An Emerging Issue: Old Age Security (OAS) and Raising the Age of Eligibility

Memo

To: All Members of Parliament
From: Tony Dolan, National Chairperson, Council of Canadians with Disabilities
Re: An Emerging Issue:  Old Age Security (OAS) and Raising the Age of Eligibility
Date: March 21, 2012

Most Canadians are aware of the comments of the Prime Minister and Minister of Human Resources and Skills Development Canada in regard to increasing the age of eligibility for the Old Age Security from 65 to 67.  CCD recognizes that this change is being contemplated for a variety of reasons and that if such a significant policy change were to occur, it would likely be implemented over time.  What CCD questions is whether policy makers have considered the impact this change will have on Canadians with disabilities? Raising the age of eligibility for OAS will prolong the poverty of Canadians with disabilities.

Below are some of the key comments and questions to be considered.

Points for consideration:
 

1. Canadians with disabilities disproportionately live in poverty.  Between 45 and 60 percent of those living on social assistance (welfare) are persons with disabilities, and this number continues to increase.  Many Canadians with disabilities have been, and will continue to be excluded from the current labour market unless significant new initiatives are created to remove barriers to employment.
2. Old Age Security coupled with the Guaranteed Income Supplement benefit is better than any social assistance program in Canada.  Sadly, many Canadians with disabilities look forward to turning 65 because they will have a better income benefit.
3. Increasing the age of entitlement for OAS will force persons with disabilities to live in poverty longer.
4. OAS, while the foundation of Canada’s retirement policy, does not exist in isolation.  In fact, many other benefits are designed to work in tandem with OAS.
   1. Will raising the age of entitlement trigger a change in the Old Age Exemption in the Income Tax Act?
   2. Will Long Term Disability and Workers Compensation policies now extend benefits to age 67?  Presently LTD claims and Workers Compensation claims end when people become eligible for OAS.  Will this change increase premiums?
5. Will Canada Pension Plan benefits also change the age of eligibility?  Will this apply to both the early retirement and full benefit?
6. How will provinces respond to persons with disabilities and others remaining on social assistance for a longer period of time?  Will it result in reducing those benefits or limiting future improvements?
7. Proposals for reform of the Canada Pension Plan include allowing people to claim CPP early (presently age 60) and continue to work.  They would continue to pay premiums, but should they become disabled, they would not be eligible for Canada Pension Plan Disability Benefits because they have taken CPP.  CPPD is a better benefit.  Disability increases with age, working people will still pay a full premium but not be eligible for full benefits (CPPD).  This appears unfair.

If Budget 2012 raises the age of eligibility for OAS, will you commit too ensuring that there is no negative impact on Canadians with disabilities and that a disability lens analysis is undertaken in regard to all future reforms.  The points raised by CCD are worthy of study.  New policy initiatives should enhance the status of Canadians with disabilities not create greater disadvantages for them.

CCD would be most willing to discuss this further with any Members of Parliament who wish to get a better understanding of the potential impact a change in OAS may have on Canadians with disabilities.