With much pomp and to do finally the Federal budget has been released. The way that we as tax payers wait for these budgets to come down it is like the anticipation at Christmas if we are going to get a nice gift or a lump of coal.
With this latest budget at first glance it looks like it’s a something for all budget, however let’s look a little closer.
First of all as we all know this is an election year so this put an extra burden on the budget makers to come good with their offerings. It was a prime opportunity to fulfill a previous election campaign promise. This is in reference in the increase to the tax savings account increase. This was quite a hefty raise from the current limit of $5,500. to $10,000. This appears to be really good, however looking at it realistically how beneficial is it to those who are basically living hand to mouth, and savings is out of the question. It may be the goal to act as an encouragement for us to save, but in order to save you have to have the extra money to do this in the first place.
The seniors budget incentive:
The big change here is the minimum withdrawals that seniors at the age of 71 how to make regarding their RRIFs. Currently seniors who have this registered retirement income funds are supposed to withdraw a minimum of 7.38 of these funds every year, and must max out the funds at 20% when they reach 94. The new change introduces a minimum of 5.28 withdrawal and a 20% cap at age 95. Again this is great for the seniors who happen to have RRIFs, but does nothing for those that don’t. Although there is supposed to be a tax credit for both seniors and the disabled who need renovations to their home, in order for them to be able to remain there. Again, it benefits those who have some extra cash for the renovations in the first place.
Students of the future:
For 2016 there should be a reduction in what parents are expected to contribute to the Canada Student Loans program. The budget is also expecting to eliminate claw backs for part time working students depending of the Canada Student Loan Program. Additionally plans are indicated to expand eligibility for low and middle income prospective students for grants related to some short term educational programs.
Caregivers and Parents:
There is the enhanced universal child care benefit, and the split income incentive. One of the more significant changes that might benefit more people is for individuals who need to take time off work to care for a terminally ill loved one. This will change from the six weeks to six months. This is in reference to compassionate care benefits.
Small Business:
The budget proposal is a deduction in the small business tax rate that will be gradual from 11% to 9% by 2019.
So if you look over the highlights of this budget you need to determine basically what’s in it for you. If you are living under tight money constraints there really isn’t a lot going for you. According to some the budget was set to target and secure the voters who are already pro Harper. At least this way it means going forward when the election campaigns heat up the Harper government can focus on new votes rather than trying to hang on to those who are already loyal.
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