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.)

‘EMPTY HOUSE SPECULATOR’ SYNDROME EQUALS THEFT AND UNETHICAL INVESTING

‘EMPTY HOUSE SPECULATOR’ SYNDROME EQUALS THEFT AND UNETHICAL INVESTING

(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.) Post updated June 28, 2017.

Garry Marr’s Financial Post May 8, 2017 article “Spectre of empty houses haunts Canada’s two most expensive housing markets” (expensive) states that in Toronto ‘some believe vacant homes exist on a widespread basis, bought up by a stream of investors so consumed by speculation – or just a safe place to park their money – that they can’t even bother to rent out their properties in markets where the going rate can easily top $3 per square foot…..data seems to indicate there were as ‘many as 66,000 vacant units in Toronto in 2016 equivalent to 5.6 per cent of the city’s total stock of 1.2 million private dwelling units’.  If one calculates this based on a family of four one could guess that about 16,500 families are missing out on Toronto housing.  But wait, the article goes on to say that of the empty homes, 90 per cent are condos or apartments. If condos and apartments are more likely to be bought/rented by singles and poor families, then this would mean singles and poor families are more likely to be hurt by the empty units and Toronto housing crises.

Matt Levin’s Los Angeles Daily News May 13, 2017  ‘Amid state housing crisis, why 2 out of 5 millennials still live at home’ (millennials) article states ‘State lawmakers have introduced more than 130 bills this legislative session to try to solve California’s housing affordability crisis, proposing everything from 150 square-foot apartments to a $3 billion affordable housing bond’.  ‘Nearly a decade removed from the depths of the Great Recession, a staggering 38 percent of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data. That’s roughly 3.6 million people stuck at home.  If “unlaunched” California millennials formed their own state, they would be entitled to more electoral votes than Connecticut, Iowa or Utah.  If they formed their own city, it would be the third largest in the country’.  California’s population is slightly larger than Canada’s population.

‘Huge demand for tiny rental units in Vancouver’, by Bruce Constatineau in 2014 (rental) talks about  a 100-square-foot unit for $570 a month and there’s a waiting list of people wanting to rent other units when they become available.  In another development there are units as small as 90 square feet where each unit contains a tiny sink and fridge (no cooking facilities and windows?).. Renters in the 50 units share 11 bathrooms, and there are laundry facilities on each of the four floors.  Apparently  the mini-sized apartments attract a wide range of renters — from ages 19 to 56 — who want to live on their own with a downtown Vancouver address.  Budget-minded renters…..can find similar-sized or even smaller cubbyholes downtown for anywhere between $400 and $600 a month.  It is further stated than In order to make them affordable, they need to be very small, condensed units with shared washrooms. That’s just a fact of life.  Really?  The pictures of these units speak a thousand words.

Edmonton, Alberta is also considering construction of 100 square foot units.

Empty house speculator syndrome is equivalent to unethical investing and theft since the empty units have been taken off the market and are not available for occupancy.  Ethical investing excludes chocolate companies that use child labor. Children are taught it is wrong to ‘take candy from babies’, shoplifters are jailed for minor thefts and yet it appears to be okay for speculators to ‘steal’ housing all within legal limits of the law.  The present housing market is based on greed.  Greed begets greed and greed trumps family values.  In housing singles are worth less than other members of the family unit.  The bar has now been reset to a new low where it is okay for them to live in spaces equivalent in size to two jail cells (average jail cell is 45 square feet and provides ‘free’ accommodation and meals, but you can’t leave).

The complete disregard of the housing crisis is heightened by Dr. Ben Carson, head of the Department of Housing and Urban Development USA, who states poverty is a “state of mind” and Trumpian politics which rob the poor to pay the rich.  Liberals and Conservatives in Canada are no different.  The housing crisis is not a “state of mind”, but rather has been brought on by inadequate rules and regulations on housing, failure to increase the minimum wage to a living wage and the upper middle classes and wealthy paying less and getting more for housing and tax loopholes.

Housing is a basic human right as determined internationally in the “Universal International Declaration of Human Rights” and “International Covenant on Economic, Social and Cultural Rights” and is one of the principles of Maslow’s Hierarchy of need. In Canada there appears to be no shame in robbing singles, poor families and indigenous people of their housing.  Housing investors, politicians and families need to take a look in the mirror and reset their moral and ethical compasses to ‘true North’ re housing crisis.

LESSONS THAT SHOULD/COULD BE LEARNED

Where are the parents of millennials?  How can they allow the housing crisis and their children to be housed in 90 square foot units and smaller?  Where are the family values for housing?

Where are the governments, politicians and city counsels that have allowed the housing crisis to take over and last so long?  Where are the rules and regulations to prevent the building of ridiculously small units with price gouging rents?

Why do singles, who are more likely to live in small spaces, always have to pay more per square foot, sometimes outrageously so ($570 for 100 square foot unit)?  The upside-down pricing of housing (affordable-housing) where the smaller the space, the higher the price is per square foot needs to stop.  Doubling the price on rent equals pure greed and unethical investing.  Why do the upper middle class and wealthy pay so much less per square foot for their housing?  The estimate for the amount of house taxes, etc. that is collected by not making the wealthy pay their fair share per square foot must be astounding.

How do occupants of these small spaces learn life lessons, such as cooking for themselves, buying food and managing finances?

The minimum wage needs to be raised to an indexed living wage (cause-and-effect-of-financial-policies).  Building affordable housing will not solve the problem if the minimum wage is not raised.

Humane principles-there are many humane associations and principles related to animals, so where are the humane principles for humans re housing – 100 sq. ft. at $570 rent is not humane.

Where are the rules and regulations on how small a space can be developed, such as a minimum of 350 square feet, so at least there can be a bathroom and cooking facilities within the unit?  Surely, there must be point where it is is not financially feasible for developers to develop small units with minimum square footage in relation to the cost of building the unit and also provides dignity to occupants of these units.

Alberta Health Minimum Housing and Health Standards (Housing-Minimum) – the following condensed excerpt provides information on some Alberta standards for housing.

Space for Sleeping purposes (overcrowding): The owner of a housing premises shall not permit it to become or remain overcrowded. (a) A housing premises shall be deemed to be overcrowded if: (i) a bedroom in it has less than 3m2 (32ft2)of total floor area and 5.6m3 (197ft3) of air space for each adult sleeping in the bedroom, (ii) in the case of a dormitory, the sleeping area in the dormitory has less than 4.6m2 (49.5ft2) of floor space and 8.5 m3 (300ft3) of air space for each adult sleeping in the sleeping area, or (iii) a habitable room in it that is not a bedroom but is used for sleeping purposes in combination with any other use has less than 9.5m2 (102ft2) of floor space and 21.4m3 (756ft3) of air space for each adult sleeping in the habitable room. (b) For the purposes of calculating this section, a person who is more than 1 year of age but not more than 10 years of age shall be considered as a July 20, 1999 9 Revised June 30, 2012 Alberta Health Minimum Housing and Health Standards © 1999–2012 Government of Alberta 1/2(one half) adult and a person who is more than 10 years of age shall be considered as 1 adult; (c) This section does not apply to a hotel/motel.

