TRUDEAU’S CPP INCREASE FOR WIDOWS MUST BE AN APRIL FOOL’S JOKE

 

TRUDEAU’S CPP INCREASE FOR WIDOWS MUST BE AN APRIL FOOL’S JOKE

(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).

Liberal Prime Minister Justin Trudeau’s CPP increase for widows must be an April Fool’s joke except it is not an April Fool’s day.

Justin Trudeau in one of his campaign promises has promised astounding 25 per cent increase to the Canada Pension Plan (CPP) for widows or widowers and would receive up to $2,080 in additional benefits every year with the increased survivors’ benefits under the CPP and Quebec Pension Plan (QPP).  (Added November, 2019 Survivor benefits would see an increase of up to $2,080 under the Liberal proposal, which would need provincial approval.)

Trudeau said losing a partner is one of the hardest things to endure, and this added support will help during the period of grief.  “Seniors have built the Canada that we know and love today. And they deserve to enjoy their golden years to the fullest,” Trudeau said “Our parents have worked so hard and sacrificed so much to give us a good life,” Trudeau said.  “Once they get to retirement they shouldn’t have to worry about their savings running out.”

Apparently the only persons who experience grief and/or who have worked so hard  and therefore deserve more are the married and married parents.

Apparently this would take effect when person is widowed but at what age?  (Updated October 1, 2019)

(added November, 2019) Excerpt from article ‘The election promises that could affect your personal finances’ by a financial planner (election-promises): “The Liberals have also proposed an increase in Canada Pension Plan (CPP) survivor benefits payable to the surviving spouse of a deceased CPP contributor. This could be meaningful for many widows and widowers, who might otherwise receive only 60 per cent or less of the CPP pension of their deceased spouse. That said, those who already have high CPP pensions of their own may receive little to no CPP survivor benefits if they are already entitled to the maximum CPP or close to it based on their own contributions — a potential flaw in the CPP system.” (Comment by blog author:  A potential flaw, really?  Why is it many financial planners only take into consideration married persons while excluding singles from the household definition?  As of this date it is unknown whether this election promise will be kept and what form it will take.)

WHO IS INCLUDED AND WHO IS NOT

Included:

Married seniors with and without children who have deceased spouses and can check off that magic box ‘widow’ on their income tax forms.

Excluded:

Singles never married, no children

Singles who have adopted or are parents of children (sometimes willingly or unwillingly through horrible circumstances)

Divorced/separated persons with and without children

Common law persons with and without children – are they considered to be ‘widowed’ or just common law?

MOST PENSIONS BENEFIT MARRIED THE MOST

At present time, the CPP plan already benefits married the most.  Singles who have worked for forty years while contributing to CPP can die at one day after the age of 65 and receive only the flat rate death benefit of $2,500.  This amount has been in place for many years, is not indexed for inflation and doesn’t begin to cover funeral costs.  Their entire lifetime CPP contributions except $2500 will be forfeited without any benefit to the estates of single persons.

Combined survivor and retirement pension at age 65 in 2019 already equals $1,154.28 for both widowed and singles.  Why does Trudeau believe widowed should receive more CPP benefits and have better lifestyles than singles?  After all widowed are now ‘single’ and should have to live the same frugal lifestyle of many singles.

Public and private service pensions are taxed, but both spouses will be able to pension split and maybe receive less OAS clawback while one spouse or both spouses are receiving pensions.  There also is the possibility of receiving multiple pensions – surviving spouse of the deceased employee will receive pension to which he/she has not contributed as an employee plus receive his/her own pension.  With 25 per cent survivor CPP increase this is just another example of compounding of benefits on top of benefits for the wealthy and the married, both in married and widowed state (regressive tax expenditures).

Elizabeth May, Green Party applauds social justice but has lobbied to repeal legislation that denies pension benefits to spouses who have married after the age of 60 or retirement even though these newly married spouses haven’t contributed one dollar to that pension plan.  Now as widowers they will also receive a whopping additional 25 percent CPP bonus at age 75 after being married for only 15 years or less.  (Many pension plans have this clause for newly married elderly persons in their pension policies).

CONCLUSION

Where is the critical thinking on the part of politicians? Do they really think all Canadians are stupid and can’t do the math?  Which political party should one vote for when they all are like ‘pigs at the trough’ making unrealistic vote getting promises that benefit wealthy and married the most and don’t include Market Basket Measure and declaration of assets in financial formulas?  Where are the Elizabeth Warrens’ of the Canadian political world who have financial formulas that provide social and financial justice for all, not just the wealthy and the married?

Only the married at the time of being widowed would ever get an astounding 25 per cent CPP widow pension increase.  The Canadian senior population is not made up of just married/widowed persons.

Reader opinion letters in newspapers on this subject are interesting to read.  They are mostly slam Trudeau or present a sense of entitlement by the married with no critical thinking of how the rest of the population will be affected..  For example, one of the few very comments about persons not able to benefit like LGTB couples, the comment was “a spouse is a spouse is a spouse”.  In other words, everyone who is not married be damned.

Trudeau, who touts gender equality, indigenous people rights, etc., has flagrantly financially discriminating on the basis of marital status.

Selective socialistic privileging of election promises like this one only lead to the rise of anger and rising populism.

(Addendum:  Added November, 2019   It is yet unclear how the above policy if implemented will be carried out.  If implemented it is likely that widowed seniors will be the beneficiaries.  Singles never married and divorced persons will receive zero benefits since they do not have spouses.

CARP – Canadian Association for Retired Persons in past years has stated that older unattached women are especially vulnerable to poverty. In 2016 approximately 28 percent of single older women (widowed, single or divorced) lived in poverty.  CARP has advocated that the federal government support single seniors, with particular regard to older women, with an equivalent to spousal allowance for single seniors in financial need.

Why are politicians giving benefits only to widowed seniors?

 

(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

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:

  1. 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.
  2. 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).
  3. 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.)

TEENAGE ENTRY LEVEL WAGE BELOW MINIMUM WAGE EQUALS BLATANT DISCRIMINATION AND SOCIAL JUSTICE FAILURE

TEENAGE ENTRY LEVEL WAGE BELOW MINIMUM WAGE EQUALS BLATANT DISCRIMINATION AND SOCIAL JUSTICE FAILURE

(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.)

