In addition to the consequences of the impending Family Tax Cuts, it’s just too bad these families will also lose their recently-enhanced $10,000 TFSA contribution limit, which the Liberals are proposing to roll back to a $5500 limit. Leveraging those extra dollars in tax-free savings plan would have served to build a more significant private retirement fund for astute savers, no matter what their family situation.

Following are some sample scenarios, showing how the tax changes to come as a result of the election will affect various family financials. Be sure to check out other year-end planning scenarios with a free trial of Knowledge Bureau’s 2015 Income Tax Estimator.

Scenario 1: Couple with one earner, salary $85,000. Two children, one over 6, one under.

Conclusion: The savings due to the anticipated changes to the CTB (Child Tax Benefit), outweigh loss of UCCB and Family Tax Cut. Those families with one stay-at-home parent do not see as much improvement as those families where both parents are working, as shown below.

Scenario 2a: Couple, equal salaries of $42,500 each ($85,000 combined). Two children, one over 6, one under.

Conclusion: Savings due to extra CTB significantly outweigh loss of UCCB.

Scenario 2b: Couple earning $30,000 and $55,000 ($85,000 combined). Two children, one over 6, one under.

Conclusion:  Savings, mainly due to CTB, outweigh loss of UCCB and net tax increase from loss of Family Tax Cut, but overall tax savings are not as great as they are when incomes are equally split.

Scenario 3: Couple one earner, salary $40,000. Two children, one over 6, one under.

Conclusion: Significant win due to large increase in CTB – outweighs loss of UCCB. Small tax cut due to loss of UCCB.

Scenario 4: Couple earning $225,000 ($85,000 and $140,000). Two children, one over 6, one under.

Conclusion: This couple suffers a net tax cost because UCCB is lost, mitigated somewhat by middle tax bracket rate cut.

Scenario 5: Retired couple with $71,000 income ($20,000 and $51,000, includes $20,000 qualifying pension income).

Conclusion: No change because Pension Income Splitting puts both spouses in lowest bracket so no benefit from rate cut. Deciding not to split would not help because the higher-income spouse would pay tax at a higher rate.

Scenario 6: Single person earing $70,000.

Conclusion: Small tax savings due to 1.5% rate cut in middle tax bracket.

Scenario 7: Couple earning $115,000 ($35,000 and $80,000). No kids.

Conclusion:  Tax saving due to rate cut in middle tax bracket.

Scenario 8: Single person earing $250,000.

Conclusion: Net tax increase because 4% increase in tax on income over $200,000 exceeds 1.5% cut in middle tax bracket.