Ottawa is proposing to double the amount of the pension income credit.

The federal government presently provides a non-refundable credit — if the taxpayer has no taxable pension income, the credit amount is not refunded — on the first $1,000 of eligible pension income. That amount will increase to $2,000 in 2006 and apply in subsequent tax years.

For individuals 65 and over, eligible pension income includes: lifetime annuity payments under a registered pension plan, a registered retirement savings plan or a deferred profit-sharing plan and payments out of or under a registered retirement income fund. For individuals under 65, eligible pension income includes: lifetime annuity payments under a registered pension plan and certain other payments received as a result of the death of the individual’s spouse or common-law partner.