New Measures for Seniors from the Trudeau Government
December 3, 2015 · Print This Article
The new Trudeau government has made a number of election promises to secure its mandate – and a number of these new promises are to seniors. Most are positive, but its worth looking at all of them to examine what may be your new financial outlook under the new government.
Yvonne Ziomecki, senior vice president at HomEquity Bank, which administers the CHIP home income plan, has this to say about the upcoming changes: “The comments we hear from seniors, every day, are that government changes are needed to areas affecting finances. Some are struggling while others face dire financial challenges.”
The pros of the new election promises for seniors
There is one very positive development; a Seniors Price Index to ensure that Old Age Security (OAS) payments keep up with the cost of living. This will ensure that lower income seniors will be able to see an increase in their payments when they need them.
Eligibility for Old Age Security and the Guaranteed Income Supplement (GIS) will happen at age 65 once again, and the Guaranteed Income Supplement will be increased by 10% for single, low-income seniors.
The cons of the new election promises for seniors
Depending on which side of the pension income splitting debate you are on, and how high your pension is, the elimination of pension income splitting could be looked at as a negative. If the income disparity between the individuals in the couple is very high, pension income splitting can be beneficial – if, however, it is not, it may be detrimental. However, the increase in OAS payments and the decreased age of eligibility may offset some of these costs for all but the highest pension earners.
The major negative item of the new election promises is the clawback of the recent Tax Free Savings Account (TFSA) increase to $10,000 annually, which will mean that seniors need to deplete their RRSPs more quickly, which in turn will raise their taxable income.
On the whole, the new measures for seniors are designed to improve the circumstances of low and middle-income seniors, while leaving the fortunes of high-income seniors largely untouched, although more taxable.
If you have concerns about the new measures for seniors, now is the time to make your voice heard – before the policies are implemented. Writing to your local MP and joining an organization like CARP which lobbies for Canadian seniors are both avenues by which your voice can be heard.