In preparation for the 2019 provincial election certain provincial Conservative candidates once again are proposing economic changes that target the most vulnerable – teenage entry level wage below minimum wage and flat taxes (tax-system).

Alberta Minimum Wage Profile (April 2017 – March, 2018) ‘Alberta Analysis (wage-profile)- At 28.8%, the 15 to 19 year old group  remained the largest group of minimum wage earners in Alberta, and the 20 to 24 year old group was the second largest at 20.5%.  Over one quarter or 28.3% of Alberta minimum wage earners were students’.

Fact check:

    • Some teens work to help support their families.
    • Some teens have already left home and are trying to establish themselves as hard working independent, self sufficient  and responsible individuals.
    • Some teens are emancipated minors who leave their families because of abuse and untenable living conditions at home.
    • Some unattached (and married) individuals are living at home because they can’t afford Alberta housing prices.  From the report:   During the current reference period, 39.5% of minimum wage earners were living with their parents.’
    • Households with children receive Canada Child Benefits, unattached individuals do not.
    • It costs more for unattached individuals (independent teens) to live than married without children (Market Basket Measure).  If one person (unattached) household has a value of 1.0, the value for a two person (married) household is 1.4, not 2.0.
    • Discrimination based on age is a violation of human rights.

Conservatives have referred to the Australian model for teenage entry level wages. Australia Minimum Wage Reduction for Teens in 2018 (based on $18.93 minimum wage):

  • <16 years 36.8% or $6.97
  • 16 years 47.3% or $8.95
  • 17 years 57.8% or $10.94
  • 18 years 68.3% or $12.93
  • 19 years 82.5% or $15.61
  • 20 years 97.7% or $18.49

Living wage Calgary is over $18 ($36,000/yr.) and very few living wages in Canada are below $15.00.  Alberta minimum wage of $15 ($30,000/yr.) is below the living wage, and now Conservatives want to decrease the minimum wage, for example if based on Australian model, an 18 year old to approx. 70% or $10.50/hr. ($21,000/yr.)?

It is difficult to draw statistics on specific youth ages, but from several sources and from Statistics Canada Census Profile 2016, statistics show approximate Alberta population age 15 – 19 to be 240,035, age 20 to 24 to be 261,830.  Approximately 13% to 15% of total Alberta employees are from age group 15 to 24. Do Conservatives really want to target the minority group of 13 to 15%?

In 2011 (profile-youth) the Services-Producing sector in Alberta comprised 77.9% of all youth employment.  In 2011, Alberta youth accounted for 37.7% of those employed in the Accommodation and Food Services industry.  The average hourly wage paid to youth was $9.57 less than the average hourly wage paid to all Albertans. Approximately 63% age 15 – 24 are full  time employees. In 2011 average hourly wage for all Albertans was $25.47 and for age 15-24 $15.90.

Premise that age 21 before 100% wage takes effect or five years to become skilled at a job is just plain discriminatory, a violation of human rights and a social justice failure.  At 18 years of age, these persons are adults, they can vote, and many have left home to work and become independent persons. Their parents no longer receive Canada Child Benefits.

Why would parents support a policy that is discriminatory?

If problems lie with small business then solve the small business problem instead of targeting vulnerable minorities to bear the brunt of failures of business.   Apparently politicians, businesses can’t see that they will pay one way or another-more welfare and food banks at one end and ability to live decent respectful lives at the other.

Jason Kenney needs to reveal his plan for teen minimum wage reduction in its entirety so voters can make informed choices on their candidates.

CONCLUSION

What is needed in this democratic country are centre left and right parties for balance and to challenge each other so right and fair decisions are made.  What is not needed are far right Conservatives (Jason Kenney – teen minimum wage reduction and flat taxes, Doug Ford who broke his promise by cancelling Ontario Liberal’s basic income pilot project, and Trump’s economic policies making the rich even richer).

Proper budgeting implies that if there is a problem with deficits, taxes should not be cut without reducing the “fat” or excesses.  Conservatives are also once again proposing bringing back the flat tax without cutting loopholes for the wealthy. Why is it that they always target the vulnerable, cut the revenue side by cutting taxes, but never cut regressive tax expenditures or loopholes for the wealthy?

Parkland Institute (things_to_know_about_a_15_minimum_wage_in_alberta) makes the following points:

  • Consumer spending power has more impact on employment than raising the minimum wage.

  • Raising the minimum wage by meaningful amounts helps put a dent in increasing income inequality.

  • Income inequality increases health care costs and slows economic growth.

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

FINANCIAL REPRIEVE FOR INFANT DEATHS (MOTION 110) DISCRIMINATES AGAINST OTHER FAMILY DEATHS

FINANCIAL REPRIEVE FOR INFANT DEATHS ((MOTION 110) DISCRIMINATES AGAINST OTHER FAMILY DEATHS (updated April 29, 2018)

(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 original opinion letter of this blog post was published in local newspapers.  Because only a certain number of words can be published in newspapers, please note that the content of this blog post has been expanded to include additional information.

MOTION 110 – FINANCIAL REPRIEVE FOR INFANT DEATHS

A Federal Conservative MP has submitted to Parliament via Motion 110 (motion-110) a proposed financial reprieve for parents who lose infant to death, particularly SIDS.  The motion proposes investigation to ensure parents do not suffer undue financial or emotional hardship due to government programming design, particularly from Employment Insurance Parental Benefits.  He believes these families are affected by “bureaucratic oversight”.

PARENTS OF INFANT DEATHS SHOULD NOT RECEIVE FINANCIAL PRIVILEGING

How is revoking of parental benefits any different than revoking of senior death benefits?  If payment of benefits continues after month in which senior is deceased, these benefits have to be repaid.

Regarding bereavement leaves, why should parents of deceased infants receive more than what other families receive in bereavement processes?  If employed, most Canadians (if they are so lucky to have these benefits) receive up to one week of bereavement leave.  Continued difficulties with bereavement process are dealt with through sick leave, then short term and long term disability.  These same benefits are not available to those who are not employed at time of infant’s death.

