Retirement Gordon Powers - Sympatico / MSN Finance - Flaherty gives a little back to pensioners: "Flaherty gives a little back to pensioners
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By Gordon Powers
November 14, 2006
While many older Canadians were devastated when Finance Minister Jim Flaherty effectively killed income trusts, they can draw a bit of solace from his decision to introduce income splitting for seniors earning pension income. And, for some seniors at least, this is actually quite a bonus.
Starting in 2007, more than two million pensioners will be able to split income from corporate pension plans, just as they do now with payments from the Canada Pension Plan. Flaherty also promised a $1,000 increase in the age credit to $5,066, starting in 2007.
All this is long overdue, of course. Allowing splitting of CPP payments between spouses in 1978 and spousal RRSPs in 1985 were half measures that unfairly left private pensioners out in the cold. Now he’s created a more level playing field between defined benefit plan members and those who save through RRSPs, as well eliminating some inequity between married couples and those who divorce. "
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