Two-tiered benefit regime ignores reality of too many seniors

Recent history shows that Canadians don’t want the circumstances of seniors changed in any way that isn’t an improvement or seen as being fair. The strong, negative reaction to Stephen Harper’s short-lived increase to the age of retirement from 65 to 67 years old offered a glimpse into that. At that time, the response was swift, negative, and widespread.

With that in mind and a general acceptance that the Old Age Security (OAS) benefit needed to be increased so seniors who rely on it aren’t struggling to keep up as costs increase, it’s reasonable to assume any government would tread carefully when proposing changes. Especially changes that would hold some seniors back while helping others. Incredibly, that’s what is happening as the government ties together a pandemic benefit and an increased benefit for some OAS recipients – but not all of them.

As it is stands, the government has proposed two measures for a portion of OAS recipients. The first is a one-time $500 payment scheduled for August of this year that will flow to OAS recipients who will be 75 as of June 2022 (One full year from now). The second will be a 10% increase in amount of OAS that same age group will receive, but not until next year (2022). While seniors reliant on OAS have waited through the pandemic for assistance, these measures only address the needs of some recipients and sees others left behind and many waiting a full year for an increase they could use today.

As their plans came into focus, NDP MPs repeatedly told the government that all seniors 65 and up, not just those 75 and older, need help. We called for an increase OAS before the pandemic, which only made financial challenges more difficult for those reliant on the benefit. When pressed, the government has given little in the way of justification for their decision. Worse, they voted down an amendment to include all seniors in these proposed OAS increases, and even threatened to see it as a confidence motion with the threat of a snap election had the House passed it.

One notion that is difficult to separate from the issue is the effect poverty has on life expectancy. Studies show Canadian men ranked near the 80th percentile for earnings have a life expectancy of 83, while the lowest-income workers can expect to live to 75. The gap for women is narrower, with a life expectancy of 86 for the wealthiest as compared to 83 for the poorest. Those numbers are less shocking than an American study showing almost 15-years of difference in life expectancy for men and 10 years for women. In either country the sad reality is that impoverished individuals don’t live as long as wealthier ones. The inescapable conclusion when one looks at making people wait until age 75 for their OAS to increase is that the government is banking on attrition to limit some of those costs.

Unfortunately, the government’s plan for OAS recipients is consistent with their actions toward seniors since the election, and in particular during the pandemic. It took months to convince them that seniors needed financial support and it was only after pressure was applied by New Democrats that they changed their mind and agreed to the one-time payment.

But the challenges didn’t stop there, and we have spent the last year requesting that all seniors receive additional financial support during the pandemic. The government refused, offering just the one-time payment that will only flow to OAS eligible seniors 75 and older. This is unfair and it’s worrisome that the government is creating subsets of seniors in the process. Those who receive a full OAS, or “senior seniors,” and those who will have to wait a decade after retiring, or “junior seniors.” It is an imperfect solution to a well understood problem and if the past offers any suggestions, Canadians won’t embrace the change.