Here are some real-life examples of the unfairness single seniors face under Canada's tax system.
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.”
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."
A widow with low CPP survivor benefit and OAS clawed back
As with so many others, I went through the issues when my partner died…. The spousal
CPP survivor benefit I received was a shocking $134 a month; pretty hard to understand
why the government rules and formula take away the bulk of the deceased’s benefit that
he or she paid into for decades and which helped pay the bills. Insult to injury there’s no
longer any pension splitting like married/common law couples enjoy, the list goes on.
The biggest shocker after all this is that because I was still working my OAS was clawed
back, almost all of it but I thought okay next Feb of 24 when I no longer have a salary
coming in I thought I could just apply using a Form12/13 to have my OAS reinstated. My
accountant said good luck, most companies won’t even fill and submit the form any
longer, the federal govt won’t even look at. So I’ll have to go through all of 2024 and part
of 2025 with just my CPP and once I submit my 2024 income tax I’ll get back 2024 and
then go forward. This is usually assessed and confirmed in July of each year. So 18
months to correct this? Unbelievable.
So extra taxes, loss of an income, no pension sharing and then the OAS nightmare. I’ll
be okay. I can cash in investments if needed plus I’ve lived frugally and saved as I have
no work pension. Seniors and especially single seniors are not just forgotten but the
“system” appears to take unacceptable leeway with the money they have or worse,
I continue to feel for the single elderly women and men trying just to survive. I found it
insultingly interesting that during the pandemic it was decided that people needed
$2000 a month to live on; however I know of so many seniors who live on less, noting
that they didn’t get additional money to top up their fixed incomes to meet the $2000. I
wrote many emails to both federal and provincial
Widower’s big increase in taxes – Kelowna, B.C.
I worked until I was 67 and retired in 2014. My wife was diagnosed with Multiple
Sclerosis in 1998 so she was “unemployed” from 2003, she did receive a Disability
Pension. Due to CRA allowable deductibles, we paid little to no income taxes for quite a
few years. My wife passed away February 2021, so our last return as a couple was for
the 2021 tax year.
My income comes from CPP and OAS. I do receive a UK Government Pension from
contributions prior to emigrating to Canada (1982). I receive a pension from my old UK
employer and a small survivor’s benefit from my wife’s former UK employer. Thanks to
some savings built up over the years, we were able to purchase two RRIF’s when I
retired to provide some monthly income. In total, my taxable Income for the 2022 tax
year from the above listed sources equaled $35,951.77.
For me as a single, that’s approximately $3000 to cover my condo maintenance fees,
my monthly utilities, my property taxes, my auto insurance, and my grocery, gas,
clothing, gifts (grandkids) and any other items needed. I have no medical insurance so
dental, prescriptions, and optical need to be paid from my income but at least they
provide some tax deductions!!
After completing my 2022 tax return, I was somewhat shocked; no, it wasn’t somewhat
it was very shocked to find I owed $2,409.75 in taxes. So, I fully support any and all
efforts you are making to bring the unfairness of the Canadian Tax laws on Single
Seniors. Anyway, that’s my story, as I said feel free to use it, and please accept my
gratitude for all your work and efforts on this subject.
Another widow – Ontario
After my husband died 4 years ago my taxes escalated immediately. My income is in the
$80,000 range and the tax went from approximately $3,000 to plus $6,000. Quite a
shock for a widow.
Another widow who realized she’s paying more than a couple
Hello. The article on single seniors being unfairly taxed too much was recently
forwarded to me and was of great interest. I have been a widow now for about eighteen
years and I am very fortunate to have a good income. I nursed for 42 years and have
my own pension as well as a partial pension from my husband’s fund. In addition, we
have been savers, paid off our home and made wise investments. My complaint is that
for many years, I felt that I paid too much income tax. Talking to coupled friends whose
income is equal to mind, and in some cases more, I find out that they are paying less
tax. My taxes are done by a reputable accountant and I trust that he is working in my
favour. I want to pay my share but it seems to me that I am paying beyond my share. It
is past time to redesign the tax laws.