Conservatives continually want to cut taxes but keep adding benefits.  Who is going to pay for yet another benefit that purposely privileges special interest groups, lobbyists, families and married or coupled households over singles and the poor?  Many government programs do harm due to design.  One example, if privileged benefits are given to parents of infant deaths, then same privileging should be given to estates of singles never married, no kids who die, including tragic deaths, before receiving Canadian Pension Plan (CPP) benefits.  In just ten years of employment with maximum $2,500 annual CPP contributions or $25,000, deceased single person’s estate will only receive a $2,500 death benefit.  Total of $22,500 contribution is forfeited to be used by the survivors of married or coupled households.  Imagine what the total might be for forty years of CPP contributions (?$90,000)!  Singles face righteous anger and despair because of financial discrimination and social injustice heaped on them when they are made invisible by “bureaucratic oversight”.

It should also be noted that Employment Insurance (EI) contributions at approximately a maximum of $850 for 2018 is also forfeited by singles if they never use EI during their lifetime of being employed.  These contributions are used by parents for EI Parental Benefits and those who use EI benefits multiple times during their employment lifetime.  For ten years of employment it is possible that singles will forfeit up to $8,500 and for forty years up to $34,000.

LOST DOLLARS LIST TO DATE

The above two examples of contributions forfeited by singles show that amount can equal up to $90,000 (CPP) plus $34,000 (EI) for a total of $124,000.  Our LOST DOLLARS LIST TO DATE already includes potential forfetting of EI dollars.  CPP dollars will be added to the list (lost-dollar-value-list) with potential lost dollar value for lifetime now totalling approximately $643,000.

In article “Income support rates in Alberta continue to soar” (social-assistance-rates) a stunning, almost unbelievable, statistic states that in January, (2018) 69 per cent of recipients were individuals, 23.5 per cent one-parent families, 4.9 per cent couples and 2.6 per cent couples without children.  The income support program helps those who do not have resources to meet their basic needs, including food, clothing and shelter.  NINETY TWO (92) PER CENT requiring income support were singles and lone parent families!

CONCLUSION

Government and social policies need to include singles in the definition of family.  It is time for families to realize that their children even when they become adult single children deserve the same financial inclusion as children during child rearing years.

Singles face financial discrimination every day when they have to forfeit their financial contributions (which are required by mandatory government policies) to married or coupled persons with and without children.  This can total not just hundreds or thousands, but hundreds of thousands of dollars.

Conservatives (and perpetuated by Liberals) continue to talk only about the middle class and implement policies and benefits that benefit the middle class and the wealthy most.  They also continue to talk about ‘family’. However, their definition of family doesn’t include singles or poor families.

Conservative ideologues and far right Christians like Stephen Harper (Canadian Conservative Prime Minister), Conservative 40 year rulers in Alberta, and Sean Hannity (staunch supporter of Trump, derider of Obama and owner of 20 shell companies containing approximately 870 housing units) continue to gaslight about helping families, but instead, make themselves even richer.

Politicians need to be held accountable for formulation of policies that privilege certain segments of society such as married or coupled households with and without children over singles and poor families.  Motion 110 is an abject example of financial discrimination based on the emotion of infant deaths over tragic deaths of other family members.  Changes in financial formulas should include review of how changes will affect all members of families, not just married or coupled households with and without children.

As one segment of society, singles do not deserve to pay more and get less than their married or coupled counterparts with and without children.

The death of an infant should not be financially treated any differently than deaths of other family members.

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

HOUSING ALWAYS A BIGGER LOSS FOR THE POOR

HOUSING ALWAYS A BIGGER LOSS FOR 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 post addresses how hypocritical and unfair housing is at the expense of the poor and to the benefit of the wealthy.  Midfield Park and the British apartment fire are two examples used here.

Midfield Park is a 48 year old mobile home park with crumbling sewer infrastructure.  As of August 2, 2014, the park had 306 residents in total, of which 104 were seniors and 7 were veterans.  The plan to close the park has been ongoing for more than 10 years. Initially plans included relocation and building a new park, but  plans for a new park were not realized.  Many residents did upgrades to their properties over the years which $10,000 doesn’t even begin to cover.  By the way, residents didn’t just include families, they included families and individuals (singles).

Many opinion letters were received from readers reiterating how poor always lose out.  Also, generosity has been shown to immigrants, refugees and illegal asylum arrivals to Canada.  Same dignity and respect needs to be shown to long time residents of Midfield Park who have paid their taxes, raised their families while taking care of their properties.

The third example is about DIY/Renovation/Real Estate TV programs – added Oct. 1, 2017.)

MIDFIELD PARK

MIDFIELD PARK mess would never happen to  the wealthy-handling of the Midfield Park a case of utter hypocrisy. Don Braid, Sept. 27, 2017 Calgary Herald (braid).  (Reproduced here in shortened format).

The Midfield  Park evictions are starting to look like trailer-park cleansing.  These people – 183 families – are being treated very differently than well-to-do folks who find themselves in the way of city plans and projects.

The Midfield families get $10,000 for agreeing to ship out, plus up to $10,000 in moving expenses.  There’s no compensation for lost value in mobile homes or other assets.

City council basically concludes that the family residences of these people are worthless.

The city provides counselling and moving assistance.  A lot of effort has gone into it.

But the compensation is an insult to low-income people who already struggle.  The city wouldn’t dare do this to an established middle-class neighbourhood, no matter how awful the sewer pipes.

About 150 families have already moved on.  It would be ironic if after all this grief – three years of it – the courts conclude that the city had no right to evict them in the first place.

This week a judge suspended the final closing, set for Sept. 30, until a hearing set for Nov. 22.

The delay until after the Oct. 16 (city) election should not stop Midfield Park from being a powerful election issue.

Here’s a question for every candidate – should the city cheap out on these victims because they live in, say, Mount Royal or Mayfair?

A case from 2006-07 shows the utter hypocrisy of what’s going on in Midfield Park.

The city was building the Elbow Drive-Glenmore Trail interchange, at the time a hugely expensive mega project valued at $110 million.

Land had to be trimmed from the north side of Glenmore adjacent to Elbow Drive…..The project would eat away at the buffer between Glenmore and affluent neighbourhoods such as Bel Aire and Mayfair.

From this point, please note both the similarities between this situation and Midfield Park.

The plans were suddenly changed for the Elbow-Glenmore interchange.  The project would infringe more closely on homes than previously expected.  This infuriated residents who decided to stay based on the original design.

Midfield Park plans shifted, too — much more radically.  The residents were first promised  a complete replacement homestead, and then the city cancelled it.

