The OAS bonus is being given to well-off seniors. As more and more affluent Boomers retire, that’s going to put a strain on federal finances.
(Note that OAS is different from GIS, which is available to low income seniors)
Last year, the Liberals boosted OAS by 10 per cent for seniors 75 years and older, claiming it would help poorer senior citizens. That claim is nonsensical – if the government wished to help poor seniors, it already has a tailor-made program at hand: the Guaranteed Income Supplement. (The income cutoff point is much lower than for the OAS, just $21,456 for individuals.) Any OAS reform should start with scrapping that 10-per-cent increase and targeting those funds narrowly to low-income seniors who receive the GIS.
Last year, the federal government spent $69.4-billion on elderly benefits. That will jump to $101.3-billion in fiscal 2029.
Clawbacks of the benefit ($8,492 a year) start when an individual’s taxable income reaches $81,761 but even those making up to $134,626 receive reduced payments, or $137,331 for seniors over 75 whose OAS entitlement is increased by 10 per cent. For individuals who deferred receiving OAS in exchange for higher monthly payments, that ceiling is considerably higher, around $170,000. And those clawbacks are assessed on an individual, not a household. A household made up of two seniors eligible for the maximum OAS could have a combined income of about $340,000 and still receive a small monthly payment from Ottawa.
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It makes more sense when you consider seniors are among if not the most active voting bloc.
Where can we get the best official demographics, it must be enumerated somewhere?
StatsCan and Elections Canada produce pretty reliable numbers.
Ok
I was hoping to click on that and just see a picture of someone’s grandma.
Thanks
The wording of this borderline deceptive. OAS has a reasonable threshold at which the clawback starts, and by the time you get to the top end, the clawback is very close to 100% of the benefit. So those seniors up near $134K are getting like $20/month. It’s not nothing, but it’s not worth all the angst here.
The $179K threshold is for those who deferred the benefit, so they’ve had years of zero benefit earlier on. Which is a gamble that you’ll live long enough to make up the difference.
Also, remember that these numbers are all AFTER the benefit is included. So a senior at the lower cutoff is actually making $73K before the benefit.
Also, also, remember that all of these amounts are taxed as income. So that senior at $73K pre-benefit is going to be taxed at the highest rate for the benefit.
Even so, it would still have made more sense to give additional benefits through GIS instead of OAS.
So those seniors up near $134K are getting like $20/month. It’s not nothing, but it’s not worth all the angst here.
We’re going to be hitting another austerity cycle soon. IMO it’s worth talking about who needs benefits, versus who is getting them.
it would still have made more sense to give additional benefits through GIS instead of OAS.
Agreed.
it’s worth talking about who needs benefits, versus who is getting them.
It’s hard to mess with this stuff and take things away because these amounts are part of people’s retirement planning. People and the upper cut-off probably wouldn’t care because they get so little, but if you start messing with the low end of the clawback range, then you start to cause problems.
People and the upper cut-off probably wouldn’t care because they get so little, but if you start messing with the low end of the clawback range, then you start to cause problems.
I fully agree. The problem is at the upper end. We can and should help people at the lower end.
Yep, its absolute bullshit. I say this as someone who can and will benefit from exactly that
and its trivial to solve for. i hate these ‘oh noooes whatever will we do with this minor issue everyone is butthurt about’ when its a line item in a tax bill/policy.
I agree, I think whats happening when people wring their hands screaming “but muh cost of enforcement?!” Is bullshit, disclose or apply it at tax time automatically and if people fuck around and play games they can go to prison for a month
Boomers are worst astroturfers right?!
This is the best summary I could come up with:
Ottawa is starting to feel the pinch of its fiscal handcuffs this year, as flagging revenue growth and surging debt costs limit the spending propensities – or at least ability – of the Liberals.
That is partly true as well for elderly benefits, the government’s inelegant name for Old Age Security and Guaranteed Income Supplement payments, which are set to rise sharply as Canada’s population of retirees steadily increases.
Remove age from the equation for a moment, and answer this question: what conceivable reason is there for Ottawa to be sending monthly cheques to households with annual incomes approaching $340,000?
Clawbacks of the benefit ($8,492 a year) start when an individual’s taxable income reaches $81,761 but even those making up to $134,626 receive reduced payments, or $137,331 for seniors over 75 whose OAS entitlement is increased by 10 per cent.
A household made up of two seniors eligible for the maximum OAS could have a combined income of about $340,000 and still receive a small monthly payment from Ottawa.
But the government and well-off seniors need to realize the fundamental unfairness of ramping up income subsidies to rich households as federal finances become increasingly constricted.
The original article contains 758 words, the summary contains 195 words. Saved 74%. I’m a bot and I’m open source!
Being upset about that small benefit going to people who already have some money is nothing but crabs in a bucket mentality.
Do you complainers not want to have income security when you get old too? This is a good thing for those old people. There are plenty of other more serious issues to be concerned about.
I don’t want it if I don’t need it. Considering where this country is at with housing, education, transportation, food, etc. I think those billions going to well off seniors rather than back into communities that will make life better for everyone is fucked.
Yeah, but it could have gone to just seniors that need it, without any additional complexity.
All that is necessary is to update the TaxCode so individuals do all the work to self-police and take on legal liabillity if they lie. Then CRA just has to update their internal calculations, this is not anywhere near a complicated or precarious problem to resolve.
Exactly. Nevermind all the corporate tax evasion, let’s focus on seniors bringing in triple-digit benefits a month!
It matters when people on welfare get extra, why not welfare/UBI for the old+rich?
