Nine Ways your Family Finances will Change under a Liberal Government

Here are nine things you need to know about how your personal finances will change under the new Liberal government. These points are based on measures the party campaigned on prior to the election Monday.

1. Middle class tax cuts: People with taxable income between $44,700 and $89,401 will save as much as $670 per year on their income taxes.

2. Tax increases for high earners: The Liberals will increase income taxes on people making more than $200,000 a year. At $300,000, the extra tax would amount to $3,330; the top combined federal and provincial marginal tax rate will be above 50 per cent in Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia.

3. Changes to the TFSA limit: The annual contribution limit would likely fall back to $5,500 from the current $10,000.

4. Goodbye, Family Tax Cut: This current income splitting measure allows the higher-earning spouse in a family with kids under 18 to transfer up to $50,000 of income to the lower-earning spouse so it can be taxed at a lower rate. The maximum tax break under this measure is $2,000.

5. A new Canada Child Benefit: This will replace the current Universal Child Care Benefit and provide an extra $2,500 a year or so for a typical family of four. Families with household income of $200,000 or more will not receive this benefit.

6. OAS at 65: The Liberals have said they would not go ahead with plans to gradually raise the age of eligibility for Old Age Security by 2023.

7. CPP Enhancement: The Liberals have talked about working with the provinces to bolster Canada Pension Plan benefits. This calls into question the future of the proposed Ontario Retirement Pension Plan.

8. Home buying: Relaxing the rules under which people can pull money out of a registered retirement savings plan for a house down payment. The Home Buyers’ Plan currently focuses on first-time buyers; people would additionally be able to use it multiple times when moving for work, after the death of a spouse, after a marital split or to take in an elderly relative.

9. Student loans: Grads would not have to repay student loans until they earned at least $25,000 a year, with interest paid by the federal government during that period; also, the maximum Canada Student Grant for low-income students would rise to $3,000 annually for people studying full time.

The Globe and Mail

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