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. The government is committed to protecting retirement income for today’s seniors, and for future generations of retirees.
We have taken important steps to support seniors, including:
- Increasing the Guaranteed Income Supplement for the most vulnerable seniors by $600 per year – the largest increase in 25 years. This measure improved the financial security and well-being of 680,000 seniors across Canada.
- Reducing taxes by introducing pension income splitting and increasing the age credit.
- Introducing innovative new programs such as the tax-free savings account and the PRPP 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.
As well all know, 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. In 1975 there were seven working taxpayers for every retired Canadian. Because our population is getting older, today there are only four working-age Canadians for each senior.
By 2030, the total number of retirees will nearly double, leaving only two working-age Canadians for each retiree. 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. In short, the cost of Old Age Security is going up quickly and the number of working Canadians to pay for it is going down significantly. 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.
David Wilks is the Member of Parliament for Kootenay-Columbia. You can contact him at:
100 – B Cranbrook Street North, Cranbrook, British Columbia V1C 3P9
or via e-mail at email@example.com