Billions of dollars in benefits unclaimed by Canadians, report says
February 9, 2011. By Andrew Duffy, Ottawa Citizen
Billions of dollars worth of government benefits are going unclaimed by Canadians, according to a federal task force on financial literacy.
The 13-member task force found that Canadians are missing out on “substantial financial support” offered by the federal government. It noted:
• Roughly 160,000 eligible seniors do not receive the Old Age Security benefit, representing almost $1 billion in benefits
• Another 150,000 eligible seniors do not receive the Guaranteed Income Supplement
• About 55,000 eligible Canadians are not receiving Canada Pension Plan benefits
• Less than half (40 per cent) of eligible families have taken advantage of the Canada Education Savings Grant, a federal contribution to a Registered Educations Savings Plan (RESP)
• Only 16 per cent of eligible families have received a Canada Learning Bond; the program is designed to help low-income parents build an RESP through an initial $500 grant and $100 annual grants
• In any given year, about 31 per cent of eligible taxpayers make an RRSP contribution
A research report prepared for the task force examined why some government programs have such poor “take-up” rates. Those rates are considered an important measure of financial literacy.
The report concluded that language and poverty often present barriers, particularly when the programs or application forms are complex.
“Lower income Canadians face distinct financial literacy challenges in being aware of and accessing the very government programs that are targeted to them,” concluded researcher Richard Shillington.
The task force, which reported Wednesday, said the government should simplify its programs and application forms to ensure more Canadians benefit from the financial support to which they’re entitled.
The recommendation is one of 30 in the report, “Canadians and their Money”, which sets out a national strategy to raise financial literacy levels.
Improving Canadians’ money management is considered critical given the country’s mounting consumer debt and the large cohort of baby boomers who have not saved enough for retirement.
The report calls on the provinces to add financial literacy to school curricula and suggests that businesses make it part of workplace training programs.
Finance Minister Jim Flaherty received the report at a news conference held in the offices of Entraide budgétaire, a non-profit financial counselling service in Vanier.
Task force chair Donald Stewart, chief executive officer of Sun Life Financial Inc., said Canadians need more help in casting financial decisions.
“Some are small, others are critical,” he told reporters. “For most Canadians, making the right decisions, or putting them off entirely, can have a major impact on our financial well-being, even our health and happiness.”
Hélène Ménard, executive director of the Entraide budgétaire, said her office sees more than 600 people a year who have not filed income tax returns, even though the returns represent about five per cent of their clients’ annual incomes.
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