Family plan benefits $30K-$60K earners least

Yorkregion.com
Jan. 27, 2015
By Andy Blatchford

Of all the families eligible for the Conservative government's controversial family tax-and-benefit measures this year, those earning between $30,000 and $60,000 will see by far the smallest windfall, internal Finance Department numbers show.

The government's own breakdown shows families within that income bracket in 2015 will receive average relief of $660, just slightly more than half the overall average of $1,140 for all eligible families - those with children under 18.

By comparison, the figures show the new measures will provide average relief of $1,218 for families in the under-$30,000 income bracket; $1,073 for those in the $60,000 to $90,000 range; and $1,598 for those earning more than $270,000.

Families landing in each of the remaining income brackets between $90,000 and $270,000 will receive average relief of at least $1,171, the document says.

The government's numbers also show while families with kids in the $30,000-$60,000 bracket make up 19 per cent of all beneficiaries, they will only get 11 per cent of the relief.

The Canadian Press obtained the figures under the Access to Information Act.

A Finance Department spokeswoman said the expected average relief in the $30,000-$60,000 range is smaller that of the sub-$30,000 category because families with annual incomes less than $30,000 don't typically pay income tax, once personal credits are taken into account.

Stephanie Rubec singled out one of the features in the family bundle: the enhancement to the universal child care benefit. She said it provides greater relief to families on an after-tax basis.

"In contrast, families with annual family incomes over $30,000 are more likely to pay some tax on this additional benefit," Rubec wrote in an email.

The family plan, which includes a controversial $2-billion-a-year income-splitting component, is expected to be a centrepiece of the Conservatives' re-election campaign when the country heads to the polls later this year.

It has also become a preferred bull's-eye for their adversaries, who say income splitting is an unfair policy that provides no relief for 85 per cent of all households, while giving more benefits to wealthier families.

Finance Minister Joe Oliver insists low- and middle-income families will see two-thirds of the relief from the full suite of measures, which were introduced in October. By that measure, Oliver says families - including those with only one parent - with annual incomes as high as $120,000 qualify as middle class.

The Finance Department's own internal breakdown of the distribution of relief shows 68 per cent of the benefits - about two-thirds - will go to families that earn as much as $120,000 in 2015.

Statistics Canada says the median 2012 income level for families of at least two people was $82,100, including government transfers but before taxes. This includes families without kids.

In its internal analysis of the family package, the Finance Department also used income calculated with transfers and before taxes, a spokesman said.

The government's figures show that 25 per cent of the relief will go to families that earn under $30,000 in 2015; 11 per cent to those earning between $30,000 and $60,000; 15 per cent between $60,000 and $90,000; and 17 per cent between $90,000 and $120,000.

Together, these categories represent 68 per cent of the relief. The average relief for families that earn less than $60,000 is expected to be $970, while those in the $60,000 to $120,000 bracket will get an average of $1,219.

The remaining 32-per-cent share will benefit families that bring in more than $120,000 this year.

Overall, the government documents say just over four million families will benefit from the measures in 2015 by an average of $1,140 each.

The entire package is expected to reduce government revenues by $4.62 billion in 2015 and $26.7 billion between 2014-15 and 2019-20.

A report released Tuesday by the Canadian Centre for Policy Alternatives found families making more than $233,000 per year will receive the biggest benefits from just the income-splitting component of the bundle.

The income-splitting measure allows an eligible taxpayer with at least one child to transfer up to $50,000 of income to his or her spouse in order to collect a non-refundable tax credit of up to $2,000 per year.

The report also says only 52 per cent of families with children under 18 years old will enjoy any benefit from income splitting, and from that group about 20 per cent will receive roughly a dollar per day.