Inside The Markets:- RRSPs
Source: Manulife Financial, October 25,2000
Title: Using Term Account to claim Pension Income Credit

Some ideas are such simple and effective door openers that we may forget

to consider them. The Pension Income Credit is one such idea.

All persons 65 years of age or over are entitled to deduct, from taxes

payable, a tax credit for qualified pension income up to $1,000. Qualified

pension income can come from sources like RRIF payments or RRSP annuities -

normal interest or employment income is not eligible. Unlike GICs sold

through banks and trust companies, Manulife Term Account earns interest

that is reported as "annuity income". This type of income is eligible

income for the pension income tax credit.

If you have a client that is over age 65 that is not currently receiving

RRIF payments or a pension, investing in a non-registered Manulife Term

Account may be an easy way to start generating qualified pension income.

Depending on the provincial tax rates the combined tax savings could be

$240 or more.