Income splitting would not benefit low-income single parents, minister says

Income splitting would not benefit single parents because the majority are considered low income, says Minister of State for Social Development Candice Bergen.
Minister of State for Social Development Candice Bergen says the government has no plans to introduce income splitting for single parents. (Sean Kilpatrick/Canadian Press)

Income splitting would not benefit single parents because the majority are considered low income, says the Minister of State for Social Development, Candice Bergen.

In an interview airing Saturday on CBC Radio's The House, host Evan Solomon asked Bergen whether the government would consider adopting income splitting for single parents — similar to what is offered in France where a parent could split their income with their child, instead of a spouse.

According to Bergen, that option would not be of benefit to many of Canada's single parents, because about two-thirds of them wouldn't qualify.

"We're still at a point where the majority of single parents are low income and so income splitting wouldn't benefit them. That's why we want to do things like the universal child care benefit in which they would be obviously either not taxed or taxed at a much lower rate," she said.

According to 2011 tax data from Finance Canada, about 55 per cent of single parents do not pay income taxes, based on tax liabilities before refundable credits. After taking into account refundable credits, the proportion of non-taxpaying single parents increases to about 75 per cent.

Prime Minister Stephen Harper announced on Thursday "the family tax cut," which will allow two-parent families with children under 18 to split their household income up to $50,000.

For a family with a stay-at-home spouse or someone working part-time, the new policy means the partner with the larger income could assign up to $50,000 of their income to the lower earner for tax purposes.

There is a $2,000 cap on the maximum benefit a family can earn. It does not apply to households with only one parent.

The program will cost about $2.4 billion in foregone revenues this year, and an average of about $2 billion per year over the next five years.

Good public policy?

The NDP questioned Bergen's comments and the need for income splitting, suggesting it is designed to only benefit wealthy families.

Greta Levy, a spokeswoman for the NDP, said in a written statement to CBC News that Bergen is "highlighting that her party has made a choice to reward a core constituency, as opposed to those of us who believe that a surplus would be better spent on universal daycare and health care or anything relevant to the other 85 per cent."

Liberal finance critic Scott Brison said the comments by Bergen show "a startling lack of compassion and wilful ignorance of good public policy."

Brison questioned why the government was introducing an income-splitting program "that does nothing for single parent families, that need help the most."

The Liberals have said they would reverse the government's income splitting policy.

In addition to income splitting, the prime minister also announced a boost to the universal child care benefit to $160 a month per child up to age six from the current $100 per month. The government will also introduce a credit of $60 per month for children aged six to 17 years.


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