Food Preparation Facilities:  (a) Every housing premises shall be provided with a food preparation area, which includes: (i) a kitchen sink that is supplied with potable hot and cold water and suitably sized to allow preparation of food, washing utensils and any other cleaning operation; and (ii) cupboards or other facilities suitable for the storage of food; and (iii) a counter or table used for food preparation which shall be of sound construction and furnished with surfaces that are easily cleaned; and (iv) a stove and a refrigerator that are maintained in a safe and proper operating condition. The refrigerator shall be capable of maintaining a temperature of 4 degrees C. (400F). (b) Shared Kitchen Facilities Occupants of a housing premises with more than one dwelling may share food preparation facilities provided that: (i) the food preparation facilities are located in a common kitchen room, (ii) the occupants have access to the common kitchen room from a public corridor without going outside the building, (iii) the common kitchen room is located on the same floor as, or on the next storey up or down from the floor on which the dwelling unit is located, July 20, 1999 10 Revised June 30, 2012 Alberta Health Minimum Housing and Health Standards © 1999–2012 Government of Alberta (iv) the food preparation facilities shall not serve more than eight persons, and (v) the refrigerator shall provide a minimum volume of two cubic feet of storage for each intended occupant.

Washroom Facilities:  Except where exempt by regulation, every housing premises shall be provided with plumbing fixtures of an approved type consisting of at least a flush toilet, a wash basin, and a bathtub or shower. (a) The washbasins and bathtub or shower shall be supplied with potable hot and cold running water. (b) The wash basin should be in the same room as the flush toilet or in close proximity to the door leading directly into the room containing the flush toilet. (c) All rooms containing a flush toilet and/or bathtub or shower shall be provided with natural or mechanical ventilation. Shared Washrooms (d) Occupants of a housing premises with more than one dwelling unit may share a flush toilet, wash basin and bathtub or shower provided that: (i) the occupants have access to the washroom facility without going through another dwelling or outside of the building; and (ii) the facility is located on the same floor as, or on the next storey up or down from the floor on which the suite is located; and (iii) each group of plumbing fixtures (toilet, washbasin, bathtub or shower) shall not serve more than eight persons.

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

HOMELESSNESS IN CANADA BIGGER PROBLEM FOR SINGLES AND POOR SINGLE PARENT FAMILIES

HOMELESSNESS IN CANADA BIGGER PROBLEM FOR SINGLES AND POOR SINGLE PARENT FAMILIES

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

(The author of this blog applauds Ron Kneebone and Margarita Wilkins for their study on homelessness for single employables in this country.  Words in italics are the words of the author of this blog.  Caveat: While we don’t agree with everything that comes out of Schools of Public Policy, we agree with the premise of this study, that is, single employables (singles and single parents) are having a very difficult time surviving on low wages and lack of affordable housing.)

The following excerpts are taken from “Shrinking the need for homeless shelter spaces” (policthat is, yschool.ucalgary.ca) by Ron Kneebone and Margarita Wilkins from the University of Calgary School of Public Policy and the opinion letter “The secrets of reducing homelessness” (calgaryherald) by Ron  Kneebone also refers to this study.

‘In 2009, an estimated 147,000 people, or about one in 230 Canadians, stayed in an emergency homeless shelter.

….The chronically homeless, whether for long periods or with repeated episodes, are a minority (one-third due to personal challenges (sic such as alcoholism and drug addiction) not immediately associated with the economic conditions of the city in which they live) of those experiencing homelessness.  An implication is that the majority of emergency shelter beds are provided to meet the needs of people who experience homelessness for short and infrequent periods and do so as a result of poverty.  The remaining two-thirds of shelter beds are filled by people who make relatively infrequent use of shelters and are more likely forced into shelters by economic conditions….

A role is also possibly played by discrimination in the housing market; discrimination that leaves some people with no option but to use a shelter and for social agencies to provide for them.

But our main focus was on housing affordability. We found that cities where the income support provided by the provincial social assistance system to a single person was small relative to rent — that is, in cities where housing was expensive for a very poor person — social agencies found it necessary to provide more emergency shelter beds.

The policy implications of this result are clear; increase the affordability of housing to very poor people and the need for emergency shelter spaces will fall. There are a number of ways of accomplishing this goal and it would likely be wise to act on all of these policy fronts…

We show that providing a relatively small income increase — just $1,500 per year — to single people on social assistance would enable the closing of about 20 per cent of emergency shelter beds.

Attacking housing affordability from the other side, by reducing housing costs, would also be effective. There are many options available here, from increased rent supplements to tax and regulatory changes that enable housing to be built that is affordable to those with low incomes….

  Policy-makers need not focus too narrowly on just a few policy responses, and need not rely solely on publicly funded construction of low-income housing.  Many, more subtle, adjustments to policy levers can have equally important influences on the housing market and hence homelessness….

…We continue to be perplexed why governments fail to index for inflation the income support provided to those in poverty….

…two broad sets of policy responses are possible, those aimed at treating causes of homelessness closely tied to individual circumstances and those aimed at treating causes of homelessness related to housing market conditions….

…The theoretical connection between homelessness and housing market conditions is straightforward:  even if one can pay for the minimum quality of housing available in a city, if there is little income left over for other of life’s necessities (food, clothing, etc.) one might rationally choose to forgo conventional housing and try one’s luck doubling up with relatives or friends, or temporarily using a city’s shelter system.  Thus, to the extent that minimum-quality housing is priced such that it would consume an extremely high proportion of one’s income, a person may become homeless….

….Rapid population growth and strong labour markets (sic such as occurred in cities like Vancouver, Toronto, and Calgary) influence prices by increasing the demand for housing. For those unable to benefit from strong economic growth, housing costs can quickly rise out of reach. Changes in income distribution may also play a role as the types of housing available in a city with income skewed toward the high end will differ from housing options available in a city with income skewed in the other direction.

Public policy choices can also be expected to influence the affordability of housing.  Interest rates and tax policies influence the housing market by affecting new construction costs, the costs of rehabilitating old buildings, and the costs of maintenance and building abandonment….

