Hennessy’s Index: February 2014

Perks for the Rich: Income splitting

Hennessy's Index

Hennessy’s Index is a monthly listing of numbers, written by the CCPA's Trish Hennessy, about Canada and its place in the world. For other months, visit: http://policyalternatives.ca/index

  • 2007

The year Canada’s federal government extended to senior families the opportunity to partake in extra tax breaks through pension income splitting. [Source: Finance Canada, 2007 Federal Budget, pg 222.]

  • 1 out of 5

 Number of Canada’s senior families among the richest 10% who receive more than $1,000 in tax breaks from pension income splitting. [Source

  • 1 out of 1,000

 Number of Canada’s senior families in the poorest half of the income spectrum who receive more than $1,000 in tax breaks from pension income splitting. [Source

  • $820

Estimated average tax break enjoyed the Canada’s richest 10% of Canadian senior couples who take advantage of pension income splitting at tax time. [Source

  • 10 cents

Estimated average tax break the poorest 10% of senior couples in Canada get from pension income splitting. [Source

  • 7 out of 10

Number of seniors who enjoy no benefit whatsoever from pension income splitting. [Source

  • $1.7 billion

The estimated cost of lost provincial and federal revenues in 2015 due to pension income splitting. For about the same amount ($1.5 billion), the federal government could have invested in a program to lift all poor seniors above Canada’s after-tax Low Income Measure. [Source

  • 2011

The year the federal Conservative party (now in majority government) promised to extend income splitting perks to families with children under the age of 18. [Source

  • $1,100

The average benefit the richest five per cent of Canadian families with children under 18 would enjoy a year if the federal government widened the income splitting tax loophole to include families with kids. [Source

  • $50

The average tax break the bottom 60 per cent families with children under 18 (those making $56,000 or less) would receive from income splitting. [Source

  • 86

Percentage of all Canadian families who would gain no benefit whatsoever from income splitting. [Source

  • $3 billion

Estimated loss in federal revenues if the federal government extends income splitting to include families with children under 18. [Source

February 1, 2014