Tory family plan includes income splitting component
Tory family plan will see families earning between $30K-$60K receive an average relief of $660.
Families with kids and incomes between $30,000 and $60,000 this year will receive the smallest average relief -by far – from the Harper government’s controversial family tax-and-benefit measures, internal Finance Department numbers reveal.
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 families.
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 who earn 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 11-per-cent of the relief.
The Canadian Press obtained the figures under the Access to Information Act.
A spokeswoman for the Finance Department 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.
As a result, 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, including 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.
Political opponents have zeroed in on the income-splitting element, calling it an unfair policy that provides no relief for 85 per cent of all households and provides more benefits to wealthier families.
But the finance minister 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, Joe 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.
“I’m proud that our government has presented a plan, a benefit plan for four million Canadian families, every one of them,” Oliver said Monday while defending the government’s package in the House of Commons.
The debate over the family plan also exposes how the subjective nature of the so-called “middle class” remains an open question.
There is no universal definition of the term, which is frequently trotted out by politicians as a way to connect with a large group of voters.
Economists prefer to stick to statistical definitions to identify the middle class, such as isolating the 20 per cent of all income earners who land directly in the middle in terms of income.
They may also try to pinpoint the median income, selected by lining up all earners from top to bottom and identifying the person in the middle.
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.
By Andy Blatchford of The Canadian Press