…Report by TD Economics. (Affordable Housing in Canada):  Using data from 2002, the report provides information that allows one to identify what percentage of the total cost of building a modest rental apartment is due to local infrastructure charges, application fees and building permits. These local charges ranged from a low of 1.7 per cent of total cost in Montreal to a high of 11 per cent in Ottawa. In a study using U.S. data, Stephen Malpezzi and Richard Green show that moving from a relatively unregulated to a heavily regulated metropolitan area increases rents among the lowest-income renters by one-fifth and increases home values for the lowest quality single family homes by more than three-fifths. The largest price effects of such regulations occur at the bottom of the distribution in units that are disproportionately occupied by low- and moderate-income households….

…The influence seems to be large; providing an additional 100 rent-assisted units has been shown to reduce by four the number of people experiencing homelessness (from How to House the Homeless)….’

When conducting the study, Kneebone and Wilkins used the following variables:

‘….Our dependent variable is the number of emergency shelter beds (Beds) provided in each city as a fraction of that city’s total adult population (Pop). Our key policy-sensitive determinant of that dependent variable is a measure of housing affordability, the ratio of a relevant income measure to a relevant measure of housing cost….

…Our measure of income is the amount of social assistance income provided to a person defined in provincial social assistance programs as a single employable (Income). A person classified in this way is single and without an impediment to employment that is recognized by the provincial social assistance program. Our measure of housing cost is based on the average amount paid on a one-bedroom rental unit (Rent).

We use as our measure of income the aforementioned amount of social assistance paid to a single employable for three reasons.   First, the vast majority of homeless shelter users are single. Second, people most likely to experience homelessness are mainly, as emphasized by Burt et al.,  the “poorest of the poor.” At an average annual income of about $7,500 (our data are for 2011 and vary by province), social assistance is the income of last resort for a single person deemed healthy enough to find employment. Finally, our focus is on identifying public policies that might influence the perceived need to provide emergency shelter beds.  One possibly important policy lever is government-provided income support to the income-demographic group most likely to use emergency shelters….

…The estimated coefficient on our measure of housing affordability indicates that a one per cent increase in the ratio of social assistance income to rent is associated with a 1.15 per cent reduction in the ratio of shelter beds to adult population. An implication of this sensitivity is that increasing the annual amount of social assistance provided to a person identified as a single employable by $1,500 per year would, by increasing the ratio of income to rent, enable social agencies to close a total of 2,599 shelter beds across Canada, a reduction of 18 per cent….

An alternative policy – or perhaps one to be introduced in conjunction with the increase in income – would be to increase the size of the rent subsidy available to those with low Income.  Our results suggest that increasing rent subsidies by $100 per month would be sufficient to enable providers to close 2,975 shelter beds across Canada. Our two policy options therefore have similar effects.

DISCUSSION Our calculations suggest the potential efficacy of an approach that favours what might be broadly described as a market solution to shrinking the need for emergency shelter beds.  This is particularly so with respect to our suggestion to provide the very poor with a higher level of income support and allow them to purchase goods and services through the market.….What is important is that the income support enables the very poor the opportunity to be able to afford housing not otherwise available to them….Providing rent subsidies is another approach we have shown can be effective at shrinking the need for emergency shelter beds. That approach is somewhat more prescriptive – the very poor must use the support on housing – but is similar in the sense that rent subsidy effectively increases the income available to the very poor to purchase more of life’s necessities. If the declining stock of affordable housing is in part the result of rising income inequality and poverty, then providing the poor with income support in these ways is a direct way of addressing the cause of the affordable housing crisis.

This non-exhaustive list of possible influences on the low-end housing market emanating from public policy choices suggests that all levels of government have a role to play in addressing homelessness and that they have a wide variety of policy levers to adjust.  Policy-makers need not, therefore, focus too narrowly on just a few policy responses.  Policy responses that have more subtle and less direct influences on the housing market than, say, the publicly funded construction of low-income housing, may have far more pervasive influences on the housing market and hence homelessness.   What’s more, more subtle policy responses may prove to be less costly to the public treasury and may avoid the potential for direct government provision or subsidization of housing units to result in reductions in the unsubsidized housing stock….It is useful to emphasize that our suggestion to increase social assistance income is a one time expenditure made necessary by the failure of policy-makers to properly adjust those payments to inflation. For reasons that are unclear to us, provincial governments do not index social assistance payments to the cost of living in the same way they index income tax brackets relevant to better-off Canadians or pensions provided to seniors adjusted by the federal government. Instead, provincial governments periodically increase social assistance payments in a haphazard effort to enable the very poor to keep up with rising costs….Indexing social assistance payments to the costs of the key drivers of the welfare of the very poor – housing and food costs – would go a long way toward enabling them to stay housed and escape the necessity of having to sometimes rely on homeless shelters.

CONCLUSION Homelessness is an exceptionally complex social problem. It has root causes in the personal traits of those most likely at risk of a spell of homelessness and the structural factors that influence the housing options available to the poorest of the poor. The unintended consequences of public policies also play a role. Our focus in this paper has been on those persons who experience homelessness as a result of what we have described as structural factors, the state of housing and labour markets that destine the very poor to be unable to afford even minimum-quality housing.

Contrary to popular belief, most people who become homeless will remain so for a few days or weeks but not become homeless again. The chronically homeless (sic due to drug abuse, alcoholism, etc.) whether for long periods or with repeated episodes, are a minority of those experiencing homelessness. An implication is that the majority of emergency shelter beds are provided to meet the needs of people who experience homelessness for short and infrequent periods and do so as a result of poverty. Our results, and similar results from research using U.S. data, suggest that relatively modest public policies can make significant differences in the perceived need to provide shelter beds. Directing support toward those for whom housing costs consume a very large share of their low incomes can have a significant impact on the number of people experiencing homelessness and thus on the need for emergency shelter beds.

….Data on the total adult population aged 15 years and over, the total aboriginal population aged 15 years and over, and the number of recent international migrants to a city are from the 2011 National Household Survey (NHS) available on the Statistics Canada website at http://www12.statcan.gc.ca/census-recensement/index-eng.cfm .

A recent international migrant is a person who lived outside of Canada one year prior to the census reference data of May 10, 2011.’ (end of Kneebone/Wilkins info.)

From “Encyclopedia of Canadian Social Work” (books.google.ca)

‘…..low rates in Newfoundland reflect severe cuts in 1996 to benefit levels for single employable persons and the low rates in Alberta reflect the steady decline in benefit levels under the conservative provincial government…. the current reality of less generous social assistance provision in Canada is reflective of the global ascendance of neo-conservative philosophies and the accompanying pressures of neo-liberal economic policies. Ideologies emphasizing individual blames, rather than collective responsibility, foster more restrictive social programs.  Restrictions to Canadian social assistance programs began in 1990 with a federal cap to limit expenditures under the Canada Assistance Plan, closely followed by provincial/territorial cutbacks through tighter eligibility criteria, lower benefit levels, and more stringent conditions.’

