Our government is committed to ensuring the retirement security of Canadians.
In Canada, there are two important programs that provide financial support to older Canadians: CPP and OAS.
CPP is funded through premiums that working Canadians pay with each paycheque (matched by their employer) and the CPP fund has approximately $160 billion available for benefit payments to retirees.
The CPP principle is secure for at least 70 years. The OAS is funded primarily through taxes on working people and is unsustainable in light of our aging demographics.
When OAS was implemented in 1966, the age for eligibility was 70.
At that time, our life expectancy was 72 for women and 69 for men.
The age for eligibility was lowered to 65 in 1971.
Now, 40 years later, Canadians are living 15 to 20 years longer and the eligibility age for OAS is still set at 65.
The monthly OAS is given to low-income seniors as a supplement to their Canada Pension Plan.
A monthly Guaranteed Income Supplement (GIS) is also available for those earning less than $39,264.
Last July our government hiked GIS for seniors with little or no income, other than the Old Age Security, by up to $600 per year for single seniors and up to $840 per year for couples.
No decision has been made on OAS, but if a decision is made to raise the retirement age from 65 to 67, it would have to be phased in.
The cost of the OAS program will increase from $36 billion per year in 2010 to $108 billion per year in 2030.
Something has to be done. Remember, all OAS benefits are paid by taxpayers.
I want to re-assure all seniors that they will continue to receive all the benefits they currently receive.
We will ensure any changes are done with substantial notice and adjustment period and in a way that does not affect current retirees or those close to retirement.
This gradual phasing-in of changes will give Canadians plenty of time to adjust and plan for their retirement.
Colin Mayes, MP – Okanagan-Shuswap