Old Age Insecurity?

Posted on in Social Security Policy Context

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CaledonInst.org – Publications
February 2012.   Ken Battle, Sherri Torjman and Michael Mendelson

The controversy over raising the age of entitlement for Old Age Security from 65 to 67 is taking attention away from alternative possible reforms of that vital program, and of Canada’s pension system generally.  The allegation that Old Age Security will be unsustainable in future is more a political than a policy judgement, and the substantive evidence does not support it.

Low-income seniors will be hardest hit by increasing the age of entitlement for Old Age Security, since they rely on that program for most of their income and they have a lower lifespan than middle-  and upper-income Canadians.  If the federal government goes ahead with that ill-considered change, then at least it should provide an income benefit to poor seniors aged 65 and 66 so that they do not have to keep working or remain on welfare for two more years.  The mechanism for this already exists, in the form of an extension of the Allowance (which is part of the Old Age Security program).  The federal government could pay for this enhancement out of the billions it will save by raising the age of entitlement to 67.

The Caledon report puts forward other possible changes for public debate, including:

The focus on Old Age Security is important, but it threatens to deflect attention from the key to pension reform – boosting the Canada and Quebec Pension Plans.

< http://www.caledoninst.org/Publications/Detail/?ID=983 >

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