An example of the deterioration of social policies in Alberta was the introduction of 2001 Alberta flat tax rate of 10%.  While most of upper income level persons benefited from the 10% flat rate, the tax rate for bottom level income earners went from 8% to 10%.

It appears that the most common recipients in need of social welfare are single employable and single parents, yet the most emphasis today by governments and politicians appears to be on children of all family types when majority of focus should be placed on single parents.

Too often, current social assistance programs fail to distinguish a single employable family unit  from a married or coupled persons without children family unit.  There is no recognition that it costs a single employable family unit seventy per cent to live of what it costs married or coupled persons without children family unit.  When reviewing the literature on social programs many only look at the family units of singles, single parents with children, singles with a disability and married or coupled parents with children in their analysis.  To achieve financial fairness for singles, single person family units finances in relation to married/coupled persons without children family units also needs to be analyzed.

The single employable adult population that is often financially compromised includes aboriginals and recent immigrants.  Immigrant singles will often be more financially compromised than married or coupled immigrants with or without children family units.  An example is immigrant singles without family supports in this country working multiple jobs in order to send money home to their families (i.e. to buy necessary medications).  Some of these singles as result of over work unintentionally will suffer illnesses such as strokes from undiagnosed high blood pressure or undiagnosed diabetes or even death because they have not sought medical attention throughout their intensive work schedules involving multiple jobs.

How many different ways can it be said that Canadian singles are feeling financial despair in this country, one of the major factors being housing?

Yet another example is the financial profile of Jessica, an age 54 Ontarian single with three grown children  in ‘Home Ownership Possible But Tight’ (buying-a-home).  She would like to buy a home in the $150,000 range which is  pretty much impossible except in small town Ontario.   This is the same profile as several other presented in this blog (real-financial-lives-of-singles) Jessica has a take income of $3,315 per month or almost $40,000 per year.  Her rental income is $877 per month.  She has a company defined contribution plan.  The financial planner estimates that on retirement she will have approximately $2,300 monthly income for expenses.  Without home ownership, how does a senior single live on $2,300 per month with $900 per month rent?  If singles are unable to support themselves with a $60,000 – $70,000 pre-tax income (more than $15 per hour minimum wage), how are those at lower levels supposed to afford housing, (rental or home ownership)?

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

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

REAL FINANCIAL LIVES OF SINGLES

REAL FINANCIAL LIVES 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.

It seems governments, decision making bodies, families and married/coupled people have difficulty understanding that many singles are in as much financial distress as they are. They perceive singles to have spendthrift lifestyles and to be poor managers of their finances.  To show how untrue this is, five cases are presented here.  Four of the cases are employed singles or divorced persons; fifth case is a wealthy widower already retired.

CASE STUDIES

Case 1-Tanis age 54, November 2, 2013, Financial Post Personal Finance Evaluation, “Frugal Lifestyles Reaps Rewards” (business.financialpost)-Single 54 year-old (divorced in 2002, left with debt of $40,000 which she paid off in five years) has take-home income of $48,000 annually ($80,000 pretax?). Two children are financially independent.  She would like to retire between age 65 and 67.  To save, she buys clothes at thrift shops, has hair done by students and volunteers at events so she can see them without charge.  Assets $215,000 home, $75,000 vacation cottage $8,500 car, $149,925 RRSPs, line of credit $8,500, mortgages $201,374 with net worth of $239, 551.  She is anxious to sell vacation property as occasional rentals are not covering mortgage costs.  Article states she has turned frugality (financial distress) into a financial strategy.  Total monthly expenses are $3,996.  She has no money left for emergencies, replacement of vehicle, or other unexpected expenses like dental, vision care or medications.  Elimination of vacation condo mortgage, fees, insurance and line of credit would free up $1500 monthly for these financial realities. If she takes advice of financial planner (2013), she should have retirement income at age 66 comprised of $12,240 employee pension, CPP $10,840, OAS 7,008, investment income of $12,516 and $12,465 from other savings for total before tax income of $55,069 or $3,900 a month after 15% average income tax.

Case 2-Public Service Canadian employees in same job/wage categories with 2013 annual income around $67,000 for never married singles, no children (calculations may vary between provinces regarding tax and other deductions).  Approximate payroll , deductions include income tax $11,000, CPP and EI $3,200, union dues $900, public pension contributions $5,300, RRSP deductions $3,500, parking $1,200, health premiums and insurance $600, for total of $25,700.  This leaves $41,300 yearly take home income.

Case 3- Doris  age 63, October 12, 2013 Financial Post Personal Finance Evaluation, “The choices:  Be a good grandma and poor or work and retire happy” (pressreader)-This generous 63 year old grandmother (divorced or single with a grown child?) has total before tax  income $47,600 ($41,600 annual earnings and receives $6,000 from roommate with whom she shares apartment). Car worth $3,000 and $10,000 line of credit for negative net worth of minus $7,000.  She is barely making ends meet now.   Monthly expenses are $3,100 per month.   Question asked: can she quit work at age of 63 and babysit granddaughter for $500 a month?  Answer is a definitive ‘no’.  She is better off to work to age 65 to get full job and Canada pensions and then could give $500.00 to daughter (who earns similar salary as her mother) to help with daycare costs.  Best financial situation is to work until age 70 to maximize her own pension and have extra money as contingency.  At age 70 she will have after tax income of $3,800 a month.  As a renter this single has to work well beyond age 65 to avoid poverty as a single senior.  (She is very generous.  If there is problem with expenses, should she be contributing $116 to her granddaughter’s RESP?  Also food budget is high at $375, but some of this might be for granddaughter and is renter paying for own food?)

Case 4–Georges age 51, August 15, 2015, Financial Post Financial Evaluation, “Should he buy first house at 51? (business.financialpost)-Georges is a production line supervisor who rents and has total net worth of $152,000.  Current after tax income is $50,244 or $4,187 per month.  Financial planner states that Georges’ problem is very simple; he cannot afford both to buy a home and build retirement savings.  Repeat:  this man, who has appearance of a responsible productive citizen working at supervisory level, is making $81,600 a year, but has been told that he cannot afford both.  Financial planner says alternatives are to buy smaller (translation cheapest) home or get better paying job. At age 65 and still renting, his projected before tax retirement income is $55,258 (with OAS at 67), and 22% tax, after tax income will be $3,590 a month with $949 surplus to do with whatever he wants.  How generous and fifteen years later his apartment will be how old with no refurbishments and likely increases in rent!!!  (Georges does have very high food and restaurant expenses.  Further economies could be achieved by reducing these expenses.  His travel costs also appear very high; however, there is no mention that he owns a vehicle so some of the travel costs may be for transit and taxi costs.  Living wage for Guelph and Wellington suggests  $221  for transit and taxi for a single person.)

