Governments do more for older people. While it’s important to note that some seniors struggle as well, it is also true that governments make it easier for middle-class retired seniors with decent finances to live comfortably. To assess this, we calculated the seniors benefits and taxes for a fictional 67-year-old Ontario couple we’ll call John and Judy Connelly. Although their combined $66,000 income is less than the Spencers, their expenses are a lot lower as well because their home is paid for, their children are self-sufficient, and they no longer have work-related costs. With less income, they also pay less income tax. Chances are they have more disposable income on hand than the Spencers to spend on their lifestyle (or put to other good uses, such as helping their children).
Their benefits and taxes put them ahead by about $9,000–almost $24,000 better than for the Spencers. “The government is much kinder to us,” says Malcolm Hamilton, both a retirement expert and a retiree himself. “We’ve got relatively low expenses so we don’t need a big income and have lower taxes.”
Providing more help for daycare costs would be a good place for government to start. Paul Kershaw, executive chair of the Association for Generational Equity would like to see universal daycare support at $10 per child per day. Others would prefer seeing more money or bigger tax credits go directly to families instead.
Kershaw stresses that his group doesn’t advocate taking money away from seniors to pay for more child and family programs. In the past, social programs were expanded and financed relatively painlessly by diverting some of society’s growing wealth, but with a slow-growth economy, that is trickier these days. As well, an aging population is making it more difficult to continue to fund existing social programs and entitlements to their historical levels, so it’s unlikely that a lot of new money can be found without taking it from someone else.