t need extra support, there remain seniors who live below the poverty line. In fact, to lift all Canadian seniors above the After-Tax Low Income Measure (AT-LIM) poverty line in Canada, it would cost approximately $1.5 billion a year—slightly less than Canadian governments are currently spending to support Canada’s richest seniors. As with many government decisions, budgets are all about policy choices: in the case of pension income splitting, the political choice is to support rich senior families instead of lifting all seniors out of poverty – even though they both cost approximately the same. While income splitting is often touted as a loophole for middle class Canadians, this study illustrates how in reality, it is actually a loophole for Canada’s richest families…..The richer the family, the more it stands to gain; the poorer the family, the more it stands to lose. Under any income splitting scenario, the bottom six deciles of Canadian families wouldn’t even get an equal share of the benefits”. Dollar Value: If the richest 10% receive an average of $820 in these perks annually, then $800 at 20 years from age 65 to 85 equals $16,000 in income tax savings not including the benefits received from OAS not being clawbacked.

OAS Clawback – the clawback of OAS benefits in 2016 starts with a net income per person $72,809 (couple $145,618) and completely eliminates OAS with income of $118,055 (couple $236,110). According to Human Resource Development Canada, only about five percent of seniors receive reduced OAS pensions, and only two percent lose the entire amount. This program benefits wealthy couples and widowers the most. Essentially, there is virtually no clawback for the wealthy so no dollar value is calculated. No dollar value attached, but it is apparent that upside down financing prevails and wealthy families lose nothing-they get to retain their wealth. The OAS Clawback benefit is basically a useless benefit.

Involuntary Separation Benefit – in Involuntary Separation (spouse in nursing home), certain benefits may help pay for energy costs, and provides relief for sales and property tax and may also allow a portion of the Long-Term Care Home accommodation cost to remain with the spouse in the community. Qualifying under “Involuntary Separation” would allow both spouses to receive their pensions as single individuals (usually applies to low income seniors). Not possible to calculate dollar value.

Survivor Benefits – benefits can apply to pensions including public pensions. Details will not be discussed here and no dollar value has been assigned.

LOST DOLLAR VALUE TO SINGLES or looking at it in another way – Estimated Positive Dollar Value for married or coupled family units with two children

Maternal and Parental Benefits $55,880
Canada Child Benefits $96,800
RESP $14,400
Spousal RRSP (not possible to estimate dollar value)
TFSA $302,500
Income tax Reduction $13,640
Pension splitting $16,000
OAS Clawback (useless benefit as only richest 5% of Canadians get clawbacked-most married or coupled Canadians get to keep their OAS even with wealth)
Total $490,220

Estimated Positive Dollar Value for married or coupled family units without children

Spousal RRSP (not possible to estimate dollar value)
TFSA $302,500
Income tax Reduction $13,640
Pension splitting $16,000
Total $332,140

Estimated Positive Dollar Value for Single Parent with two children (added Aug. 24/16)

Maternal and Parental Benefits $55,880
Canada Child Benefits $96,800
RESP $14,400
Total $167,080

Estimated Positive Dollar Value for Ever Single and Early Divorced Singles – Total $0 due to fact of no children and no spouse or partner (added Aug. 24/16)

CONCLUSION

New Canada Child Benefits if they continue in perpetuity for next twenty years implies that many middle class and wealthy married and coupled family units with children will receive benefits that equal the costs of raising children (estimated $250,000 per child) while growing their wealth. Benefits on top of benefits and overlapping of benefits are most advantageous for married or coupled persons with children and without children. Some benefits carry through all the way from age 30 to age 85.

While it is recognized that this exercise has only a gestimate of dollar values, there can be no doubt that many of the benefits (most initiated by the Conservative and perpetuated by the Liberal Party) continue to increase wealth for middle class and higher income married and coupled family units with and without children. Singles parents only receive the child benefits. Singles, single parents and poor families can never financially achieve same kind of wealth as married or coupled family units because they have been left out of financial formulas due to financial discrimination. The political will is to support rich families instead of lifting singles and poor families out of poverty.

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