Walking on eggshells – proposed pension reform
I have felt for many years that a senior widow/widower loses an inordinate amount of income.
They lose their late spouse’s OAS entirely, and their CPP survivor benefit is only 60% of their late spouse’s CPP (and the maximum CPP benefit is now only $1,070, subject to the annual CPI increase).
Thus, being a single or widowed senior is financially difficult, especially if your income is largely pension-based.
Before the recent federal election, the Conservative Party unveiled the Single Seniors Tax Credit, to start in January 2017. The credit will be phased in over four years. The tax credit is estimated to save eligible seniors about $300 per year in taxes.
This credit is a step in the right direction. However, there are no easy answers to the question of how to increase vulnerable seniors’ incomes.
The numbers of Canadians over age 65 is climbing fast, and as more and more people (thousands each month now) apply for and receive pension benefits, the costs of our CPP and OAS also rise fast. The CPP is funded, but the OAS is not.
Today, our contributions to the CPP exceed payouts, but that is expected to change within the next five years.
A wholesale increase in CPP benefits is not necessarily a long-term answer. More study is needed to answer this complex issue.
This ad originally appeared in the Richmond News on September 18, 2015.