The Bel-Aire and Mayfair homes were still perfectly viable.  There was no need to expropriate or evict.

What the city did next astonishes me to  this day.

Councillors approved the borrowing of $13 million to buy homes at market value, with the hope of selling them later at a profit.

They did this even though a couple of residents were still able to sell homes for nearly $1 million, because the market was soaring at the  time

Effectively, the residents were insured against big losses even though the city had no obligation to help them.  Bel-Aire and Mayfair are lovely neighbourhoods to this day.

Midfield Park, by extreme contrast, will cease to exist.

And yet, the compensation is pitiful.  No family can recreate a similar home life in a new place for $20,000.

The city has offered nothing beyond the bare minimum that might stand up in court.  It certainly hasn’t borrowed money to buy mobile homes at fair value

The city insists that Midfield has to close because of decrepit utilities…..The mayor points out the long notice given to residents and the city’s many efforts to relocate people to “a safe, decent place to live”.  

All that may be so.  But in your mind, please move this scene to, say, iconic Prospect Avenue  in Mount Royal.

The city suddenly says to residents, “darn, your sewer pipes  are going to explode so we have to shut down the whole street forever”.

“You’ll have to move, but we’ve got a nice package for you – $10,000 cash, and another $10,000 in moving expenses.”

Unimaginable?  Of course.

But this is no fantasy in Midfield Park, where  the full weight of city government falls on people without wealth or influence.  It’s a true civic shame.

LONDON, ENGLAND APARTMENT FIRE

(The comments of a British politician says it all about the London apartment fire tragedy. This apartment was in midst of some of  the wealthiest residents of London).

Labour Shadow Chancellor John McDonald said the Grenfell victims were the result of politics.

“The decision not to build homes and to view housing as only for financial speculation rather than for meeting a basic human need made by politicians over decades murdered these families”.  (From The Associated Press, with files from Postmedia News).

DIY/RENOVATION/REAL ESTATE TV PROGRAMS

For all the Canadian and American DIY, renovation and real estate programs on television, it is interesting how most of them have primarily married or partnered participants.  Singles participants are in the minority.  Why is that?  Is it possibly because singles don’t have the finances do the DIY, renovations and buy the real estate at same level as married or partnered participants?

It is also interesting how Canadian and American programs require single marital status participants to have another person by their side in the programs.  Singles get along very well by being independent, taking care of themselves and yet these programs insist on having another person attached as an appendage to the single participant. Why is that?  Is it because singles are thought to be less interesting or unable to carry a conversation?

Two British programs that are a breath of fresh air are “The House that £100K built” and “The £100K house:  Tricks of the Trade”.  These programs actually have single marital status participants without a second person by their side and many the participants don’t have a whole lot of money for their renovations, some are as low as £7,000.

(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 1 of 2

HISTORY OF FAMILY TAX CREDITS OVER DECADES ARE FINANCIALLY DISCRIMINATING TO SINGLES-Part 1 of 2

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

This post was updated on August 3 and 9, 2016.

Child Benefits (also known as Baby Bonus) have been around for a long time.  While this, in as of itself, may or may not have produced substantial financial discrimination for singles, it is all the additional marital manna benefits given to married or coupled with and without children family units over the years that have continually increased the financial discrimination of singles.

Some of most money-enhancing benefits beginning in 1945 to present date are outlined below.

benefits over decades

The Family Allowance (currently called Canada Child Benefit) began in 1945 as Canada’s first universal welfare program.  Benefits were awarded without reference to the family’s income or assets – based on the idea that all Canadian children are worthy of public support.  Since the 1980s, however, such allowances have been increasingly targeted to low-and-middle-income families.  The Child Benefits program has gone through different variations over the years.  The amount is calculated each year based on family income and the number of children in the family under the age of 18.  Supplements are also available for handicapped children.  It is said that the incidence of child poverty in Canada is second highest among Western developed nations – second only to the USA. The Canada Child Benefit program is still based only on income, not assets and net worth.

The Registered Retirement Savings Plan (RRSP) was introduced in 1957 to encourage Canadians to provide for their own retirement.  They are intended to encourage private savings for retirement and thus contribute to the earnings-replacement objective. Money placed in RRSP account,, as well as investment earnings on the money are tax-deferred until withdrawn on retirement or earlier.  As well as RRSP account for individuals, there also can be a spousal RRSP which allows a higher earner, called a spousal contributor, to contributed 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 in retirement and, therefore, possibly pay less tax.

Maternity and Parental Benefits began in 1971 and are a part of the Employment Insurance program.  Parents must have contributed to EI program.   The basic rate of these EI benefits is 55% of average insurable weekly earnings up to a maximum of yearly amount of $50,800.  EI maternity benefits can be paid for a maximum of 15 weeks and EI parental benefits can be paid for a maximum of 35 weeks.  Some companies offer ‘top-up’ programs with increased benefits in amount of pay and length of payment. (Added August 21, 2016)

Child Rearing Drop-Out Benefit (CDRO) began in 1983.  This benefit allows parent to increase Canada Pension Plan (CPP) benefit if he/she stayed at home to take of children under the age of seven.  The period of time parent stayed at home can be excluded from the calculation of the CPP benefit so that CPP benefit is increased. The CDRO can only be used for months when Family Allowance Payments were received or Canada Child Benefits are eligible and earnings were lower because work was either stopped or there were fewer worked hours. (Added August 21, 2016)

The Registered Education Savings Plan (RESP) began in 1998.   From 1998 (the first year the program started) to 2006 inclusive the annual contribution limit was $4,000 and lifetime contribution limit $42,000 (including any contributions made prior to 1998).  From 2007 to present there is no annual contribution limit and the lifetime contribution limit is $50,000 (including all contributions made prior to 1998).  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.

Since 2007, Canadian spouses or common-law partners have been allowed to split the pension income one of the spouse receives between the two spouses.  This strategy allows the spouse who has the highest income to lower his tax payable by sharing up to 50 % of his pension income with his spouse.

The Tax Free Savings Account (TFSA) began in 2009.  The amount of $5,000 new contribution room (from after-tax income) was allowed for each year from 2009 to 2012. For the years 2012 and onwards, the amount is $5,500 per person. The maximum amounts for an individual for years 2009 to 2012 is $20,000 and for a couple in a married or coupled family unit it is $40,000.  From years 2013 to 2016, the maximum amounts for an individual are $22,000 and $44,000 for a married or coupled family unit.  For years 2009 to 2016, the maximum allowable amounts for an individual total $42,000 and for a married or coupled family unit comprised of two adults $84,000 (all tax free).

