YORKTON-MELVILLE SENIORS TO BENEFIT FROM TAX FAIRNESS PLAN

OTTAWA – Senior citizens across Canada received good news Tuesday as Finance Minister Jim Flaherty announced pension income splitting which will begin in 2007. The announcement is particularly good for residents of Yorkton-Melville, the constituency containing the largest proportion of seniors per capita in Canada.

“Many of our aging and retired seniors face a real financial struggle. Some are even unable to afford to keep and live in their own homes,” said Garry Breitkreuz, Member of Parliament for Yorkton-Melville. “Tuesday’s announcement will put real money back into the pockets of these people.”

The announcement of the Tax Fairness Plan includes over $1 billion annually in new tax relief to Canadian pensioners and seniors through two major new initiatives:

• First, by permitting income splitting for pensioners beginning in 2007.
• Second, increasing the Age Credit Amount by $1,000 from $4,066 to $5,066 effective January 1, 2006.

These two measures will significantly enhance the incentives to save and invest for family retirement security.

“Any Canadian resident who receives income qualifying for the pension income tax credit can allocate up to one-half of that income to their resident spouse or common-law partner,” said Breitkreuz. “That income will now be taxed at the lower rate of the non-pension earning spouse or partner.”

The pension income that qualifies for this tax relief is the same income that qualifies for the Pension Income Credit – Registered Pension Plans; and RRSP annuities, RRIFs, and DPSP annuities (if recipient is age 65 or over).

“Already financial analysts are predicting this move will allow many couples to keep thousands of dollars in lower taxes by income splitting on pensions,” said Breitkreuz. “I am very pleased that through this announcement, our government is giving Canadian seniors a real tax break.”

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