CASE STUDIES
Here are some real-life examples of the unfairness single seniors face under Canada's tax system.
The Sisters
Sarah and Anne are sisters who are both in their late seventies/early eighties. They’ve lived together and shared a home in Calgary and split all their expenses for the last fifty years. They’ve also shared in parenting Anne’s son, Carl.
As they plan for the future, they were disappointed to learn that they don’t get the same rights as couples, despite their shared living expenses. In particular, they’d like the same RRIF portfolio transfer rights as senior couples: that upon the death of the first sister, her RRIF portfolio can be transferred tax-free into the RRIF of the surviving sister. But the law says no. That’s only allowed if the housemate is a spouse. Sisters don’t count.
A Doctor's Retirement
Dr. Barrett is a family physician in Fredericton who has spent 40 years in the workforce. Now nearing age 70, she’s hoping to retire. As a single senior who has worked hard her whole life, she was shocked to learn that she’s paying so much more tax than her two married brothers. One has a hefty pension from work in a corporation and the other is a retired teacher, also with a hefty pension. Since they both can split their pensions with their spouses, they fall into a lower tax bracket. On top of this, they qualify for full OAS and other benefits for themselves and their spouses. Dr. Barrett qualifies for neither.
Because the cost of living for a single person is 70% of what it is for a couple, and because of her high taxes, Dr. Barrett has to save much more than her brothers. Under a tax system that favours couples, she feels penalized. As a self-employed woman who doesn’t have a pension, she pays over one-third of her income in taxes. “I guess it helps to support my brothers’ handouts.” she says, “but I do get fed up listening to them brag about income splitting.”
A message
from a supporter
...in her own words
"I met with my Liberal MP this week and gave him a list of my concerns. I have just turned 67, I'm working full time and will never have access to the tax free GIS couples can exploit by postponing CPP, maxing out double the amount of TFSA and not having to include $1,252 in OAS payments, almost $25,000 in additional income and waived $10,000 in employment income, to receive the maximum amount. They can share RRSP deductions to put them in the lower tax bracket person’s account and claim one as a legal dependant.
I have two daughters still in school, one 17 and one just turned 20. No matter how I crunch the numbers, if I retire on a small amount of CPP and RRSPs I must pay tax on, I cannot afford to keep my house. The cost of accommodation and transportation is the same, couple or single. The tax breaks and government programs, completely different.
Not sure anything I said made a difference, but I do know my MP supports guaranteed income. I guess we will see if he raises any issues. Single seniors were completely ignored during the last two election campaigns. And with galloping inflation, things are only getting worse as we have almost no ability for tax writeoffs."
