Canadian Personal Finance Blog

The past couple of years, I have used my Quicktax program as a financial forecasting tool (as well as an excellent, if somewhat expensive, tax preparation program). Every year I wonder what is the difference if both my wife and I worked and earned the same Gross Family Income, as compared to our current situation where I am the sole bread winner (by choice)? (a note for American readers, there is no concept of income splitting in Canada, until you retire, and even then…)

I have pointed out on this web site (and to my members of Provincial and Federal Government) that the Canadian Tax code is slanted toward dual income families and actually penalizes the “traditional” single income family.

Before I get posts about how I am against women in the workplace, or the same kind of arguments, I am the father of 3 daughters, and I am not against women in the workplace (I prefer female bosses, if you were asking my opinion), what I am saying is that single income families do not get the advantages that dual income families have.

Some of these advantages are:

• Writing off day care costs. Now yes, this is legitimate costs of going to work, so I am not saying this is bad, however, they get to write off summer camps as well, however, I do not because my wife stays at home.
• The “equivalent to married” non-refundable tax credit I get for my wife adds up to not very much (I’ll have that as part of my calculations in later postings).
• A benefit of having two medical programs (which not all dual income families have) is that a lot of expensive medical procedures typically only covered as 1/2 on most medical plans, end up being covered completely by both insurance companies (e.g. Braces, Crown replacements, etc.,)
• What happens with CPP? Both in a dual income family would get CPP payments, but does my wife get one, in a single income family? Don’t know, need to go find that one out.

There are other tax advantages as well. Now, a single income family like mine has other advantages as well (I am not complaining about the single income concept, I think it is good), so let’s not get into discussions like that I am looking solely at the Canadian Tax system. My family gets the “Beer and Popcorn” money and doesn’t get it clawed back!

Coming next, what do the numbers say?

Related Links:

• The Disappearing Middle Class in Canada
• Spousal RRSP: Income Splitting
• My Spouse is Worth How Much?
• High Price of Parenting

UCCB ?

Yes, tax time is coming folks and as I trip over the mistakes I have made, and things I have forgotten, I will post hints and reminders for you, so you don’t make the same mistakes that I might be making.

Last night we got our “Beer and Popcorn” money from the government again (said he belching as he types), or as it is officially called, the Universal Child Care Benefit (or something that gives an FLA of UCCB). It then dawned on me that it is important to show this benefit as income for your family, on your tax form for last year. Now I have it in my records that I was only running down to the Beer Store since July, so $600 worth of income, that you should claim on the spouse’s return with the lower income. If you both make a nice amount of money, you’ll be paying tax on it (ouch!), in that case the UCCB may not be your best friend.

To paraphrase a well known Oktoberfest song, “In Heaven there is no beer, that’s why we have to claim it on our income tax…”?!? Or something like that. UCCB, our new friend.

Well the first GAFF of the election campaign on a topic near and dear to my heart, and for us beer swilling, popcorn chomping parents of toddlers, none too soon either.

“Don’t give people 25 bucks a week to blow on beer and popcorn,” Reid said during a panel discussion on CBC News: Sunday. “Give them child-care spaces that work. Stephen Harper’s plan has nothing to do with child care.”

I’d like to say for all the other Coors swilling parents, I represent that remark! This is why I love elections, when people who shouldn’t speak in public are forced out and make the remarks that are REALLY on their mind. Mr. Reid feels that we parents of young children can’t be trusted to use moneys given to us on Daycare (which some of us, don’t need), and we might squander it on things like Food, or Rent, shame on us! We should allow the government to spend their money (wait a minute that’s OUR money) on what we need. Good for them (for those of you without your sarcasm filters on, please read the previous paragraph with a very sarcastic tone).

Mr. Reid is evidently profusely apologizing for saying what he thought, which contradicts his bosses point of view (or does it?). I don’t see why he should apologize, if that is his opinion, opinions are what I like hearing (whether I agree with them or not). That way, I know what people are thinking, and now I know that the Prime Minister’s Communication person thinks, I can’t be trusted to spend $100 a month on my son, ok, sounds fair.

No, this is not a PRO-Conservative blog, nor a PRO-Liberal or even a PRO-Rhinoceros blog, rest assured, I will attempt to find other fun and humorous points to discuss during this election campaign, and believe me dear reader, there are going to be MANY more to come.

Keep a smile during this festive season, and remember to ask the questions you want answered, but remember to put down your beer when the candidates come to your door, but you could offer them some popcorn. –C8j

So with the birth of my new son a few months back, it dawned on me that I might be able to “qualify” for the “Child tax Credit” (or family allowance) program up here. What follows is what I have found out. (Click here for the actual government web site)

Just as background, it used to be there was a Universal (i.e. everyone got it) Family Allowance program in Canada, for children under the age of 18 (and disabled children). That worked well, and thus the government decided they needed to “tinker” with it (ok, ok, I’ll keep my commentary to a minimum). The government decided that higher income Canadians really didn’t need subsidies for having kids, so they started “clawing” the money back (this was also back when you got a Tax Credit or break for having kids too, which has since disappeared too). The clawback was on a rolling scale, and if you were in the highest tax bracket, you had to give it all back. This meant you had this surreal scenario where the government might send you $100 a month and then you would owe $1200 in taxes at the end of the year because of the money they sent you. (This link gives you an even better historic explanation of the program)

A while ago (I can’t remember) that whole system was scrapped (along with Child Tax Credits) in favor of a new system, which was again “tax free” grants given to folks who had kids and “needed” it. For a while I have not “needed” this money (at least in the Government’s eyes), and I thought, ok, fair enough.

At Christmas when it seemed obvious that my son was going to arrive, I figured I’d check to see whether I might now be entitled to some money, and sure enough, I did. I found a nifty little calculator on line and I input my families vital statistics and sure enough, yes, I was entitled to some money, FANTASTIC! I needed to have all forms in for July 15th of the year to qualify to get any money this year (keep that in mind). (NB: You can find this calculator here!)

My son was born, WHOO HOO! We had to apply to get a certificate of live birth, which in turn you use to create a birth certificate with, but you can use the first certificate as a birth certificate for a little while (complicated eh?). We apply for the certificate of live birth. June rolls around and still no certificate (and I can assure you my son is still here, as are his sisters). I read the forms over again, I can use a BAPTISMAL certificate to apply for the Family Allowance, SWEET! I mail that in with all the correct forms.

July rolls around, we get a form letter back from the government. Due to your income, blah, blah, blah, no Family Allowance for you! Oh?!?!? Darn, oh well, it would have been nice to get, but that’s the way it falls, I grumble, and file the document.

August rolls around, another letter from the government stating, that YES in fact I am allowed to have a Family allowance cheque and in fact they OWED me money for the past 3 years because they hadn’t paid me!!! Whoo Hoo! Bring that FILTHY LUCRE my way, Sweet!

So, I implore you, apply for any government programs, the worse they can say is NO (or NO and YES the way they did to me). I am still expecting a third mailing that said the second mailing was wrong and they in fact want me to pay THEM money! (so I will be hiding under my rock for a while too). –C8j