Pension Income Splitting

If you must pay a client rate for home and community care services, your rate is based on your net income (line 236) less taxes payable (line 435). Therefore, if you and your spouse elect to split your pension income for tax purposes, it will impact your rate accordingly.

Tax splitting, like many other financial management options, has benefits and potential implications which are most appropriately discussed with a financial professional.

It is your personal decision on how you manage your reporting of income to Canada Revenue Agency, and as such, you also need to be fully aware of the consequences of how you report your income.  If you wish to take certain actions that result in lower income taxes, and therefore higher disposable income, the result will be that, for income-tested programs, you may be charged a higher amount.

Canada Revenue Agency provides information on their website about the effect of pension income splitting on federal, provincial and territorial benefits, credits, programs, and instalments.

For more information see:

• Pension Income Splitting: Federal, provincial and territorial benefits, credits and programs from the Canada Revenue Agency