Deb Schulte
Hon. Deb Schulte
Member of Parliament for King—Vaughan
Old Age Security increase gives help for extra needs later in life
May 13, 2021

After Budget 2021 proposed the first real increase in Old Age Security in almost half a century—other than regular adjustments for inflation—an opinion letter in the Debates section of La Presse from a seniors organization suggested that targeting the increase at older seniors flew in the face of both evidence and justice.  That gets it wrong on both counts, and as Minister of Seniors, it is important for me to explain why.

Budget 2021 strengthened Canadians’ financial security later in life with two key measures.

In August 2021, we will issue a one-time $500 payment directly to seniors aged 75+ as of June 2022.

Then in July 2022, we will permanently increase the Old Age Security pension by 10 per cent for seniors aged 75+. That’s worth $766 over the first year to pensioners receiving the full benefit.

The increase was targeted at older seniors who are more financially challenged. Despite the column in La Presse claiming that seniors of all ages face the same costs, the facts show otherwise.

As they age, seniors face more health issues. Their healthcare expenses rise due to illness or disability: average out-of-pocket health expenses of those aged 80+ are over $700 a year higher than those aged 65-74. At the same time, most older seniors can no longer supplement their income with paid work. Few seniors work beyond age 75, and those that do have median earnings of only $720 a year.

As couples age, the passing of spouses adds to the pressure. Among seniors, almost twice as many over age 75 are widows. And with women living longer than men, it’s no wonder many senior women slip into poverty after the hardship of losing their life partner.

This all makes it harder for older seniors to make ends meet, and explains why far more older seniors qualify for the Guaranteed Income Supplement, which supports the lowest income seniors.

And it’s why we’re increasing Old Age Security for older seniors: it gives help for extra needs later in life.

It’s part of our government’s plan to strengthen everyone’s retirement security. While there is no one solution that meet everyone’s needs, step by step we are making progress.

For the youngest seniors, we restored the age of eligibility for Old Age Security to 65 after the Harper Conservatives raised it to 67. That put thousands of dollars back into the pockets of those affected.

For the most vulnerable seniors, we increased the Guaranteed Income Supplement by 10 per cent for singles, improving the financial security of 900,000 seniors. We’re also investing $70 billion through the National Housing Strategy to help more people find an affordable place to call home, including seniors.

For future retirees, we are gradually increasing the Canada Pension Plan’s maximum yearly benefit by 50 per cent, a changed that was mirrored by the Quebec Pension Plan. That meaningfully reduces the risk of not saving enough for retirement.

To help everyone, we are reducing income taxes. When reductions are fully implemented in 2023, 4.3 million seniors will benefit, including 465,000 whose federal income tax will be reduced to zero. Every year, singles will save close to $300 and couples will save nearly $600.

Together these changes reinforce our social safety net.

All this progress can’t be taken for granted. Conservative leader Erin O’Toole said that raising the age of eligibility of Old Age Security was a “modernization”.  He called strengthening the Canada Pension Plan a “sham.”

Mr. O’Toole is following the long tradition of Conservatives who oppose policies that strengthen the retirement security of the middle class and all those working hard to get there. It was Liberal governments that created Old Age Security, the Canada Pension Plan, RRSPs and the Guaranteed Income Supplement—the pillars of Canada’s public retirement income system.

There is more work to do. Seniors can always count on Liberals to listen, understand their needs and work hard to deliver for them.

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