NET WORTH AND ASSETS CONTRIBUTE TO FINANCIAL DISCRIMINATION OF 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).
When politicians, government and the wealthy continue to perpetuate myths that net worth and assets are too difficult to calculate or should not or cannot be included in financial formulas, this continues to make it possible for the wealthy to maintain their wealth and impossible for singles and the poor to maintain or increase their financial well-being thus resulting in financial discrimination and poverty for these groups.
The following three examples show how inclusion or exclusion of net worth and assets perpetuates the myths proposed by financial analysts, politicians, government and the wealthy.
Affordable Housing (services)
One assistance program in Alberta is Community Housing which is a subsidized rental program. It provides housing to families and individuals who have a low or modest income. Program funding comes from the federal, provincial, and municipal governments.To qualify, applicants must be Canadian Citizens, independent landed immigrants, or government sponsored landed immigrants. Assets and belongings cannot exceed $7,000. Assets include, but are not limited to:
- bank accounts
- investments (excluding RRSPs)
- equity in property
- equity in a motor vehicle (assessed by reviewing the value in the most current Canadian Red Book)
Legal Aid Alberta (legalaid)
Financial Eligibility Guidelines – If income falls within the amounts listed below, person(s) may be eligible for legal representation and to have a lawyer appointed. Representational services are not free. Repayment will be discussed if a lawyer is appointed. Legal Aid’s Financial Eligibility Guidelines allow the following eligible monthly income for family size of 1 – $1,638, 2 – $2,027, 3 – $2,885, 4 – $3,120, 5 – $3,354 and 6+ – $3,587.
An example of this is an actual court case going on at the present time. Legal Aid has refused to assist client’s claim of defence for an estimated $25,000 in legal fees. Legal Aid says client still has a large amount of property ($500,000 mortgage free), $34,000 in savings, tax free savings account (TFSA), and GICs and mutual funds worth another $21,000, plus $570 a month in old-age security payments with monthly expenses of $1,660. Legal Aid does not give coverage to individuals with assets in excess of $120,000. Legal Aid states: “client would be left with well over a half a million dollars in assets even after payment of legal fees.”
Family Tax Credits (tax-credits)
June 11, 2016 Financial Post Personal Finance Plan “Farm Plan Risky for Couple with 4 kids” shows how plethora of tax credits works for this family, Ed 32 and Teresa 33, stay at home spouse have four children ages 5, 3, 1 and newborn. Government employee Ed brings home $2,680 after monthly tax income. Net worth is already $502,000 including $200,000 paid for house. Non taxable Liberal Canada Child Benefit for four children will be $1,811 per month bringing income to $4,491 per month. (From ages 6 to 17, Canada Child Benefit will be $1,478 per month).
These three examples show how the inclusion or exclusion of net worth and assets benefit the wealthy and families more than singles and poor families. In Example #1, to receive housing assistance only $7,000 is allowed in assets. Really, that is it? Compare that to Example 3 where a family already having significant net worth will receive benefit upon benefit upon benefit in addition to Family Tax Credits. In Example #2, this could be said to be a good case where financial fairness has prevailed. This client has plenty of net worth and assets to pay for $25,000 legal defence. When the Legal Aid income scales are analyzed, it is apparent they have at least used some form of equivalence scales (finances). Hallelujah, here is one example where a family unit of two is not assessed at a value times two of that of family unit of one!
This post is just another example of the blatant hypocrisy and upside-down finances that financial analysts, politicians and government, and families perpetuate by not including net worth and assets in all financial formulas across the board whether they are local, provincial or federal or of a service type such as Legal Aid. The blatant financial discrimination of singles and the poor continues while the wealthy get to write their own ticket to wealth by paying less and increasing wealth.
(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).