The idea of illustrating the generosity of socio-fiscal programs using the example of a single mother with six children never occurred to me because it is so unlikely. It seems to be agreed with the viewer.
However, this is precisely the situation of a union member of the Autonomous Federation of Teachers (FAE) who spoke in the “pages” of La Presse last week. She explains her difficult financial circumstances, her responsibilities as a mother, her family context, her expenses and the rest of her teacher salary.
I would like to point out that this is not about lecturing the author or criticizing her approach. She accuses her union of failing to offer its members a safety net in the event of a prolonged strike.
The teacher reiterates that, in her particular situation, her income is not enough to build an emergency fund, as the FAE leaders had recommended (just as I did in this column). She picked up a pen to tell her story.
On the day of publication, the statement escaped me. It seems it got people talking. It was an intervention on LinkedIn by Luc Godbout, Professor of Tax at the University of Sherbrooke, that led me down this path.
He noticed that the teacher underestimated her income, like many parents who focus on salary and forget about family allowances. How much? In the case of a single mother of six children, this is shocking. You'll see further. For a French teacher who boasts in the media that she knows how to use a calculator, the omission seems a bit big to me.
The holder of the research chair for taxation and public finance was not interested in blaming the striker, but rather in exposing the “paradoxes of taxation”. First paradox: With an individual income that places you among the privileged, you can benefit from the generosity of the welfare state.
Let's summarize: secondary school teacher with more than 20 years of experience and mother of eight children, six of whom are completely dependent on her. The siblings include two twins aged three. The lady deserves support and a medal.
She makes no secret of her salary as a teacher; it is already known to the public: $92,027. After all deductions, including her union dues, she is left with $2,200 per fortnight, she states in the newspaper.
Luc Godbout roughly assesses other elements of the situation. The teacher donates $1,500 annually to her union, contributes $7,300 to her retirement plan, pays $1,300 in group insurance premiums, pays $5,270 in Social Security contributions (RRQ, AE, RQAP), and $19,800 in helmet tax . So disposable income: $57,000.
For such a large family, the costs are correspondingly high and are disclosed in La Presse: $2,574 rent, $395 electricity per month, $400 gasoline. Without naming them, she says she spends a fortune on her little twins, who attend an unsubsidized daycare center.
The situation seems extremely unfavorable, especially since our protagonist avoids the costs of clothing, toys, sports activities, vacations, etc.
As you already know, there is also a lack of income. Assuming that the six children for whom she was solely responsible were minors, the teacher would receive $50,000 in family allowances, tax-free, according to Luc Godbout.
Yes, but do they have to eat up a good portion of his private daycare costs?
The invoice amount is not stated. The scientist used this hypothesis: $10,000 per year per child, for a total of $20,000. Here another paradox manifests itself. In the completely atypical situation in our case, the childcare costs are more than compensated by the state.
In other words, sending your children to unsubsidized child care increases the mother's disposable income. Quebec offers a 70% tax credit on the daycare bill. The entire $20,000 she pays is deductible at the federal level ($8,000 per child under seven, $4,000 per child seven and over).
These deductions reduce your tax burden, increase your Canada Child Benefit amounts and increase your GST tax credit.
It would be less financially advantageous for her if her twins attended a subsidized daycare center, emphasizes Luc Godbout.
In her testimony, the teacher ignores approximately $51,000 of tax-free income (including the GST credit) if all descendants are minors. In total, the mother would have a disposable income of $108,000.
The most ironic thing is that although it is fighting not to lose its purchasing power, the allowances and loans it receives are fully linked to inflation, that is, 4.8% for the federal share and 5.08% for the provincial share in January.
Automatically, without striking.
If you would like to respond to this column, write to us [email protected]. Some answers may be published in our Opinions section. If you would like to contact our columnist directly, you can do so at [email protected]..