Case 5-Philip  age 78, October 26, 2013 Financial Post Personal Finance Evaluation, “Strategy:  Cut the taxman’s bite” (pressreader) -Widower 78 years old wants to keep as much as of his $1million net worth for his two sons, but can no longer pension income split.  His pre-tax income of $79,450 and taxable dividends puts him in danger of 2013 OAS clawback. The article states ‘that is unfair to every person who has taxable dividends and receives OAS.  In this case his sons will receive less inheritance.  It is the fact of life for every widow and widower.’  Wow, that really is a financial hardship for him (and his sons who will receive large inheritances)!!!  How the taxes were calculated for this person is not clear.  At one point, it is stated that taxes plus OAS clawback gives a total of 48% income tax payable.  Yet, his $66,000 income per month out of total $80,000 before tax income equals a deduction of only 18%.  After expenses, it is amazing that he is able to put $3,000 into his TFSA and savings accounts.

financial case profiles

ANALYSIS

  • Frugal financial lifestyle – Many singles are frugal because they have to be (Tanis).  Word ‘frugal’ used by financial planners respectfully describes financial distress of singles.  Why not call it was it is, a  poor financial quality of life?
  • Good incomes, but have difficulties living on them regardless if renting or paying  a mortgage– Some singles in these cases are making around $80,000 before tax income which is far above average before tax incomes of many singles and families in Canada.  The MoneySense 2015 All Canadian Wealth Test (wealth-test-2015-charts) (based on 2011 Statistics Canada data) shows that the top 20% quintile of unattached individuals have incomes over $55,499.  Unattached individuals in the middle 20% quintile have incomes from $23,357 to $36,859 and are considered to be middle class.  But are they able to live a middle class or wealthy lifestyle with these incomes?  If singles are having a hard time living on $50,000 plus incomes and are unable to max out their TFSA and RRSP accounts, there is something very wrong with financial systems for singles in this country (including lower income singles). Married/coupled people are quite often able to buy additional properties like rental and vacation properties, but then have to sell them (Case 1 – Tanis) when they become single because they can’t afford them.
  • Good incomes, but it doesn’t matter how much more singles make they still gain very little from increased income.  With every $20,000 increase in income they are lucky to get maybe extra $500 a month or $6,000 a year.  This is 30% gain in disposable income to 70% loss in deductions.  If Georges gets a higher paying job, he will likely be in a higher tax bracket. (added April 27, 2016)
  • Financial planners say it is not possible for singles to have a mortgage and save at the same time, can only do one or other.  They also tell single to get better paying jobs (but Case 4 – Georges already has a very good paying job at $81,000). – When singles are already working at very good salaried and management jobs earning $60,000 to $80,000, these are not $15 per hour jobs but $30 to $40 per hour jobs.  It is also bizarre when financial planners state these high paid singles are not able both to save for a house and save for retirement and should get better paying jobs ( Case 4 – Georges).  What does this mean, singles are only able to rent and cannot have mortgages except with $100,000 plus income jobs?  Another example is MoneySense April, 2016 “Budget Basics” (moneysense) – Lindsay is 29 year old engineering consultant from British Columbia who earns $71,000.  She owns an affordable $150,000 condo (housing costs are just 30% of her income which is nearly unheard of in British Columbia) and has $46,000 in RRSP and TFSA savings (saves 20% of her salary at $400 to her TFSA and $220 to her RRSP- RRSP is matched by her employer).   She wants to save for a bigger condo so she can have a dog and a garden.  The problem, though, is her expenses are surpassing her income.  She has $11,000 line of credit and $15,000 car loan.  The suggested financial action plan is to rethink her budget and to track her true expenses, subtract them from her net income and then reallocate what is left to savings.  She is in good financial shape, but she is trying to accomplish too many things at once (so stated in article).  In other words, it is very difficult for singles to have a mortgage and save at the same time even with good salaries.
  • What expenses are missing from budgets for most singles (can’t afford)? 
  • Dental, medical, medication
  • House maintenance
  • Extra monies for savings/emergencies
  • Restaurants/vacation/entertainment
  • Computer and repair, paper, ink
  • Replacement of vehicle
  • Other fees and expenses like library/recreation/fitness/magazines, books, etc.
  • Car license, registration, motor association fees
  • Professional association fees which can be very expensive depending on profession
  • Public Service single employees during employment or retirement are not as rich as everyone thinks – Singles with public service jobs (you know those people who make so much more than private sector employees and have outrageous pensions) often don’t have any more take home pay than private sector employees.  The public pension benefits must come from contributions during their working years leaving them financially stretched during their working years (this is not a bad thing as this is income being directed to savings).  Pensions on retirement are taxed at same rate as married persons and pension splitting is not available for singles.  Survivors pensions paid to widowers are subsidized by contributions of single employees.  Many singles with or without company pensions don’t have any more income in retirement than they had during employment.  If they are paying rent or mortgage they often are as poor during retirement and have no extra money for emergencies, replacement of vehicles and medical expenses.  (They may have a better quality of life during retirement if they own their own home and are not paying rent.  In these cases the only deductions public service individuals have any control over is the personal RRSP contribution).  Based on 15 year service as public service employee and rough calculation of retirement, take home income at age 65 is may be about $3,400 a month with rent or mortgage possibly not paid in full; therefore, these persons will have to draw from savings to pay expenses or work past the age of 65.
  • Unused RRSP and TFSA contributions – Most singles, unless they are wealthy, will have multiple unused room in RRSP and TFSA savings plans because of inability to max out contributions.
  • Married/coupled persons (many, not all) have unrealistic sense of entitlement and want it to continue throughout their lives from time of marriage to date of death – Case 5 – (business.financialpost) Philip wants to keep as much of his $1million net worth for sons’ inheritances, but doesn’t want OAS clawback on his income and taxable dividends.  Some married/coupled people with huge financial assets don’t want to give anything up (David 71 and Celeste 63, August 8, 2015, Financial Post Personal Finance Evaluation, “Couple fears shift to pension income”) (business.financialpost).  If they have problems during retirement, how about selling their $355,000 USA condo and winter at home in Canada?  Herb and Isabel at age 37 have so much wealth, $1.8 million, they can take two year out of country vacation and retire early and wealthy even though they have two children (Herb and Isabel, August 22, 2015, Financial Post Personal Finance Evaluation, “Vacation, Retirement hinge on real estate” business.financialpost).
  • Marital status or state of being married does not mean married people are any better at managing their financial affairs than singles (David and Celeste-need financial planning as disinterested investors with $ 1.9 million net worth, and Patricia 53, August 29, 2015, Calgary Herald, Financial Post Personal Finance Evaluation, “Debt clouds dreams of retirement at 60” who has monthly after tax income of $15,000) (pressreader).
  • Many married/coupled persons can retire before age 65, while most singles know they can’t retire until age 65 or beyond (Case 3 – Doris)
  • Shouldn’t financial systems be well planned to ensure all citizens (singles and young people) can live decent respectful financial lives without help from their parents and/or inheritances and without marital manna benefits?

