Freda Jones is a professional tax preparerThe proposal to increase the Guaranteed Income Supplement (GIS) is not the best or only way to help out Canadian seniors at this time. Instead, it’s way past time to give some relief to single seniors who pay taxes because there are many tax benefits that a senior couple, married or common-law, can take advantage of for which single seniors are ineligible. Single seniors sometimes pay several times more income tax on the same amount of income than a couple together pays, even though most non-discretionary expenses are similar.The GIS, available when a low-income person or spouse receives the OAS pension, has been increased several times over the last few years. Currently, the GIS is cut off completely for single seniors with an income of $22,272, a meager pittance to try to live on today, while in some cases a couple can receive up to $53,376 between them and still qualify for the GIS. .Anyone who has worked, paid into a pension plan and saved for their retirement will not be happy to know that the GIS pays up to $1,098/month to some low income seniors, an amount which is more than many retirees receive from earned company pensions after decades of working. And it’s important to note that the GIS payment is even more valuable than a work pension because the GIS is not taxable, while pensions are.There is a GIS Allowance of up to $1,395.73 a month, for example, that a 60- to 64-year-old spouse of an OAS recipient can receive tax free, despite never having worked, depending on their combined income.A 60- to 64-year old surviving spouse with net income less than $29,976 could be eligible for a GIS Allowance of up to $1,663.81 a month. .In some situations a couple can use the Split-Pension option on their tax returns with the lower income spouse reporting up to 50 percent of the higher income spouse’s pension income, where it will be taxed at a lower rate, and both will be allowed the 'Pension Amount' deduction of $2,000. The resulting lower taxable income of a couple could entitle them to other benefits that a single senior would not be eligible to receive.A senior can take a deduction on their income tax return for a low- or no-income spouse, with an additional deduction for a low income spouse with physical or mental impairments. Certain other deductions not used by one of them, such as medical expenses, moving expenses, donations, federal political contributions and the disability deduction, can be transferred to the other to lower their taxable income in the most beneficial way..Upon a senior’s death some assets such as RRSPs can be transferred tax free to a surviving spouse’s RRSP account, while the RRSPs of a single senior are immediately taxable no matter who the beneficiary is.The Canadian group Single Seniors for Tax Fairness (SSTF) was formed several years ago for the purpose of trying to have changes made to these income tax anomalies. They have been asking MPs for help for several years but after many promises, nothing has been done. Their website singleseniorsfortaxfairness.com illustrates case studies and other information on some of the tax issues of single seniors..Certain changes could benefit any tax-paying senior.On the 2024 income tax return the Age Deduction of $8,790 for those over 65 starts to be reduced at net income of $44,325, an income level that is very difficult to survive on today after taxes are paid.Interest earned on investments is taxable and most interest must be included on the tax return in the year it is earned/accrued even though the interest earnings might not be received until the following or a later year, which could prevent allowable beneficial tax planning.The claw back (referred to as a recovery tax) of Old Age Security (OAS) for the 2024 tax year began at $90,997 net world income, something to be aware of if a person is drawing down taxable investments such as RRSPs. Seniors are required to convert RRSPs to a RIF in their 71st year after which there is a mandatory taxable withdrawal amount each year..The First Home Savings Account allows those eligible to save every year within limits and to take a tax deduction for the money deposited. No tax has to be paid on the money when it is withdrawn to buy a home. Unfortunately, anyone over 71 is not eligible to join the plan.Seniors and retirees are being encouraged to participate in the workforce if they can, both for their own financial benefit and to fill a vacant position. The cumulative Education Credit of $250 a year “to help Canadians with training fees” can be claimed against tuition a person pays for eligible courses which could help to get a job or to return to employment; however, eligibility for the credit ends at age 65.The deduction for a safety deposit box to store investment papers in is no longer allowed.Seniors might be able to get a mortgage but cannot protect it with mortgage insurance..In 2015 the Tax Free Savings Account annual contribution limit was $10,000 a year, but it was reduced to $5,500 the following year. For the 2025 tax year the deduction is still only $7,000.The biggest disappointment in this era of “Fairness for Every Generation” (as the last Canadian budget issued in 2024 was called) is the Canada Pension Plan Survivors’ Benefit. When a couple both pay into the CPP and one of them dies, the surviving spouse will only receive a small portion of the deceased spouse’s CPP if he or she is receiving his or her own CPP pension even though both of them might have paid into the fund for years, right at the time when you are left alone and need it the most. There is a cap on the amount of CPP a person can receive, even for the survivors’ benefit. He or she could find that they only receive a minute portion of their deceased spouse’s CPP payment, even though both have worked for years and saved for retirement, many expenses cost as much for one person as for two, and the CPP fund has very robust sums of money invested. There might be changes coming for future recipients, but some consideration should be extended to those widows and widowers who paid into the previous plan and did not have the opportunity to participate in the present enhanced CPP program.Costs for rent, food, transportation, insurance, bank fees, mobile and home phones, TV and internet inch up constantly. There is still inflation, no matter how it is spun, and costs are higher every month than they were the same time last year. No doubt some of the industrial carbon tax ends up being passed on to the end consumer.Even though the individual T1 tax return has evolved into an eight-page-plus-attachments tribulation, surely there are skilled taxation workers who understand the process and could offer assistance to those who have the authority to make the changes.Freda Jones is a professional tax preparer.
