Marriage penalty in BC

Posted October 3, 2008 by Sacha Peter - Link
Category: Economy

From a press release, announcing that the “climate action dividend” will be distributed to low income individuals, we have the following quotation:

In addition to the personal, corporate and small business income tax cuts provided this year, the tax-free B.C. Low Income Climate Action Tax Credit will be sent to more than one million residents. Individuals with incomes of up to $30,000 in 2007 and B.C. families with incomes of up to $35,000 will receive the maximum annual amount of $100 for each adult and $30 for each child in the first year. Single parent families will receive $100 for the first child.

I always wondered why the government has different tiers for income testing between singles and married people.

For example, if I made $25,000 in a year, and got together with somebody else making $25,000 a year, we would collectively get $200 a year from the government for the climate action dividend. However, if we got married, that would vanish as collectively we would be pulling in $50,000 a year.

This logic also applies to other income-tested programs, such as the federal GST rebate.

Most of the financial benefits (in terms of government benefits) through marriage only occur at much later stages of life (e.g. pension income splitting).