Cancelling the increase in the age of eligibility for old-age security benefits would raise total program expenditures by $10.4 billion by 2030, according to a report by the Office of the Superintendent of Financial Institutions.

The OAS program actuarial report, which must be prepared by the chief actuary when an amendment to the Old Age Security Act that affects the cost of benefits is introduced in the House of Commons, also found that the increase in GIS and allowance expenditures would be $315 million in 2016 and $775 million by 2020.

“Both amendments are projected to increase total program expenditures by $11.6 billion in 2030, which represents an increase of 0.33 per cent of GDP,” wrote Jean-Claude Ménard, chief actuary, in the report.

Have your say: Was the decision to return OAS eligibility to age 65 the right move?

The federal budget, tabled in March, confirmed that the age of eligibility for old-age security would be restored to 65. The government had proposed cancelling the provisions in the Old Age Security Act that increase the age of eligibility for OAS and GIS benefits from 65 to 67 and allowance benefits from 60 to 62 over the 2023-29 period.

The budget also proposed to increase the guaranteed income supplement top-up benefit by up to $947 annually for the most vulnerable single seniors starting in July 2016, a measure aimed at supporting those seniors who rely almost exclusively on OAS and GIS benefits and may therefore be at risk of experiencing financial difficulties.

The projected number of GIS and allowance beneficiaries who will receive the full or a partial additional top-up benefit is estimated to grow from 813,000 in 2016 to 925,000 by 2020, according to the report. It also found that cancelling the increase in the ages of eligibility would increase the number of beneficiaries of the OAS basic pension by one million.

Read: How does Canada’s public pension system measure up globally?

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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Frank Wiginton:

Old Age Security and GIS are meant to be social support program to reduce poverty among seniors. With the adition of income splitting, enhancing CPP, and eventually the TFSA – individuals but more so couples are able to have substantial incomes and assets throughout retirement while collecting FULL OAS. Maybe its time we take a different look at reforming OAS from the perspective of returning it to what it was intend – supporting low income seniors in retirement. look at this article “A Better Way to Reform Old Age Security here: http://info.employeefinancialeducation.ca/efe-blog/a-better-way-to-reform-old-age-security-oas

Monday, August 22 at 5:38 pm | Reply

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