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Old Age Security Essay

1928 words - 8 pages

The Canadian pension system, funded from the Government of Canada’s general revenues is comprised of three programs. The Old Age Security (OAS) program includes the basic OAS pension, the Guaranteed Income Supplement (GIS), and the Allowance for Survivors.(social work) Old Age Security provides benefits to Canadian residents at the age of 65 and who have resided in Canada for more than 10 years after age 18. To receive the full monthly benefit of $540.12, an individual must have lived in Canada for a period of 40 or more years after the age of 18. OAS benefits are not dependant on paid employment or the income of a spouse or partner. Individuals who earn more than $69, 562 will have ...view middle of the document...

It is forecasted that during the next two decades that the number of individuals over the age of 65 will increase substantially due to the aging baby boomers and an increased life expectancy, “by 2030, seniors will represent close to 25 percent of our population, compared to 14 percent in 2010 and in that same period the working-age population will barely grow at all”. The average life expectancy of Canadians has increased from 81 to 84 over the last three decades resulting from numerous enhancements to health care and the improvement to the overall standard of living. The increase in life expectancy has resulted in senior collecting OAS benefits for a longer period of time. Moreover, as life expectancy increases, additional government spending will be required as the demand for senior programs and services such as adequate health care and long term care grows which will be funded by a stagnant working population.
As the population ages and life expectancy rates increase, there will be more Canadian senior’s dependant on OAS benefits. In 2011, the OAS program cost approximately $38 billion and is expected to increase to $108 billion by 2030 which is an increase from 13 cents of every federal tax dollar spend currently on the OAS benefits to 21 cents of every federal dollar spend by 2030-31 (quote) making the current OAS program financially unsustainable for future generations. In other terms, this is an forecasted increase of 13 cents of every federal tax dollar spend currently on the OAS benefits to 21 cents of every federal dollar spend by 2030-31.
Increasing the eligibility age for OAS benefits would alleviate future tax strains on working Canadians. Currently, for every one senior receiving OAS benefits there are four Canadian actively in the work force, however, by 2030 this ratio will change as the senior population grows with two Canadians actively in the work force for every one senior receiving OAS benefits resulting in a greater tax burden for younger generations. (Reforming Old Age Security: A Social Work Perspective. 2012)
In order to ensure Canada maintains a strong economy and labour market, changes to OAS eligibility age must be made to adjust to an aging population. As the number of retirees increases over the next decade, the growth of the Canadian labour force will be the “lowest ever over the next 10 years (0.8 percent per year, in comparison with 1.6 percent in the previous decade)”. (Service Canada. 2012) The result will be a less Canadians contributing to the labour market affecting the growth of the economy.
The current political climate is ideal for policy change to the OAS. The 2008 global economic crisis resulted in governments reducing spending to balance budgets and eliminate deficits. The Canadian government, under Conservative leadership introduced the Economic Action Plan in March of 2012, focusing on eliminating Canada’s deficit by 2014-2015 and balancing the budget while stimulating economic...

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