OAS is a federal social program designed to provide a very modest pension to low- and middle-income retirees.  In 2016 the OAS is $6,680 for single person and $13,760 for a couple. OAS clawback which began in 2011 does very little to clawback the income of wealthy persons.  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 thus allowing them to receive full OAS of $13,760 as a couple.  There are not many ever single seniors and early divorced in life 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.

Starting in January 2016, tax changes decreased income taxes (federal) for those making between $45,282 and $90,563 from 22 per cent to 20.5 per cent. It also increased taxes on those making above $200,000 from 29 per cent to 33 per cent.  The majority of ever singles and early divorced persons do not have incomes over $45,282 (statcan).  While middle class families with children get less of the Canada Child Benefits because they are based on income, this is offset with reduced income taxes.  So, who financially loses out yet again?-answer, singles.  (This paragraph was added on August 9, 2016).

Income splitting would have allowed couples with children younger than 18 to transfer up to $50,000 in income from the higher earner to the lower earner for tax purposes, for a benefit that will be capped at $2,000. It was to start with the 2014 tax year, but was eliminated by the Liberal government.

Other possible benefits on the federal level are too numerous to mention.  Married or coupled with children family units may also receive other top up benefits on the provincial level.

From the time a married or coupled with children family unit begins at marriage until death of one of the spouses, it is possible they will receive shower, wedding and baby gifts, maternity/paternity leaves, child benefits, TFSA benefits times two, RRSP benefits times two, reduced taxes, pension-splitting, and possible survivor pension benefits.  There also are probably a great number of years where they never pay full taxes while increasing their wealth.  Singles are not able to achieve these same level of benefits and tax relief.

SOLUTION

To bring some sort of sanity to all the benefits upon benefits upon benefits that married or coupled family units receive, for starters it would be prudent for politicians and government to apply square root equivalence scales (finances) to any and all benefits, past and future.  An example when implementing benefits would be to apply a square root equivalence value of 1.0 for a single person family unit and a value of 1.4 for a married or coupled without children family unit.

CONCLUSION

As shown above benefits have been given to married or coupled persons with children family units for seventy five years and have not been as kind to singles.  The majority of the benefits have been implemented by the Federal Conservative party in the last decade and continue to be perpetuated by the Liberal party.  Ever singles and early divorced singles without children have not received the same level of benefits (single parents with children do receive some benefits, but these still are not at the same level as married or coupled family units, for example, pension splitting and spousal RRSPs).  There is no issue with providing support to poor and low income family units with children. However, singles should take great issue with benefits being given to family units with children without taking into consideration income as well as net worth and assets so that they can increase their wealth from these benefits.  Also, there should be great issue with poor and low income singles not receiving same level of assistance.

As stated in a previous post (decades), how many more decades is it going to take before singles are equally included in financial formulas as married or coupled family units? When is the financial discrimination of singles going to end?  This is not just a Canadian problem, but a worldwide problem.  Singles need to speak out about financial discrimination.

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

SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

SINGLES NEED TO LEARN HOW TO ARTICULATE FINANCIAL DISCRIMINATION OF SINGLES

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

In last post of July 25, 2016 (program) it was shown how the new Canada Child Benefit program is a source of discontent for families and how financial discrimination of singles continues.

This post also showed how singles feel they have been left out of the financial process and how most families will bash singles whenever they express despair about this fact. (Ever singles and early divorced singles without children are made to help pay for Canada Child Benefit while families with high net worth are still able to profit from the Child Benefit and other benefits).

As has been stated many times by this blog author, families will talk about about how their ‘hearts are eternally and inexplicably changed’ when bearing their children, but same hearts appear to become ‘hearts of stone’ in financial matters when these same children become adult singles, low income or no income persons and families.  These disadvantaged persons are tossed out or are made to be less important in financial formulas and decision-making processes.  It is like families become financially dissociated or detached from their children, siblings and relatives that are single without children. Singles are made invisible and excluded from financial formulas by families, politicians and governments.

In last post comments from singles on the Canada Child Benefit were itemized.  The one common theme running through all these comments is the dissatisfaction with financial discrimination, but no articulation of what needs to change.  When singles are commenting online or by other means, comments without substantiation will just produce more financial bashing of singles.

SINGLES NEED TO LEARN HOW TO ARTICULATE HOW THEY ARE BEING FINANCIALLY DISCRIMINATED AGAINST BY:

Educate, educate, educate while stating facts– It is a sad fact that most families, businesses, financial gurus, politicians and government  will not have a clue about what singles are talking about when it comes to financial discrimination.  Most will get that glazed look in their eyes and state it costs less for singles to live and children are more important. And unfortunately, the education of others will have to occur over and over again until there is maybe one fact that will stick to achieve an ‘ah, ha’ moment.  Also, singles will need to be prepared for anger, defensiveness and a whole range of other negative emotions from people they are trying to educate.

Show examples – This cannot be stressed enough.  It is often the examples that will produce understanding of the financial discrimination of singles.  For example:

 show copy of ‘Six Reasons Why Married or Coupled Persons Able to Achieve More Financial Power (Wealth) than Single Persons’ (six-reasons)

—show an outline of your budget

—give copies of articles that show how much it costs singles to live

 show examples of how financially privileged families are becoming with benefits like the Child Benefit program (tax-credits)

 show examples of how financially privileged families have become with the benefits upon benefits they receive.  (An example of benefits upon benefits is this statement:  From time couple with children is married to time one spouse dies couple will have possibly received shower, wedding, baby gifts, paid maternity/paternity leave, child benefits, TFSA/RRSP benefits times two, RESP grants, reduced taxes, pension-splitting and possible survivor death benefits. Singles get none of these benefits while supporting families through payment of taxes to support these benefits-show this statement when talking about financial privilege of families).

 show visual examples of graphs, pictures, etc. that give information on all the benefits that one family unit will receive over the family unit comprised of single persons, for example, financial silos (financial-illiteracy)

 show statistics from studies like ‘Living wage for Guelph and Wellington 2013 (Report) that itemize what it costs a single person to stay off the streets.

