Give seniors benefits they are owed
TheStar.com – columnists – Give seniors benefits they are owed
March 24, 2008
While Members of Parliament play a relentless game of electoral chicken in the House of Commons, their counterparts in the Senate are churning out well-researched reports on practical issues.
They have just released an analysis of the Canada Pension Plan, the government’s retirement income program for workers.
The CPP, as it is commonly known, is in its 43rd year. Every Canadian over the age of 18 with employment earnings must pay into the plan. In turn, every contributor is entitled to a monthly retirement pension.
But the Senate Finance Committee discovered that 26,000 seniors are not receiving the benefits they are owed.
Some are not aware that they have to apply. Others, for reasons of health, language or illiteracy, are incapable of applying.
A disproportionate number of these missing pensioners are women. Many don’t realize they’ve built up pension credits. They assume they lost their eligibility when they dropped out of the labour force to raise children or care for aging relatives. Others counted on their late husbands to manage their financial affairs.
It would cost the government almost nothing to solve this problem. CPP payments don’t come out of the federal treasury. They are withdrawn from a $121 billion fund administered by the Canadian Pension Plan Investment Board, an independent Crown corporation. Ottawa’s only expense would be the cost of an effective outreach program to seniors who have not applied.
The goal of ensuring that all contributors get their benefits is achievable. The government of Quebec, which operates its own parallel pension plan, has an almost 100 per cent take-up rate.
It does two things differently than Ottawa:
* It makes sure seniors know about their pensions. Provincial officials phone individuals who have not applied for their benefits, visit their homes and help them fill out the necessary forms.
Federal bureaucrats recently stepped up their efforts. They launched a notification blitz in 2006, sending out 20,000 letters to seniors who had not applied for their CPP benefits. The response rate was a dismal nine per cent.
* It gives applicants a five-year grace period. That allows pensioners plenty of time to submit their claim. They are entitled to a retroactive payment of up to 60 months.
Ottawa’s grace period is 11 months. Federal officials consider this reasonable. They see no reason why seniors who let years elapse between their retirement and their CPP application should be able to collect a large backlog of unclaimed benefits.
That is unacceptable, the senators said. “We need to remain on this issue until the Canada Pension Plan can boast of near 100 per cent take-up rates,” said Liberal senator Catherine Callbeck, former premier of Prince Edward Island.
The senators urged the government “to examine new ways to reach eligible Canadians who are not yet receiving their Canada pensions.” They also recommended a more generous grace period.
This might sound like a small issue. But for the 26,000 seniors who are losing their monthly benefits â€“ which range from a few dollars to $885 â€“ the stakes are significant. The foregone income could affect their diet, their choice of accommodation or their ability to deal with chronic diseases.
The Senate study also raises broader questions: How many “small issues” are falling through the cracks, while MPs engage in partisan jousting? How many fixable problems are going unsolved? Who is looking out for the interests of Canadians, while their elected representatives lurch from one manufactured crisis to the next? What happened to the idea of responsible government?
Regrettably, Parliament’s upper house doesn’t get much attention in Ottawa.
It’s too slow-paced, too collegial and too peripheral to the daily political drama.
But to Canadians who are tired of political brinksmanship and weary of squabbles that have nothing to do with their lives, it is a relief to know there is an oasis of civility in Ottawa where work is still getting done and public officials are being held to account.