Event: Tax relief for seniors
Venue: Peoples Park Tower Retirement Home, Moncton, NB
Date: June 25, 2015
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Good morning. Thank you, Robert (Goguen) for that kind introduction¬―and thanks also to Peoples Park for hosting us. I'm really pleased to be here.
Today, Robert and I want to acknowledge the important role that seniors play in our families, communities, and workplaces.
Under the leadership of Prime Minister Stephen Harper, our Government is committed to ensuring a high quality of life for seniors.
In 2014, over 6 million Canadians were aged 65 or older - that's 15 percent of our population.
By 2030—in less than two decades—seniors will number over 9.5 million, making up 23 percent of all Canadians.
This extraordinary change in our demographics presents new opportunities for Canadian society.
It also presents challenges, which we are committed to meeting to ensure both the well-being of seniors, and Canada's future prosperity.
Our Government has put in place policies, programs, and initiatives to help seniors enjoy a high quality of life.
- … helping to ensure financial security,
- … helping to promote healthy and active aging,
- … and helping seniors be more safe and mobile in their own homes.
Seniors are already benefitting from several important money-saving measures our Government has introduced—such as pension income splitting, and Tax Free Savings Accounts (TFSAs).
These are real benefits and real savings that our Government will give you.
We are making it easier for Canadians to save money.
But we also want Canadians to feel confident that their savings will be there for them while they are enjoying their golden years.
We have introduced two more new tax relief measures in Economic Action Plan 2015.
First is the reduction of the minimum withdrawal factors for Registered Retirement Income Funds. Second is the introduction of the Home Accessibility Tax Credit.
Reducing Minimum Withdrawal Factors for RRIFs
Canada has a three-pillar retirement income system.
The Old Age Security/Guaranteed Income Supplement programs and the Canada Pension Plan/Quebec Pension Plan form the first two pillars of Canada's retirement income system.
Many Canadians supplement this income by relying on their own savings.
Canadians' retirement savings are typically held in tax-assisted registered plans, such as:
- Registered Pension Plans (RPPs),
- Registered Retirement Savings Plans (RRSPs),
- Registered Retirement Income Funds (RRIFs),
- and Tax-Free Savings Accounts (TFSAs).
The rules concerning RRSPs, as many of you may know, dictate that they must be converted to an RRIF when you reach 71 years of age.
But the fact is that Canadians are living longer than ever before, enjoying decades of retirement. Under the current rules, there can be a real risk of outliving one's savings.
That's why Economic Action Plan 2015 introduces important changes to these rules.
We want to give seniors more freedom and flexibility when it comes to managing retirement income.
Our Government will reduce the minimum withdrawal from a RRIF for seniors aged 71 to 94. This move better reflects rates of return, inflation, and longer life expectancy.
By reducing RRIF withdrawals, you can retain more assets in your RRIF. These assets will continue to accumulate on a tax-deferred basis to support your future retirement income needs.
With these changes, seniors won't be pressed into paying taxes on withdrawals from RRIFs that you may not need. More of your money stays tax-sheltered until you do need it.
Home Accessibility Tax Credit
We are also pleased to introduce a new Home Accessibility Tax Credit. This 15 percent non refundable income tax credit applies on up to $10,000 of eligible home renovation expenditures for 2016 and subsequent tax years.
That's up to $1,500 in tax relief.
The credit can be claimed by individuals who are 65 years old, or who are eligible for the Disability Tax Credit.
It covers eligible costs for renovating or altering your home in order to provide better access and greater mobility inside.
The Home Accessibility Tax Credit will make it more affordable to install vital quality of life supports, such as wheelchair ramps, walk-in bathtubs, wheel-in showers, and grab bars.
We want to help seniors and those with disabilities be more mobile, safe, and functional within their own homes.
And we all know that maintaining our independence in our homes and communities is key to our quality of life.
Additional Tax Savings
We are happy to see that the number of senior-specific tax credits and benefits claimed each year is increasing.
There are also many other tax savings that seniors—and Canadians of all ages—can benefit from.
Many seniors qualify for the GST/HST credit when they file their tax return each year. As you know, this is a tax-free, quarterly payment that helps people with modest incomes offset all or part of the GST or HST that they pay throughout the year.
Do any of you take the local bus? You may be eligible to claim the public transit amount to increase your savings at tax time.
You might be surprised to learn that premiums paid to private health services plans and, in certain circumstances, even gluten-free food products may qualify for the medical expense tax credit.
Our Government is indeed putting more money back where it belongs: in your hands.
Tax reductions give Canadian seniors and their families greater flexibility to make the choices that are right for them.
I was very involved in my parents' elder care. They are both gone now, but my Dad passed away at age 89 and my Mom at 93, having outlived 3 of their 7 children.
I am proud that our Government also introduced the Family Caregiver Tax Credit. Since 2012, individuals supporting a dependent relative who has an impairment in physical or mental functions may be eligible for this tax credit.
The credit—based on an amount of $2,058 for 2014—supplements tax credits that can be claimed for a spouse or common-law partner; an eligible dependent; children born in 1997 or later; and certain other dependent relatives.
Canadian Centre for Aging and Brain Health Innovation
Before I close, I would like to draw attention to another new initiative I am especially proud of.
Economic Action Plan 2015 invests up to $42 million dollars over five years to help establish the Canadian Centre for Aging and Brain Health Innovation.
This national centre will be located within Baycrest Health Sciences in Toronto.
In addition to providing world class geriatric health care, Baycrest is home to a leading academic health sciences centre, affiliated with the University of Toronto and collaborating with research institutions across North America.
This funding acknowledges that, as our population ages, age-related cognitive impairment and chronic conditions are becoming more widespread.
This, in turn, has placed a greater burden on families.
Research on aging and brain health issues such as dementia can lead to better diagnostic tools and swifter treatment—as well as innovative products and services to support brain health and aging.
This announcement builds upon our Government's strong record of investments in research and support for Canadians suffering from dementia and other neurodegenerative diseases.
We recognize the importance of improving the quality of life of individuals living with Alzheimer's disease and dementia—as well as their families and caregivers.
We are ensuring that Canadian seniors enjoy the benefits our Government has put in place—both to improve their quality of life and to allow them to keep more of their hard-earned dollars.
These are just some of the ways we're working to express our gratitude, on behalf of all Canadians, to the men and women who helped build the incredible way of life we have in Canada today.
For more information about the wide range of programs, benefits, and services related to seniors, visit our website.
Canada.ca/Seniors is an excellent resource for seniors, their families, their caregivers, and supporting service organizations.
Click through to CRA to stay informed about the tax-related services and benefits available to seniors!
Our Government is committed to ensuring that we meet the diverse needs of older Canadians, now and in the future.