—become knowledgeable about different levels of status of singles (marital status).  For example, rebuttals will often state singles are included in financial formulas, when in fact, the only singles more likely to be included are single parents and widowed persons. (Updated August 7, 2016)

 Provide solutions – Provide solutions to financial decision makers, one example is to use cost of living equivalence standards (singles) for financial formulas.  It is a false statement to say that cost of living for a single person is one half of a married or coupled family unit of two. Rather, some statistics show cost of living for family unit of a single person is approximately 70% of a married or coupled family unit of two.  Singles deserve equal representation in financial formulas according to what it costs them to live.

– Spread the word – Tell other singles about financial discrimination, and above all, lobby all decision makers (families, businesses, politicians and government) about inclusion of singles in financial formulas.

– Get out and vote!  All financial lives matter.  Stop the financial discrimination of singles!

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

THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

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

Ivanka Trump in her speech yesterday at the Republican Convention stated that something needs to be done about single women without children being paid more than married women with children.

Some studies also show that women under the age of thirty make more than men and some studies show that employers don’t want to hire married women with children.

There also has been a lot said about women being paid less than men for the same job, married men being paid more than single men.  There is no doubt that there should equal pay for equal work.

Three different sources are outlined below showing the controversy generated by the facts and whether the fact are really true.

From “Workplace Salaries:  At Last, Women on top”, Time magazine, September 1, 2010 (time):

There has been recent evidence in the USA in many of the largest cities that the median income salaries of young women are 8% higher (and in some cases even higher) than men in their peer group.  However, this gap does not apply to rural areas and disappears for older women, married women and women with children.

However, there also are many factors where perception is false because all the facts have not been taken into consideration.  Some of these facts are:

  • Education.  Women are outpacing men in obtaining degrees.
  • Knowledge-based industries.  Larger cities which tend to have knowledge-based industries will have higher pay.  The decline of a manufacturing base in cities may result in lower wages.
  • Minorities.  Hispanic and black women are twice as likely to graduate from college as male peers.

“The holdout cities — those where the earnings of single, college-educated young women still lag men’s — tended to be built around industries that are heavily male-dominated, such as software development or military-technology contracting. In other words, Silicon Valley could also be called Gender Gap Gully.

As for the somewhat depressing caveat that the findings held true only for women who were childless and single: it’s not their marital status that puts the squeeze on their income. Rather, highly educated women tend to marry and have children later. Thus the women who earn the most in their 20s are usually single and childless”.

From “Fact Check:  Do young, childless women earn more than men?”, September 10, 2014 (abc)states:  data does not hold up because median figures don’t compare people who have the same jobs and qualifications.  They are an aggregate of the salaries of all people in a particular cohort; therefore, figures are misleading.

From “Childless Women in their twenties out-earn men.  So?”, Matthew Rouso, February 24, 2014, Forbes (forbes) :

“Statistics show only the average difference between men and women, across all jobs.  It doesn’t control for the types of job, the number of hours worked or for time taken off (to raise children, for example)….There are differences in job types, education levels, hours worked, and other factors that lead to these wage differentials.  But these factors are just as responsible for the overall difference in wages between men and women.  Once you control for factors such as college major, time off of the labor force to raise children, and hours worked per week, the gender wage gap essentially disappears.  A big part of the difference in pay is due to the choice of jobs:  women choose to enter career fields that pay less than those that men choose.   Women are still more like to be Kindergarten teachers while men are more likely to work in finance.  In short, firms aren’t discriminating against women. The reality remains that women, on average, do earn less than men.  But to blame it on discrimination is misguided.

Solutions to the gender wage gap aren’t simple.  Taking time off from a job, or working fewer hours, will reduce one’s earning potential, but many people (rightly) relish the opportunity to take time off to raise children.  There are no easy policy recommendations to deal with the loss of earning power for those who take time off to raise children.  But there is one thing we can do that would decrease the gender wage gap with no negative consequences: ensure that women are encouraged to pursue work in high-paying industries….Women may earn less than men, but causes are more complex than the cries of discrimination we hear from politicians.  When politicians mislead the public on this issue, the consequence is our delay in solving the real problem”.

Comment on Ivanka Trump’s statement:  It is difficult to find the source of her information.  Whatever the source is, what is more disturbing is the continuous reference by politicians and business people to marital status when human rights policies specifically state marital status should not be used in employment.  If Ivanka Trump wants to deal with married women’s pay, then she should address all other employment discrimination such as married men being paid more than single men.

TAX REFORM:  DONALD J. TRUMP FOR PRESIDENT (donaldjtrump)

Donald Trump as part of his bid for President platform has outlined his suggestion for tax reform.  A direct quote from his reform states:

“If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls…..All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.”

Comment of Donald Trump’s Tax Reform:  Here we go again, past posts have shown that cost of living is higher for a single person family unit than a married or coupled family unit without children.  This once again shows the financial illiteracy and ignorance regarding singles’ finances by politicians and business persons.  We do not know all the details of American tax system, but Trump cannot just give a figure for singles, and then multiply it by two for married or coupled family units.  Finances for singles don’t work that way.  The cost of living for a single person is higher than the cost of living for a family unit of two married or coupled persons, so why should married/coupled family units get the benefit of double tax free income?  Marriage penalty???  What about all the marriage benefits that married or coupled family units receive?  He also includes a separate column for head of household in his four tax brackets.  There is no explanation of what head of household includes, so it is difficult to know what this tax group is all about.

Financial discrimination will continue if singles figures are just multiplied by two to arrive at married family unit figures.  When, when are politicians and businessmen going to drop the marital status designation and use family units as the designated standard? Why can’t tax reform be more progressive instead of using same old financially discriminatory practices?

Cost of living equivalence scales such as the square root equivalence scale show that if a value of ‘1’ is used for a single person family unit, then the value of ‘1.4’ is applied to two adults, ‘1.7’ is used for two adults one child, ‘2.0’ is used for two adults two children and ‘2.2’ is used for two adults three children.

CONCLUSION

It is pathetic that marital status continues to be used a standard for tax, hiring and income policies when this is a direct violation of human right and civil rights.  It is absurd how married or coupled family units (including the Trumps) continue to protect their own interests without including all family members in financial formulas and favouring married family units over single person family units.

