The Plan for Single Seniors

Single seniors are among Canada’s most vulnerable citizens and face unique financial challenges. The cost of living can be a challenge for those on fixed incomes.  In addition, when a senior becomes widowed, that senior loses access to some benefits their spouse received and widows or widowers can experience negative financial consequences as a result.

In response, a re-elected Harper Government will establish a new $2,000 “equivalent-to-spouse” Pension Income Credit for single and widowed seniors.  This Single Seniors Tax Credit will extend additional tax relief to nearly 1.6 million single seniors in Canada who have pension income.  It will be phased in over four years beginning in January 2017, and will cost $23 million in the first year and reach $397 million per year when fully implemented.

The new Single Seniors Tax Credit can be combined with the Pension Income Credit. The Pension Income Credit is a 15-percent non-refundable tax credit on an individual’s first $2,000 of eligible pension income. The credit applies to different forms of private pension income, but does not apply to CPP or OAS payments.  The current credit is beneficial to senior couples because it can allow both spouses to claim the amount in combination with pension income splitting. More than 4.6 million seniors claim the Pension Income Credit each year and receive approximately $1.1 billion in annual tax relief.

As result of this new policy, a single senior would be able to claim both his or her Pension Income Credit up to $2,000 and the Single Seniors Tax Credit up to $2,000 to shield more of his or her pension income from taxation.  The net result is that a single senior could receive a combined total tax relief of up to $600 annually.

The new Single Seniors Tax Credit would be similar to the current Eligible Dependent Credit that allows, for example, single parents with children to claim a credit equal to the basic personal exemption.

Through this new Single Seniors Tax Credit, Prime Minister Harper is making an affordable and fair commitment that targets Canada’s most vulnerable seniors. And it does so by putting money back into the pockets of seniors – not through higher taxes for everyone.

THE ISSUE

The Conservative government has cut taxes and is making life more affordable for Canadian seniors. By reducing taxes year after year and enhancing direct benefits to Canadians, we have made sure that seniors keep more of their hard-earned money so that they can make the choices that are right for them.

Since 2006, the Harper Government has created $3 billion in additional annual targeted tax relief for seniors and pensioners. We:

• Introduced Tax Free Savings Accounts (TFSA), which 2.7 million Canadian seniors have now opened. Income earned and withdrawals from TFSAs do not affect eligibility for the Age Credit, Old Age Security (OAS), and Guaranteed Income Supplement (GIS) benefits.
• Enhanced the TFSA in 2015 to allow Canadians to contribute up to $10,000 each year. By 2019, we expect seniors to receive 60% of the benefits from this new contribution limit.
• Introduced Pension Income Splitting for seniors to benefit more than 2.2 million Canadian seniors each year. The average benefit is more than $900 annually in federal tax relief.
• Improved the rules for Registered Retirement Income Funds to allow seniors to preserve more of their retirement savings.
• Increased the Age Credit amount by $2,000, to provide up to $1,055 in annual tax relief for eligible seniors.
• Created a new, permanent, non-refundable Home Accessibility Tax Credit for seniors and persons with disabilities that provides up to $1,500 in tax relief each year.
• Doubled, to $2,000, the maximum amount of income eligible for the Pension Income Credit, which provides up to $300 in direct tax relief for eligible seniors each year.

• We introduced the largest increase to the Guaranteed Income Supplement (GIS) in 25 years, ensuring that Canada has one of the lowest rates of seniors’ poverty in the world.
• The GIS earnings exemption was increased to $3,500 from $500.
• Improvements were made to the CPP to allow individuals who wish to stay in the labour force to also receive CPP pensions.
• The OAS system was improved in 2013 to automatically enrol seniors for benefits, and to allow seniors to opt into a delayed pension in exchange for receiving higher payments at a future date.
• As a result of social security agreements with more than 50 other countries, over 200,000 foreign pensions are paid each year to recipients in Canada.

THE CHOICE

Seniors at all income levels are benefitting from the tax cuts and enhanced benefits introduced by the Harper Government, with low- and middle-income Canadians receiving proportionately greater relief. Tax-Free Savings Accounts have provided Canadian seniors with a secure and flexible savings option that protects their money from being eroded by taxes.  Pension Income Splitting is providing significant tax relief to over 1 million senior couples.  And increased GIS benefits are helping Canada’s most vulnerable seniors.

Justin Trudeau and Thomas Mulcair’s NDP have made big promises – unaffordable promises that they would need to pay for with higher taxes. Based on their records to date of opposing Harper Government initiatives to help older Canadians, seniors should worry about whether the NDP and Liberals would actually keep the promises they are making.

As an example, both the NDP and Liberals voted against the Harper Government’s increases to GIS benefits. Justin Trudeau and Thomas Mulcair are opposed to income splitting and both have vowed to scrap our expansion of the TFSA, promises that will negatively impact seniors more than any other group.

The NDP has also committed to bringing into Canada large numbers of elderly immigrants who don’t have jobs and won’t contribute to the economy. For Canadian seniors who have worked their entire lives for their retirement benefits, the NDP’s promises will mean reduced health care access and income benefits and higher taxes.

Justin Trudeau and Mulcair’s NDP have also promised new carbon taxes that will make everything more expensive – from groceries to home heating to prescription medicine.  The overall higher cost of living that will result will have devastating effects on Canadian seniors, especially those on fixed incomes.

Canadian seniors can be confident that Prime Minister Harper will keep his promises, given his lengthy record of supporting seniors. He has kept taxes low and worked to keep more money in the hands of seniors to spend on the priorities they choose.