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OAS and CLAWBACK LIMITS Year


Maximum OAS pension


2016 2015 2014 2013 2012


$6,846.24 $6,764.88 $6,676.59 $6,579.06 $6,510.60


Minimum income recovery threshold


$73,756 $72,809 $71,592 $70,954 $69,562


Maximum income recovery threshold


$119,398 $117,909 $116,103 $114,815 $112,966


children or change the beneficiary of the plan to someone else in the family. One of the key benefits of an RESP is that the federal govern-


ment pays a subsidy called the Canada education savings grant (CESG) for each child who is a beneficiary of an RESP from the day the child is born to the end of the calendar year of his or her 17th birthday. Payments made to an RESP under the CESG or under a designated provincial program are not included when determining if the lifetime limit has been exceeded. The current annual maximum CESG per bene-


Alberta BC


ficiary is $500, which is 20% of the first $2,500 of contributions paid annually. Each child is entitled to a cumulative CESG limit of $7,200. In some cases the CESG will have to be repaid. This can happen if the beneficiary doesn’t pursue higher education or the plan is terminated.


Old age security: a change in the 2016 federal budget is the proposal to cancel the provisions in the Old Age Security Act that increase the age of eligibility for OAS and guaranteed income supple- ment (GIS) benefits from age 65 to 67. The eligi- bility age will be restored to age 65. For 2016 the maximum annual OAS pension is $6,846.24, based on the $570.52 maximum monthly amount for the first and second quarters of 2016. The OAS threshold amount aſter which


Manitoba New Brunswick


clawback begins is at net income of $73,756 in 2016. All OAS will be clawed back at net income of $119,398, since 15% of any income in excess of the threshold amount is clawed back. Note that the OAS pension is adjusted for inflation on a quar-


terly basis, so this amount will probably increase during the remainder of 2016.


Maximum marginal tax rates: the combined maximum marginal tax rate is the rate a person will pay on income that falls in the top federal tax bracket of $200,000 and above. For provinces and territories that have tax brackets higher than the top federal bracket, the chart reflects the rates above their top bracket. Those brackets are $220,000 in Ontario, $300,000 in Alberta and $500,000 in the Yukon.


DAVID TRAHAIR, CPA, CA, is a national bestselling author and personal finance trainer and speaker. His latest book for CPA Canada is The Procrastinator’s Guide to Retirement. His website is www.trahair.com


MAXIMUM MARGINAL TAX RATES % (as at March 22, 2016) Ordinary Eligible


income 48


47.7 50.4 53.3


Newfoundland & Labrador 48.3 Nova Scotia Nunavut


54 44.5


Northwest Territories Ontario PEI


Quebec


Saskatchewan Yukon


47.05 53.53 51.37 53.31 48 48


37.78 36.26 38.47 41.58 33.08 28.33 39.34 34.22 39.83 30.33 24.81


40.24 40.61 45.69 45.37 39.4


46.97 36.35 35.72 45.3


43.87 43.84 40.06 40.17


dividends dividends 31.71 31.3


Non-eligible Capital gains


24


23.85 25.2


26.65 24.15 27


22.25 23.53 26.76 25.69 26.65 24 24


JUNE/JULY 2016 | CPA MAGAZINE | 53


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