by Deb Schulte, Canada’s Minister of Seniors
Budget 2021 has helped to strengthen the financial security of Canadians later in life.
It announced two important measures. In August 2021, the government will issue a one-time $500 payment directly to seniors aged 75+ as of June 2022.
Then in July 2022, there will be a permanent increase to the Old Age Security pension by 10 per cent for seniors aged 75+. That’s worth $766 over the first year to pensioners receiving the full benefit and helps 3.3 million seniors. This measure is targeted for older seniors who are more financially challenged and who are worried about outliving their savings.
As they age, seniors face more health issues. Their healthcare expenses rise due to illness or disability: on average, out-of-pocket health expenses of those aged 80+ are over $700 a year higher than those aged 65-74. At the same time, most older seniors can no longer supplement their income with paid work. Few seniors work beyond age 75, and those that do have median earnings of only $720 a year.
The passing of spouses adds to the pressure. Among seniors, almost twice as many over age 75 are widows. And with women, on average living longer than men, it’s no wonder many senior women slip into poverty after the hardship of losing their life partners.
To help secure older seniors’ finances, the government of Canada is making the first permanent increase to Old Age Security since 1973, other than adjustments due to inflation.
For the youngest seniors, the age of eligibility for OAS is moved back to age 65. It was increased to age 67, under the government of Prime Minister Harper. Canada Pension Plan revisions have been made for future retirees, increasing the Guaranteed Income Supplement for single seniors.
The latest data shows that 11% fewer seniors live in poverty than in 2015.