A federal report suggests wealthy Canadians are getting access to benefits intended for the elderly poor.
The actuarial report on Canada’s old-age security program finds that tax-free savings accounts, introduced by the Tories in 2009, will eventually allow the wealthy to scoop up more than $4 billion each year from a low-income program.
That’s because money in TFSAs isn’t counted when determining whether an elderly person is needy enough to be eligible for the guaranteed income supplement, worth $665 a month.
A tax expert says the impact may be small right now, but the federal government should consider adjusting the rules or the tax system to prevent the rich from accessing money earmarked for the poor.
Prime Minister Stephen Harper has promised to eventually double the maximum contribution to TFSAs, to $10,000 a year, a move that Jon Kesselman says will also primarily benefit higher-income Canadians.