I know many seniors have been asking one question recently – will my Old Age Security cheque stay the same?
Many Canadians close to retirement have also been asking whether Old Age Security will be there for them when they reach 65.
The answer to both questions is yes.
Our government is committed to protecting retirement income for today’s seniors, and for future generations of retirees.
Canadians receive retirement income from a variety of sources, including the Canada Pension Plan and Old Age Security.
The Canada Pension Plan is funded by premiums from each of our paycheques and it is on a safe, secure, and sustainable path.
Old Age Security, on the other hand, is funded from general government revenue and is not sustainable in its current form.
When Old Age Security was introduced in 1952 the age of eligibility was 70. The life expectancy at the time was 66 for men and 71 for women.
The age of eligibility for Old Age Security changed in 1965 from 70 to 65. The age expectancy at that time was 68 for men and 75 for women.
The age of eligibility for Old Age Security today is 65. Life expectancy is 79 for men and 83 for women.
In 1975 there were seven working taxpayers for every senior. Because our population is getting older, today there are only four working-age Canadians for each senior. By 2030, the total number of seniors will nearly double, leaving only two working-age Canadians for each senior. Amidst these changing demographics, the annual cost of the Old Age Security program is projected to increase from $36 billion in 2010 to $108 billion in 2030.
To put it another way: the cost of Old Age Security in 2030, in today’s dollars, will increase by an amount greater than total federal transfers for health care in 2011.
If changes are not made to the Old Age Security program, it will become unsustainable in the long-term. Failure to make important decisions now will put the program in jeopardy for future generations.
I can guarantee you that any changes to Old Age Security will never affect anyone currently receiving benefits, nor will they ever affect any individual now nearing retirement. Other Canadians, who are not near retirement, will receive substantial notice of changes to Old Age Security, to ensure they have ample time to plan for their future.
Our government will take responsible action to ensure financial stability for future generations of seniors and give them confidence that Old Age Security will be sustainable and available to them in their retirement.
Canada is one of only two nations that have not adjusted its OAS plan to ensure sustainability into the future.
Our government is committed to protecting retirement income for today’s seniors, and will make sure that Old Age Security benefits are available to future retirees too.
We will do what nearly every other advanced country has done – we will ensure the sustainability of our public pension system.
Our government is taking care of our seniors.
Since 2006, we have: increased the Guaranteed Income Supplement for the most vulnerable seniors; introduced pension income splitting and increased the age credit and introduced innovative new programs such as the tax-free savings account to help Canadians save for retirement.
As a result of our actions, seniors can individually earn approximately $19,000 per year or $38,000 as a couple before paying federal taxes.
Pension discussions have been on-going in Canada and have also resulted in a Bill that is currently being debated in the House of Commons that will see Pooled Registered Pension Plans established throughout the country.
PRPPs will provide an opportunity for the self-employed and for those who currently do not belong to a pension plan, to participate in pension savings.
I recently presented a speech on PRPPs in the House of Commons that you can read on my web site at www.gordbrownmp.ca.
This is just the latest step we are taking to ensure that Canadians will be able to live a fulfilling life in their retirement.
If you have any questions about this or any other issue, please feel free to contact my office.