CONCLUSION

Singles deserve same financial dignity and respect as married/coupled persons.  Singles need to be included in financial decision making and formulas at same level as married/coupled persons and families.

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

LOST DOLLAR VALUE LIST TO DATE AND FINANCIAL DISCRIMINATION OF SINGLES

LOST DOLLAR VALUE LIST TO DATE

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

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

lost dollar value table2018

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

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

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

CONCLUSION

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

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

GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION OF SINGLES AND QUALITY OF LIFE

GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION AND QUALITY OF LIFE OF CANADIAN SINGLES

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

There has been much discussion lately as to whether the CPP (Canada Pension Plan) system should be changed.  The objective of the government is for country to live in a society that takes care of its citizens.  The reality is that some citizens are being taken care of more than others, that is the rich and married/coupled persons while singles and low income are being financially discriminated against.

EXAMPLES OF FINANCIAL DISCRIMINATION

  • TARGETED TAX RELIEF PROGRAMS FOR SENIORS-The Federal Conservative government has a targeted tax relief program where a single senior can now earn $20,360 and a senior couple $40,720 before paying federal income tax.  Program claims that approximately 400,000 seniors (or 7 to 8% of total Canadian seniors) have been removed from the tax rolls altogether.  This so called tax relief for seniors allows federal tax relief for senior singles equal to $1,697 per month and for senior couples $3,393 per month.

The tax relief for senior singles hardly covers a rent or mortgage payment of $1,200 and $250 for food per month (Maslow’s Hierarchy of Need), but amply covers this amount for a senior couple.  For a couple $1200 for rent or mortgage and $500 for food leaves $1693 (or 50% of $40,000) for other necessities and medications and maybe even a nice little vacation all tax free.

It is a well-known fact that singles require more income to that of a married/coupled persons living as a single unit.  In Equivalence scales (Statistics Canada 75F0002M – Section 2 ‘The LIM and proposed Modifications’ (75f0002) (equivalence-scales) if singles are assigned a value of 1.0, then couples require 1.4 times for income, not 2.0. $20,360 times 1.4 equals $28,504 ($2,375 per month) (updated November 18, 2017).  If the federal government cared about income equality and quality of life for senior singles, it would increase the tax free amount for singles.  By not applying equivalence scales to  income for senior singles, they lose $678 a month or approximately $8,000 Lost Dollar Value annually in quality of  life to married/couple retired persons.  (From age 65 to 90, this amounts to $20,000).

When income for senior married/coupled persons is over $40,000 they again get another benefit, that is pension splitting, which singles cannot use increasing quality of life for married/coupled persons over senior singles.  This is a tax benefit piled on top of another tax benefit.

The number of senior ‘ever’ singles (never married, no kids) and divorced/separated persons comprises only about 13 per cent of the population, so how much would it cost to bring the quality of life for these citizens up to the standard of tax relief for married/coupled persons?  The answer is ‘not very much’ in comparison  to what has been given to  married/coupled senior persons.

“Ever” singles are told every day they are worthless and worth less than married/coupled persons even though they have worked 35 – 40 years subsidizing mother/baby hospital care, EI paternal/maternal leave, education taxes even though they have had no children and paid more taxes than families.

  • GOVERNMENTS IGNORE COURT RULINGSRe Allowance Program and Credits, (policyalternatives) 2009 Policy Brief, “A Stronger Foundation-Pension Reform and Old Age Security” by Canadian Centre for Policy Alternatives, page 4, states this program discriminates on basis of marital status as confirmed by case brought under Charter of Rights where federal court agreed program was discriminatory, and ruled it would be too expensive to extend program on basis of income regardless of marital status.’  So what is happening?  Age eligibility for Allowance will change from 60 to 62 beginning in 2023 with full implementation in 2029.  In this democratic, civilized country let’s just ignore federal court rulings and continue a $? million discriminatory program.  Article suggests that ‘OAS (Old Age Security) and GIS (Guaranteed Income Supplement) combined should be increased to at least bring it up to after-tax LICO (Low Income Cut Off) for single individuals.’  And why should married/coupled people get discriminatory marital status benefits where unused credits like Age Credits can be transferred to spouse?

Gross financial discrimination for singles occurs when governments choose to completely ignore court rulings.  Lost Dollar Value to singles:  unable to calculate.

  • PENSION SPLITTINGIt is immoral and ethically irresponsible for governments to deny that pension splitting benefits the wealthy most.  For families who can be exempt from paying 10 – !5 percent income tax on $100,000 and maintain the same income level during retirement as they had during their working years, even though they have less expenses during retirement, is financially discriminating to  singles who cannot pension split.  (This information was revised April 10, 2016 – Lost Dollar Value:  From estimate on income splitting, it has been suggested that income splitting would provide tax relief of $103 for income $30,000 or less and $1,832 for income of $90,000 and over or an average of $794 overall.  If $800 ($794 rounded off) is calculated times 35 years (age 65 to 90), then Lost Dollar Value will equal $28,000.)
  • HOUSING-Financial gurus seem to be leaning towards renting instead of home ownership.  This creates further hardship  for singles and the low income.  If young married/coupled persons are being told that they will probably need to rent because housing prices are out of reach, where does this leave singles and low income persons?  Trend now is towards tiny houses with composting toilets and tanks for storing water, but the rich don’t want to see tiny houses in their backyards.

Try telling singles and low income person that renting is the better alternative when they pay more per square foot and quality of housing is lower than that of houses for families.  If they have problems with not enough income for housing, they are told they should go live with someone.  These people ought to try ‘walking in the shoes’ of singles living in one room or communal situations, where because of low income, they don’t have their own bathroom, and it becomes a ‘dog eat dog’ world where others will, for example, steal food because there is not enough money to buy food. (cprn.org)

The housing market (rental and ownership) is financially completely upside down.  Instead of the rich and middle class paying more for the greatest amount of square footage, they are paying less for the greatest amount of square footage and niceties associated with that.  Singles and low income will be living in hovels, thus violating Maslow’s Hierarchy of Needs principle.

