What the Budget Means for You

Federal politics has gone a bit mad these days. Tuesday’s budget didn’t help matters: it looks like NDP leader Jack Layton won’t support the document and there could be an election, and soon.

So what does that mean for the actual budget itself? It means that while some of the brand new programs and funding increases you’ve been hearing about may soon make a difference to your wallet, some could get scrapped if a new government takes over.

Too early to tell. But in the meantime, let’s go through the budget and see what changes might have an impact on you and your family when (and if) it is passed.

For families with kids, the big news is the creation of the Children’s Arts Tax Credit. You can claim up to $500 a year for costs related to things like music and dance lessons. It’s a nice compliment to the $500 you can already write off for fitness-related costs such as swim lessons and hockey fees, an incentive introduced in 2007.

Also getting buzz is the extension of the ecoEnergy Retrofit Program to 2011-12. This is a big deal for people like me, who just bought a drafty old house and would like some financial support to get it fixed up. The program offers grants for up to $5,000 to make your home more energy efficient. Get more information from Natural Resources Canada. (Warning: information on the program is scant, even on the site, as the program is currently accepting no new applications. Keep checking back, as when this budget it passed, that should change.)

If you spend time caring for a family member such as an ill parent, spouse or child, this budget has something for you. The new Family Caregiver Tax Credit lets you write off $2,000 (and get $400 back) starting in 2012.

Also, the Medical Expense Tax Credit will have its upper limit of $10,000 removed for expenses related to a family member, allowing you to write off more medical costs if you’re a caregiver.

Again for the sandwich generation, low-income seniors in the family could be better off if this budget goes through thanks to a top-up of the Guaranteed Income Supplement. Single seniors will get up to $600 more a year while couples get $840 more as of July 1.

Recent history has showed us that tight regulation in the financial industry is a good thing. To that end, the government is proposing a ban on unsolicited credit card cheques. These cheques, which your credit card company periodically mails to you, certainly play a role in household debt. As soon as you write one of these cheques, you start accumulating interest, often at a high cost.

As well, the budget is suggesting new rules for pre-paid credit cards. They’re often marketed to families to set students up with credit, but they offer extremely high interest rates.

And here are some other budget changes that could impact your family:

• Full-time students can now earn more and still be eligible for student loans, plus a higher family income threshold will be used to determine who gets loans.

Registered education savings plans (RESPs) will see slightly different rules that are great for families — especially big families. If one child does not attend post-secondary education, the funds from his or her RESP can be rolled over into another sibling’s account.

• Students who are studying to be a doctor or nurse can get some student loan forgiveness if they opt to work in a rural community. Young doctors can lob up to $40,000 off a loan, while nurses can be forgiven up to $20,000, all starting next year.

• The mandatory retirement age of 65 for federally regulated employees is being eliminated.

This little-bit-of-everything budget means numerous changes that might impact you and your family in small ways. It also means, probably, the end of this minority government. Which means uncertainly for all this budget’s promises. Stay tuned: you may hear more about politics and your money over the next few weeks!

Writer for RateSupermarket.ca

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