I will look at the budget over the next few days and offer some views. Today I want to focus on Old Age Security or OAS for short. The Harper government have decided that anyone aged 53 or younger will have to wait until they are 67 instead of 65, to qualify for OAS.
OAS is paid to every Canadian, in the case of well off Canadians the money is partially clawed back. Lower income Canadians also qualify for the Guaranteed Income Supplement (GIS). GIS is meant to raise incomes for retired people to a minimum level. To qualify for it, you must also be in receipt of OAS. The conservatives have just raised that age two years, thus also denying Canada's least well off seniors to wait two more years to collect GIS. A double whammy.
Currently OAS and GIS contribute 30% of seniors overall income in Canada. The two programs contribute 70% to those seniors earning $15,000 or less each year. Raising the age is going to require these low income seniors to work longer, save more. The problem is that if your income is already low, or you have a disability you can not save. Most of your income goes to paying for food and shelter.
Many people in their 60's are in poor health or as we all know too well, looking after another person their age or older. This negates their ability to earn the money required to save anything for retirement. Provincial Governments are going to have to pick up some of the slack with social assistance and disability funding, for an additional two years.
So why are we doing all this? The Parliamentary Budget Officer suggests that there is no looming funding crisis for OAS. Currently this money amounts to 2.36% of the GDP. It is forecast to grow to 3.14% of GDP by 2030 and fall off sharply after that. Additionally, we should also realize these benefits pay back 25% in taxes by those that receive them.
So the questions is, why is the Conservative Government doing this?