The 2011 Federal Budget and Seniors: Taking More Than It Gives?
On Tuesday March 22, Finance Minister Jim Flaherty revealed the 2011-2012 federal budget, his sixth for the Canadian Conservative government, amid rumors of a spring election and the controversy of a government found in contempt of parliament.
To appeal to a suburban and rural voter base, Flaherty and Prime Minister Stephen Harper opted for a budget described as a “low-tax plan for jobs and growth,” creating short-term deficits ($29.6-billion in 2011-2012) to finance the stimulus plans still in place from the economic downturn (funding 28,000 projects and creating 480,000 jobs since 2009), and an eventual return to a balanced budget in 2015-2016 (with a projected surplus of $4.2-billion). This year’s budget is expected to save $6.2-billion over five years, and spend an extra $7.6-billion over six years (go here for more numbers and facts from The National Post).
But there were a few groups the budget specifically pointed out to receive more support from the federal government in the 2011-2012 fiscal year - one of them being seniors. Here are a few changes that specifically affect seniors:
- Family Caregiver Tax Credit. Starting in 2012, anyone who cares for an infirm relative and already qualifies for the spousal or common-law partner credit, child tax credit, eligible dependent credit, caregiver tax credit, or infirm dependent credit, can claim an extra 15% on an amount up to $2,000.
- Medical Expense Tax Credit. The 2011-2012 budget has lifted the $10,000 cap on medical fees that can be claimed for “dependent relatives” other than a spouse or child under 18.
- Guaranteed Income Supplement (GIS). Seniors who rely on the GIS and Old Age Security will receive boosted GIS payments, starting in July, up to $600 for single seniors and $840 for seniors. The budget also allocates an additional $5 million a year to senior support programs.
- Mandatory Retirement Age. All federally regulated employees, including those in the banking, telecommunications, and transportation sectors, are free to remain working regardless of agreements that state a mandatory retirement age. Commercial pilots are the only exception.
(With files from The Globe and Mail, Canadian Business Online, and the National Post)
Despite the new credits and appealed restrictions on retirement age, many Conservative critics are unhappy with the new budget. NDP leader Jack Layton in particular shamed Jim Flaherty and Stephen Harper for not providing enough support for low-income seniors, and stated that the New Democratic Party will not support the budget because of it. Others say not only is it insufficient credit, but it also complicates the system of receiving GIS payments, by increasing the amount taxed on GIS credit is a senior begins making more income from other areas.
What do you think? Did the Conservatives make the right move in increasing GIS payments, or is it too little too late? Should seniors decide when to leave the workforce? Let us know your thoughts in the comment section.