  • IF MONEY IS THERE YOU WILL SPEND IT, IF IT IS NOT, YOU WON’TFinancial studies have come to  conclusions that for people in the lowest income quintile on average have replacement rates of 100 percent, implying their real standard of living actually rises after retirement.  This is such a lie and is totally irrelevant to singles and low income persons.  If there is a poor quality of life before retirement, there still will be a poor quality of life on 100 percent replacement income for singles that does not meet the 1.4 income equivalent (updated November 17, 2017) to that of married/coupled persons living as a single unit.

CONCLUSIONS

Governments, decision makers, some financial advisers to the government. and think tanks are financially illiterate about the financial discrimination of singles.

It seems to be more important for governments to ensure that upper-middle class and upper class maintain their standard of living than it is to treat singles fairly.

Unprecedented growth in value of houses will result in huge tax-free wealth for families and married/coupled persons to the financial detriment of singles and low income.

Marital manna benefits like pension splitting has created a nanny state where married/coupled persons want it all and once these benefits are in place, it is very difficult to get rid of them.  Married/coupled persons have been made irresponsible by their own government.  They are not living a lower life style in their retirement.  A further question is whether these programs will be financially sustainable.

Assumption that retirement income only needs to replaced at 70 percent, for example, does not hold true for both singles and married/coupled persons, because singles require 1.4 income equivalent to married/coupled persons living as a single unit (updated November 17, 2017).  Twenty thousand dollars a year is not an adequate quality of life retirement income for Canadian senior singles.

GOVERNMENTS NEED TO ADDRESS FINANCIAL EQUALITY FIRST FOR ALL CANADIAN CITIZENS REGARDLESS OF MARITAL STATUS, THEN TWEAK CPP.

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

SENIOR SINGLES PAY MORE – Part 4 of 4

RESPONSE TO LETTERS ON UNFAIR SINGLE SENIORS TAXATION

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

(This opinion letter was originally published in a local newspaper on September 9, 2015.  Since there is a space limit for number of words that can be submitted to newspapers, additional comments that do not appear in the original published article have been added here in italics).  This blog post was updated on December 1, 2017 replacing 60-70% of living costs to 1.4 equivalence scale (equivalence-scales) for singles.

 Here we go again.  Opinion letters from last two weeks show married/coupled people cannot put themselves into singles’ financial shoes without dumbing down singles’ opinions and sticking singles’ finances into family financial boxes.  Unfortunately, singles finances don’t work that way.  Following is a response to both letters.

Re TFSAs (Tax Free Savings Accounts), caps must be set on TFSA amounts.  Otherwise, wealth spread between married/coupled people and singles and low income people will exponentially widen with less money collected in tax systems, and ability to pay for public programs such as education disappearing.  Most singles, single parent and low income families are unable to max out TFSAs at lower limit, let alone higher limit (and RRSPs-Registered Retirement Savings Plans).

Re income splitting benefits, multiple discussions show wealthy families benefit more than other families.  Present format implies households with singles, single parents (don’t get to stay home to raise kids) and parents with equal incomes don’t deserve same financial equality.  Re pension splitting married/coupled people already get two of everything including pensions.

You say bizarre conclusions have been reached.  Let’s talk bizarre.  Re Allowance Program and Credits benefits, 2009 Policy Brief, “A Stronger Foundation-Pension Reform and Old Age Security” by Canadian Centre for Policy Alternatives, page 4 policyalternatives.ca, states:

‘this program discriminates on basis of marital status as confirmed by case brought under Charter of Rights where federal court agreed program was discriminatory, and ruled it would be too expensive to extend program on basis of income regardless of marital status.’

So what is happening?  Age eligibility for Allowance benefits will change from 60 to 62 beginning in 2023 with full implementation in 2029.  In this democratic, civilized country let’s just ignore federal court rulings and continue a $? million discriminatory program.  Article also suggests that:

‘OAS (Old Age Security) and GIS (Guaranteed Income Supplement) combined should be increased to at least bring it up to after-tax LICO (Low Income Cut Off) for single individuals.’

Why should married/coupled people get discriminatory marital status benefits where unused credits like Age Credits benefits can be transferred to spouse?

Conservatives are so proud they have initiated targeted tax relief benefit where single senior can now earn $20,360 and senior couple $40,720 before paying federal income tax.  Using simple math, tax relief for single seniors is only $1,697 per month, for senior couples $3,393 per month.  Rent or mortgage payment of $1,000 per month is barely covered for singles, but is amply covered for senior couple.

BMO Retirement Institute Report “Retirement for One-By Chance or Design” 2009 .bmo.com and other reports state present tax systems give huge advantages to married/coupled people with singles never married or divorced at some point throughout their entire working career usually subsidizing married/coupled people.

Russell Investments “Spending Patterns in Retirement”, February 2010, russell.com states:

‘government transfers, such as CPP and OAS are generally not sufficient to cover Essentials of Retirement.  Problem is magnified for single retirees.  For example, in $35,000-$60,000 income category, couples spend only about 12% more than singles on essentials, yet receive about 80% more in government transfers’.

Eighty per cent more in transfers, why can’t married/coupled people grasp this fact?  Why can’t families understand that ‘ever’ singles have not used medical services for baby delivery, maternal/paternal paid LOA’s from work and many have not used any EI benefits?  Instead ‘ever’ singles are financially supporting and subsidizing families.

Reader #2 letter also talks about how expensive it is to raise a disabled child.  It is no different living as a disabled adult.  The Assured Income for the Severely Handicapped (AISH program in Alberta) allows only $1,588 a month for an unemployed disabled person of single status.

True living costs for singles must be recognized.  Using equivalence scales it is a well-established fact that living costs for singles are 1.4 to that of a couple.  If married persons own their homes outright, the cost of living is even less to that of singles who rent or have a mortgage.  If programs such as pension splitting and survivor benefits continue for married/coupled and widowed seniors, then at same time, singles and not widowed single seniors should get 1.4 equivalent scale enhancements through GIS and OAS relative to married/coupled persons’ baselines.   Equivalence scale of 1.4  for couples to that of singles’ federal tax relief of $20,360 income should equal $28,504 ($2,375 per month) not $40,720 for couples.  Why is that too much to ask?

Politicians and most families are financially illiterate in financial affairs of singles.  The Conservative political parties (provincial and federal) are particularly guilty of this as many marital status benefits have been implemented under their watch.

