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