Ivanka Trump says married women are being paid less than single woman.  If one considers that most of management and business persons who do the hiring and determine the income schedules are married, then married people are the ones guilty of committing the wrongful acts against themselves, so don’t go blaming singles for this! There are many who do not like unions, but at least they pay the same wage for the same work without inclusion of marital and sex status.

Married and coupled women with children want it all.  They want employment time off for their children and then want full compensation even for the years they haven’t been working. If married women take time off to be with their children, they are not going to have the same level of work experience as a single person who has continuously been employed. When are married and coupled women ever going to realize that they can’t have it all while taking singles down to a standard of living that is lower than theirs?

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

FINANCIAL POST PERSONAL AND FAMILY FINANCIAL PROFILES STAR RATINGS-Part 1 of 2

FINANCIAL POST PERSONAL AND FAMILY FINANCIAL PROFILES STAR RATINGS-Part 1 of 2

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

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

(Andrew Allentuck from the Financial Post oversees the personal and family finance profile evaluations.  Anyone can submit their financial profile to the Financial Post for analysis by a financial planner.  Some of these cases have been used in this blog as in last post.  It is helpful to know the background behind these financial analyses).

Star ranking system as stated by Allentuck is as follows (top rating is five stars):

Financial Post, December 21, 2013 “HOW MANY STARS DOES YOUR RETIREMENT DESERVE?” (financialpost)

*One star means the potential retiree is in a troublesome place.  Few people who write to Family Finance are in the level at which there is no way to sustain a way of life without such major transformations as selling a home to raise cash, working to age 68, 70, or even 72 or telling children for whom money has not been set aside for post secondary education that they will have to finance it on their own.

In this category are people with business failures from which they have not recovered, low paying jobs, and modest savings.  Some one star cases involve what may be called “elective poverty”. The result is that the individual will have no hope of maintaining the present, rather modest standard of living.

Blog Author’s comment:  That ‘few people who  write to Family Finance are in this level’ explains why there are so few singles without children in these profiles.   Many singles and the poor fall into this category.  They are often told they cannot afford to buy a house and put money into savings.  They can only do one or the other, not both at the same time. Singles are often told they have to work longer than married or coupled person families to achieve a decent retirement lifestyle.  Many families with children seem to  make bad financial choices like putting their boys into hockey or going on yearly family vacations instead of, for example, maxing out RESP contributions to get the government grant.

**Two stars means that present savings and pensions will be insufficient to maintain a desired way of life, but that with time, perhaps restructuring of debt to eliminate loans with double digit interest rates, perhaps sale of a cottage and downsizing to one car, a retirement plan will be reworkable.  Some Family Finance cases get two stars as a result of divorce splitting assets that would have been adequate for two people sharing expenses but that are inadequate when savings have to support two  homes and when, as a result of loss of spouse, pension splitting is no longer possible.

Blog Author’s comment:  For singles and the poor the sale of a cottage is out of the question because they have no cottage to sell.  Straight from a financial person’s mouth – some profiles ‘get two stars as a result of divorce splitting assets that would have been adequate for two people sharing expenses but that are inadequate’ to support an individual and pension splitting is no longer possible.  This blog has stated over and over again that married/coupled family units require less money to live and pension splitting is financially discriminatory to singles and poor.  Singles are not able to pension split and poor families receive less value from pension splitting than wealthy married or coupled persons.  Many singles and poor families get two stars simply because they are financially discriminated against by not receiving equal benefits to wealthy married or coupled family units.

***Three stars means that a person or couple is on track for retirement as planned.  Debts may have to be reduced or a job stretched for a few more years, but time will be an ally.  A modest rate of return on conservatively invested assets and continuing or perhaps increased savings rate will achieve sufficient capital to produce investment income, perhaps bolstered by expected benefits from government and private pension plans.  At this level, it may be necessary to trim expenses to raise the rate of savings, but the machinery for a satisfactory retirement is in place.  It may be useful to suspend savings to pay down debt, then, when money is no longer draining to pay interest, to  restore savings and add what has been spent on debt service to retirement savings.  This financial engineering works on a solid foundation for asset growth.  Most Family Finance cases get this average but satisfactory rating.

****Four stars means a retirement plan is well conceived and that restructuring of savings or assets or lowering of expectations will not be needed.  There may be a need to reduce the costs of generating income, for example, by shifting from mutual funds with high fees to exchange trade funds with low fees.  This level is an adjustment process, not a restructuring of personal finances.  Many people with defined benefit pensions get four stars.  Their pensions are managed by experts, the management fees they pay are low and payments are guaranteed no matter what happens, for investment risk is borne by managers, not beneficiaries.

Blog Author’s comment:  Regarding statement ‘many people with defined benefit pensions get four stars’, benefits received from defined benefit pensions depend on how many years employee has contributed to the pension plan.  A few years of contributions will yield a very small pension.  Also, married or coupled person family units fail to realize that singles get less from defined benefit pensions because they have to pay more taxes on their pensions and cannot pension split.  Defined benefit pensions are inherently financially discriminatory to singles because survivors of the spouses get survivor benefits, but survivors have not contributed to the plan.  When spouse of plan deceases then whatever is remaining should be willed to the surviving spouse, just as single’s remaining benefits are willed to his or her estate.  Surviving spouse should treated equally to a single, after all, they are now ‘single’.

*****Five stars means that the person or couple will have sufficient income for living as planned.  If nothing changes, the plan will work and sustain income at the required level.  The five star evaluation is, in a sense, a level at which people with average jobs will not have suffered such crises as asset division in divorce, major investment loss or ill health forcing premature retirement.  Structurally, at the five star level, retirement income source are diversified with substantial pensions and a clutch of investments to provide discretionary income.  Most people with five stars have defined benefit pension plans and almost all have two breadwinners.

Blog Author comment:  It seems most profiles presented in the Financial Post do not achieve five star status even with a million dollars or more in assets.  Again from financial person’s mouth, in regards to two breadwinners, it is almost inherently impossible to a singles to achieve same financial retirement wealth as married/coupled persons unless they ‘work themselves to death’ with addition of part time or full time job in addition to regular job.  Many single parents are forced to work more than one job to make financial ends meet.

Allentuck provides the following methodology for rating retirement readiness:

  • Savings rate:  if savings are 10% or more of disposable income, score 1 point, if 20%, 2 points, if 30% 3 points, etc.  If less than 10% of disposable income, then no stars.

