Ottawa should move to reform seniors’ benefits by letting recipients choose richer payments, later, from the Old Age Security and Guaranteed Income Supplement programs if they wish, says a report by C.D. Howe Institute president and CEO William B.P. Robson.
In What to do About Seniors’ Benefits in Canada: The Case for Letting Recipients Take Richer Payments Later, Robson says letting OAS and GIS recipients delay take-up—and rewarding those who do—could contain program costs. Robson says such reform would be less stressful to recipients than raising the universal eligibility age, and less discouraging than intensifying clawbacks.
Robson’s recommendations are modeled on the mid-1990s reforms to the Canada and Quebec pension plans and, he says, would give seniors greater financial flexibility. Potential recipients could start receiving benefits at age 65, as they do now, or wait and get benefits that were larger by 0.7% per month of delay. Those with little income subject to clawbacks and/or unable to work would start at 65 as they do now, and those willing and able to wait would forego benefits otherwise available at age 65, but collect more when they do start.