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Old Age Security—Inquiry

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Statement made on 07 February 2012 by Senator Catherine Callbeck

Hon. Catherine S. Callbeck:

Honourable senators, I introduced this inquiry to make senators aware of a very unfair situation that exists in the old age pension program.

The subject matter of this inquiry came to my attention by a 62-year-old woman living in my province who had to stop working for health reasons. Her employer did not have a pension plan. She was finding it very difficult to exist on the savings she had been able to accumulate plus the small cheque she was getting from CPP.

The question that she asked me was why her next door neighbour could receive the OAS allowance and she could not. The neighbour was also 62 and had a similar income that was very low. However, the neighbour happened to be married.

When I looked into this situation, I discovered there is a very unfair aspect to this allowance. I found that a person who is married or in a common law relationship can receive the OAS Allowance if they are 60 to 64, if they pass a low-income test, and if their spouse is getting Old Age pension as well as the supplement. Furthermore, if their spouse has passed away, the other partner, aged 60 to 64, can get the OAS Allowance for the Survivor.

The unfair part is that single, legally separated or divorced people of the same age are not eligible for this allowance.

The Old Age Security Allowance was introduced in 1975. In order to be eligible, a senior must be 60 to 64 and the spouse must receive the OAS pension and the Guaranteed Income Supplement. Together they must be considered low income. The OAS Allowance can be worth up to a maximum of $1,021.65 per month. More than 60,000 low-income seniors receive this benefit.

The other allowance is called the Allowance for the Survivor and it was introduced in 1985. It is designed to help widows and widowers aged 60 to 64 who have a low income. The current maximum Allowance for the Survivor monthly benefit is $1,143.78 per month. Almost 30,000 surviving spouses receive this benefit.

I am happy that those two allowances are there because it means that many seniors can live in a more comfortable fashion. However, I am concerned that some seniors are left out, and they are the low-income, unmarried, divorced people, aged 60 to 64, who are not eligible to apply for the allowance.

Seniors often face serious hardships. In my home province, there are about 21,000 seniors over the age of 65. The Prince Edward Island Senior Citizens' Federation says that almost 40 per cent of them, more than 8,000 people, live on less than $20,000 a year. In fact, the average income of these seniors is $16,608.

Many studies show that unattached seniors, especially women, are the most likely to be poor. Yet, these people are not eligible for the OAS Allowance.

A national advocacy group for seniors, CARP, stated in its pre-budget submission last year that older women can and do face retirement with less income. The advocacy organization noted a number of reasons why this might be so. Their wages may be lower; women live longer than men and therefore may outlive their financial savings; and many women spend some of their working years providing informal caregiving services and are unable to build up adequate retirement income.

CARP recognizes the problem of poverty among senior women is greater because the OAS Allowance for people age 60 to 64 does not include individuals who are single, divorced or separated.

Other national organizations, including the Canadian Association of Social Workers, have advocated for expanding the OAS Allowance. They want it to go to all low-income persons age 60 to 64, and I agree with these organizations. This allowance should be equally distributed among Canadians.

Therefore, as I said, I agree with these organizations and I would urge the federal government to expand the criteria so that all low-income people aged 60 to 64 are treated fairly and that they can apply for the OAS Allowance.

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