Harper Government Threatening Cuts to Pensions
Jan 27, 2012
alternatives, davos, oas, supplement, threaten
Prime Minister Stephen Harper is attempting to deflect increasing criticism over his recent comments about planned cuts to government-funded pensions by saying his government will delay their implementation.
At the World Economic submit in Davos, Switzerland, Harper claimed that it’s necessary to confront the challenge of an aging population. Although he was short on details he did indicate that he plans to make the Old Age Supplement (OAS) program more “sustainable.”
He did not spell out what this will mean but he then went on to address Canada’s retirement systems, noting that the Canada Pension Plan is “fully funded, actuarially sound and does not need to be changed.”
However, he then added that “for those elements of the system that are not funded, we will make the changes necessary to ensure sustainability for the next generation while not affecting current recipients.”
What exactly does this mean? Well, it might very well include decreasing the salary level at which OAS deductions start from $65,562 to $50,000, and/or increasing the age a person will receive OAS from age 65 to age 67, and /or reducing the indexing (OAS is currently increased based on the full Canadian CPI).
Either of these last two moves (the increase in age or the reducing of indexing) will have the biggest impact on the poorest of Canadian seniors. Any seniors where the majority of their retirement income is made up of Old Age Security and the Guaranteed Income Supplement (you must be in receipt of OAS to be eligible to receive GIS) will see a reduction in their already low income.
One of the things that Canada had been proud of is that due to our OAS and GIS we have had a smaller percentage of seniors living in poverty than any other age group. To attack low income seniors is to attack a very vulnerable group, as they have no way to make up a decrease in their income. And to make it so those that are in the lowest wage brackets have no choice but to work an additional two years is mean spirited.
To make this announcement while speaking to billionaires in Switzerland just adds insult to injury.
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