  • If job has a defined benefit pension, add 3 points.  If indexed plan, add 1 more point.

  • If there are no significant debts other than credit card charges paid each month, add 2 points.  If debt service costs are 20% or more of take home income, take off 1 point, if 20% of take home income, take of 2 points, etc.

  • If spouse can split eligible pension income, add 1 point.  If no spouse to split, take off 1 point.

  • If you have ten or more years to retirement add 2 points.  If less than 10 years, add 1 point.  If retired, 0 points.

  • If total investments both registered and non-registered less debts equal 20 or more times estimated annual pre-tax retirement income, add 5 points.  If 15 times estimated retirement income, add 4 points.  If 10 times, add 3 points.  If less than ten times estimated retirement income to two times retirement income, there are no points.  If negative net worth, deduct 5 points.

  • If total after tax retirement income is 120% of estimated retirement expenses, add 2 points, if 100% of retirement income, add 1 point.  If 90%  of retirement income, take off 1 point for each 10% it is less than estimated retirement expenses.

  • TOTAL:  If you have 10 points or more, you would probably get 5 stars.

Blog Author’s comment:  The five star rating and point system is interesting and does provide value in determining retirement readiness.  It also shows some of financial discriminatory aspects that governments perpetuate against singles and poor families. The system also continues to hide salient details as to why singles and the poor face financial discrimination and are unable to attain same financial power and wealth as married or coupled family units.

Savings rate:  Only the wealthy will receive top points because they have the most disposable income.  Defined pension benefits:  Benefits received depends on how many years of contribution there were and, as stated above, pension plans are inherently financially discriminatory to singles and the poor.  Three points will have more value to a married or coupled family unit  than they will to singles because of this discrimination.  Pension splitting:  Straight from financial person’s mouth, pension splitting is financially beneficial to married or coupled family units.  Singles will never get this point and, in fact, will lose one point because there is no spouse to split pension income with.  Total Investments:  The wealthy and married or coupled family units generally will have been able to accumulate more investments than singles and the poor; therefore, they will get more points in this rating system.  Total after-tax retirement income:  It is interesting to note many of the married or coupled family units profiled in the Financial Post cases will have even more retirement income with less expenses than while earning income and raising children.  This is because they are able to accumulate more wealth and have received many government benefits, so they will receive more points.

It is ironic that singles most likely are inherently excluded from receiving  a total of five stars because they receive less value from their defined benefits pensions and can never get the one point for pension income splitting and actually have to take off one point.  As stated those most likely to receive five stars have two breadwinners as opposed to one.

Financial Post, December 26, 2012 “THE MAKING OF FAMILY FINANCE” (financialpost)

QUOTE:  ‘The question is a common thread in our email messages and Web comments:  Why don’t you look for real problems of lower-income people who really need free financial advice?  For the record, the after-tax income of about 50% of those who ask for our help is in the range of $58,000 to $65,000 for families with two parents working and $45,000 to $55,000 for single people seeking our help.  About 30% have incomes between $100,000 and $200,000 a  year.

We hear from a few people, about 5% of inquiries, with incomes over $200,000.  And 15% have incomes below $35,000 a year.  So the vast majority of the 40 inquiries or so we receive every week fall between $58,500 and $200,000 a year.

We take on few cases of folks with incomes over $200,000 since, at that level, people can afford accountant and portfolio managers.

Those on the lower end of the scale also often fall off before reaching the final stages of our analysis because for many there is just no constructive advice on debt management and investment solutions to be offered.  When money is so tight, there is little room for creativity and finessing financial plans.’

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

BOUTIQUE TAX CREDITS INCONSISTENT AND FINANCIALLY DISCRIMINATING (Part 2 of 2)

BOUTIQUE TAX CREDITS INCONSISTENT AND FINANCIALLY DISCRIMINATING (Part 2 of 2)

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

(The following information is taken from:  Policy Forum: The Case Against Boutique Tax Credits and Similar Tax Expenditures by Neil Brooks (brooks) (abstractwhich show SELECTED TAX EXPENDITURES INTRODUCED OR SUBSTANTIALLY AMENDED FROM 2006 TO 2015 (page 129).  His article states:  

The table that follows lists selected tax expenditures introduced or substantially amended by the Conservative government between 2006 and 2015. These tax expenditures are listed under the headings and in the order shown in the Department of Finance’s Tax Expenditures and Evaluations 2014. To provide some context, a few of the listings have a brief introduction. The year in parentheses following the listing is the year the measure was introduced or enriched. The projected cost for 2014 of new and amended tax expenditures is then given, if it was provided in that year’s tax expenditures and evaluations report.

Where the tax expenditure takes the form of a tax credit, the table indicates the amount of the credit. The actual value of the credit to the taxpayer is almost always 15 percent (the lowest federal tax rate in 2015) of the amount claimed by the taxpayer.  For example, although the maximum amount of the children’s fitness tax credit was increased to $1,000 in 2015, the maximum federal tax saving to the taxpayer is $150 ($1,000 × 0.15).

Some of the costs to the government as outlined in the Brooks article for the Selected Boutique Tax Credit Benefits are as follows:  charitable donation benefits and exemption of capital gains $265 million from 2017 to 2020,  first time donor’s super credit $7 million, children’s arts tax credit $42 million, textbook tax credit for post-secondary education and certified occupational training $34 million-amount claimed by students (not transferred to parents), post-secondary scholarships, fellowships, and bursaries exempt from tax $45 million, Canada employment tax credit $2.145 billion, volunteer firefighters tax credit $17 million, search and rescue volunteers tax credit $4 million, family caregiver tax credit $65 million, age tax credit $2.955 billion 2009 (parliamentary budget officer estimates that the two increases in the age credit since 2006 will have a fiscal impact of $950 million in 2014), registered disability saving plan $8 million, pension income tax credit $1.12 billion, changes to registered retirement savings plans and registered retirement income funds $670 million from 2016 to 2020, first-time home buyer’s tax credit $110 million, home renovation tax credit $2.265 billion in 2009), public transit tax credit $190 million.

(It should be noted that some of these have changed or been deleted since the Liberal party won the 2015 election).

Table – page 1 of 4

boutique tax credit 5

Table – page 2 of 4

boutique tax credit 6

Table – page 3 of 4

boutique tax credit 7

Table – page 4 of 4

boutique tax credit 8

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