Question Period Note: OLD AGE SECURITY/GUARANTEED INCOME SUPPLEMENT – AGE ELIGIBILITY

Given population aging, we should be trying to increase the age of retirement. Why did you restore the age of eligibility for Old Age Security to 65?

• Our Government is committed to strengthening public pensions and improving the lives of Canada’s seniors.

• We therefore restored the age of eligibility for the Old Age Security pension and the Guaranteed Income Supplement to age 65, which will put thousands of dollars into the pockets of Canadians as they become seniors.

• These benefits are an important part of the retirement income of Canadians, particularly lower-income seniors.

• Vulnerable 65- and 66-year-old seniors depend on this support, and without it, would have faced a much higher risk of living in poverty, which is not acceptable.

In 2012, the Old Age Security Act (OAS Act) was amended to gradually increase the age of eligibility for the OAS pension and the GIS from 65 to 67, starting in April 2023, with full implementation by 2029. Similar provisions were included to increase the age of eligibility for the Allowances from 60 to 62. The Allowances are paid to low-income individuals aged 60 to 64 who are the spouses or common-law partners of GIS recipients, or who are widows or widowers.

In 2015, the Minister of Families, Children and Social Development was mandated to “work with the Minister of Finance to improve the income security of lower income seniors living alone by increasing the GIS by 10 percent, indexing OAS and GIS payments to a new Senior’s Price Index, cancelling the increase in age of eligibility for OAS (65 to 67), and working with provinces and territories to ensure adequate and coordinated support programs to address seniors’ poverty.”

Budget 2016 amended the OAS Act to restore the age of eligibility for the OAS pension and the GIS to 65. An increase in the age of eligibility would have had an adverse impact on vulnerable seniors, especially 65- and 66-year-olds who would no longer receive OAS benefits. An Employment and Social Development Canada (ESDC) study shows that approximately 20 percent of 65- and 66-year-olds rely on OAS/GIS benefits for a majority of their income. ESDC estimates also show that the number of seniors living in low income in this age group would have risen significantly with the increase in the age of eligibility.

The Chief Actuary projects that OAS program expenditures will increase from $82.9 billion in 2024 to $136.6 billion in 2035 and $276.5 billion by 2060.

The ratio of program expenditures to the GDP is projected to increase from 2.73% in 2024, to a high of 3% in 2033.Thereafter, the ratio is projected to gradually decrease to a level of 2.64% in 2060.

“CARP welcomes Prime Minister Justin Trudeau’s announcement of the roll back of OAS eligibility to 65. CARP is delighted to see action on a promise that was made during CARP’s Annual General Meeting in 2014.”

• CARP, March 18, 2016, News Release