OAS CLAWBACK OUTRAGEOUSLY BENEFICIAL TO UPPER MIDDLE-CLASS MARRIED OR COUPLED SENIORS, BUT FINANCIALLY DISCRIMINATORY TO SINGLES AND POOR – ADDENDUM
(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.)
One of our past blog posts (oas) on subject of the OAS Clawback (proper name is OAS Recovery tax as per Canada Revenue Agency) and the financial discriminatory properties behind the program was discussed.
This blog post further emphasizes the financial atrocities and discrimination that senior singles face with the OAS Recovery program. The Old Age Security (OAS) is a federal social program designed to provide a very modest pension to low- and middle-income retirees. It is part of the Universal government benefits for seniors (pillar 1) to ensure income security for senior Canadians (so stated in government and Canada Revenue Agency information sites).
As previously shown 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 per person. In 2016 the OAS benefit is $6,680 for single person and $13,760 for a couple.
One should note that OAS recovery for a couple begins with each spouse earning maximum net income of $72,809 each (total $145,618) the OAS is only partially recovered for a couple with net income over $145,618 and a single over $72,809 The couple, therefore, continues to get to keep a portion of the OAS benefit for each person with the full financial benefits of additional up to $72,809 ($145,618 minus $72,809) net income than for a single person.
The complete clawback of the OAS benefit only occurs at $236,110 for a married or coupled family unit, but for a single person it is $118,055. The couple, therefore, only has complete clawback of the OAS benefit with the full financial benefits of additional up to $118,055 ($236,110 minus $118,055) net income than for a single person.
Another point is that partial OAS recovery only begins at $145,618 for a married or coupled family unit while complete recovery (elimination of OAS) has already occurred for a single at $118,055. In other words, married or coupled family units have been given the financial privilege of up to an additional net income of $27,563 to manipulate at their will ($145,618 minus $118,055); this has already been completed eliminated for a single senior.
If one carefully looks at the above, can a conclusion of double-dipping (triple-dipping, etc.) of finances for married or coupled family units be reached? (reasons) In majority of cases, upper-middle class married or coupled family units get to keep partial OAS benefits plus have benefits of additional net income plus pension splitting plus double TFSA limits, etc. The double-dipping, triple-dipping, etc. is even more pronounced as it has been clearly shown that it costs more for single persons to live than married or coupled family units.
The irony of the statement ‘OAS program is designed to provide a very modest pension to low- and middle-income retirees’ at the beginning of this post should not be lost to the reader. The very program that is supposed to provide a ‘very modest pension to low and middle-income seniors’ has been designed to ‘line the financial pockets’ of upper-middle class married and coupled family units who have more than a modest pension.
This once again shows how politicians and the government surreptitiously and purposefully implement benefit programs that increase the wealth of upper-middle class married or coupled seniors over single person seniors. Politicians and governments are surreptitiously and purposefully creating a middle-class system where the upper-middle class are replacing the middle class. What is advertently or inadvertenly being created is a class system comprised mainly of the poor, upper-middle class and the wealthy and favouring married or coupled family units.
(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.)