Further advice from reader letters state singles can live with someone else when they are already living in studio, one bedroom apartments, and basement suites.  Senior singles who have lived productive lives while contributing to their country want and deserve their own privacy and bathroom.  Many senior assisted living dwellings have in recent years built more spaces for singles who with one income pay more for that space than married/coupled persons.  Just how long should shared arrangements go on for (entire lives?) instead of correcting underlying financial issues?

Following examples show financial dignity and respect for singles (and low income families).  Attainable Housing (attainyourhome), Calgary, allows maximum household income of $90,000 for single and dual/parent families with dependent children living in the home and maximum household income of $80,000 for singles and couples with no dependent children living in the home.  Living Wage for Guelph and Wellington allows singles dignity of one bedroom and living wage income that is 44% of a family of 4 income and 62% of a family of two (parent and child).

Assumptions that middle class singles can live on average after tax income of $27,212 is bizarre.  Suggestion of $200 food budget and $110 transportation per month for singles is unrealistic.  At present gas prices, $150 per month is barely adequate for 30-40 minute drive to and from work.  For comparison, Living Wage for Guelph and Wellington (livingwagecanada) (2013 living wage of $15.95 per hour), a bare bones program to get low income and working poor families and singles off the street, allows a calculated living wage income for single person of $25,099 with no vehicle, food $279, transit and taxi $221 (includes one meal eating out per month).  (It should be noted that men require more calories; therefore, their budget for food will be higher.  Also in 2015, the living wage for Guelph and Wellington has been set at $16.50 per hour).

Reader #2 letter seems to include expenses such as utilities, insurance, and phone bill in family expenses, but excludes them from the single person expenses.  Reader #2 seems to think that $500.00 after food, transportation, clothing and rent expenses per month is ample money to cover miscellaneous expenses such as laundry, recreation and eating out plus the non-mentioned utilities, insurance and phone bill. The reader #2 letter then goes on to say:  ‘And, if a single person cuts out some of the recreational activities and eating out, could break even at the lower end.’  Once again there is that assumption that singles spend too much on recreation and eating out.  And, of course, there is no mention of singles having to save for emergencies or retirement.

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

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

Financial discrimination of singles is accepted in mainstream and is, indeed, celebrated.  Article like “Marrying for money pays off” (researchnews) implies married/coupled persons and families are more financially responsible.

In Calgary Herald article, August 7, 2012, Financial Post “Ten Events in Personal Financial Decathlon Success” (personal-financial-decathlon), the Family Status step says:

‘From a financial perspective, best scenario is a marriage for life.  It provide stability for planning, full opportunities for tax planning and income splitting and ideally for sharing responsibilities that can enhance each other’s goals and careers.  One or two divorces can cause significant financial damage.  Being single also minimizes some of the tax and pension advantages that couples benefit from’.

How nice!

There is no need for another political party as stated in Reader #1 letter.  In present political system, singles are losing financial ground.   Words ‘individuals’ or ‘singles’ rarely come to the financial lips of politicians, families or media.   What is needed is to bring financial issues of singles to same financial table as families and to make positive changes for both parties to financial formulas.  Singles are not asking for more financial benefits than families, but equivalency to family benefits as applicable at rate of 1.4 to that of household comprised of two persons.  They deserve this as citizens of this country.

So when singles are no longer able to live with financial dignity thus creating financial singles ghettos (financial bankruptcy because they are not included in financial formulas), just what will society do?  Apparently, they are looking for people to go to Mars.  Singles could always be involuntarily sent there.  Out of sight, out of mind.

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

 

UPSIDE-DOWN FINANCES RE HOUSING FOR SINGLES AND LOW-INCOME-PART 1 OF 3

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

UPSIDE DOWN FINANCES OF AFFORDABLE HOUSING SINGLES AND LOW INCOME-PART 1 of 3

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

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

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

To further magnify the issue, lottery in major northern Alberta city has first grand lottery prize of $2,092,000 for 6,490 sq. ft. house ($322 per sq. ft.), second grand prize of $1,636,000 for 5,103 sq. ft. house ($321 per sq. ft.), and third grand prize of $1,558,000 for 5,097 sq. ft. house ($306 per sq. ft.).  First house has elevator, games/theatre area, kid’s lounge, gym, and music room. Second house has hockey arena with bleacher seating, lounge and bar.  Third house has spa, gym, yoga studio, juice bar and media room.  Need anything more be said about the rich? They usually get more while paying less and acquiring choicest spots.

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

How is any of this different than loan-sharking or pay day loans where targeting of the most vulnerable occurs?

Article, “The Micro Units Movement” May 27, 2015 (smartergrowth) states

‘although micro units are cheaper on an absolute scale for buyers, they tend to be more valuable for developer on a per square foot basis.  Shawn Hildebrand, vice president of condo research firm Urbanation, says condos under 500 square feet can bring in well over $3 per square foot, while the rest of the market averages around $2.50 or $2.60′.

(Lies, lies and more lies-Mark Twain quote ‘there are three kinds of lies:  lies, damned lies and statistics’-it is more than $3).  Cheaper on absolute scale? (These tiny spaces are not cheaper for economies of scale.)  Why is it okay on any scale to financially rob the poor, low income, young people and singles in what will likely be most expensive purchase of their lives and affecting one of most basic principles of Maslow’s Hierarchy of Needs, that is shelter?

MoneySense, September/October, 2015, (moneysense) ‘Two ways to cool white-hot home prices’ says as much by stating developers, motivated by profit, have built mostly smaller one and two bedroom units.  This article also talks about how concern should not be how much houses cost, but how out of reach home ownership for Canadians has become.

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

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

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

In this so called civilized, enlightened country of ours, it appears that citizens of value are only middle-income families and the rich while individuals/singles with and without children are being annihilated from financial, political, and everyday living scenes.  (Examples are present day TV home buying/renovation programs and married/coupled persons getting free homes in “Home Free” program.  Individuals/singles without children have been eliminated from these programs.  Why is this so-probably because they no longer have financial wherewithal to be part of this programming, just blatant discrimination or both?)

If families have such high family values, shouldn’t family values and moral social values take precedence instead of being trumped by almighty dollar greed and philosophy of charging what the market can bear and more?

Low income families, individuals/singles and young adults not yet married who can apply simple math and critical thinking skills are in financial despair and angst knowing that they, as the most vulnerable citizens of this country, have been targeted and pawned to pay more for housing than middle class families and the rich.

It is the duty of politicians elected by the people, for the people to represent all Canadian citizens, not just vote getting middle class families.  (MoneySense article-‘housing affordability for the many should take precedence over the political aspirations of a few’).  To stop gross financial discrimination of low-income families and individuals/singles, talk to your Member of Parliament and mayors about financial unfairness and the upside/down financial world you are being forced into particularly in the housing market.

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