October 5, 2012 – We’ve known for years that Canada’s population is aging. But, seniors aged 65 and over reached a record high this year, accounting for 14.8% percent of the Canadian population or nearly 5 million Canadians.

But the 1 in 6 Canadians now over the age of 65 are not a homogenous a group.
Older Canadians are living longer, healthier lives than previous generations, but even in the mid-income groups, many still face challenges of financial insecurity and inadequate retirement savings. Worse, nearly 7% of seniors still live in poverty.

Family dynamics are also changing amongst seniors and older Canadians. According to Statistics Canada, older Canadians are divorcing at higher rates now than in the past. In 1961, over 90% of Canadian families were headed by married couples. That number is now under 70%, and dropping. According to the recently released Census figures, among all seniors, 56.4% lived as part of a couple in 2011 compared to 54.1% a decade ago [2001].

But more and more people are living alone as they age. Among seniors aged 65 to 69, 70.0% lived as part of a couple in 2011, although this was higher for men (77.9%) than for women (62.7%). For the older age groups, fewer seniors were in couples and nearly twice as many women are living alone versus men. While divorce is often seen as a personal issue, the trend across the aging population is means fewer older Canadians have a partner to rely on financially. Tellingly, almost 1 in 5 single senior women live in poverty.

People behind the numbers

Because traditional stereotypes are changing, policy makers must see the people behind the demographic statistics. The federal government has recently targeted the varied needs of older Canadians, particularly in providing a top-up on GIS for 680,000 of the most vulnerable seniors, introducing the non-refundable Caregiver Tax Credit in 2011, and committing to proactive enrolment for OAS and GIS in the 2012 Budget.

These positive steps forward are compromised by changes to OAS eligibility, ultimately delaying access to the earned benefit by two years. These changes will hit hardest the Canadians least able to withstand the delay. According to government sources, the  680,000 seniors currently counted as financially vulnerable is expected to exceed one million people in the coming years.

Many single seniors continue to struggle making ends meet, and saving for retirement is becoming an elusive goal for most Canadians. For these reasons, CARP’s 2012 recommendations to the Standing Committee of Finance urge the federal government to see the people behind the numbers.

OAS Matters

CARP is on record opposing the changes to the eligibility age for OAS, as are the vast majority of CARP members. More than 70% of members support our ongoing opposition to the changes, despite the passing of the Omnibus Bill C-38 and the fact that most current CARP members will be spared the effects of the changes in 10 years time.

The OAS issue exemplifies the divide between statistics and people. OAS is an earned benefit widely viewed by older Canadians as a universal pension, a crucial part of the social safety net to prevent poverty and give dignity to older Canadians. Many expect to rely on it even if they would not qualify as “poor” but the two year delay will be most adversely felt by those who can least do without it. CARP will continue to press for a repeal of the changes, but urges the government to commit at least to protecting the most vulnerable seniors.

CARP is urging the federal government to commit to funding the replacement of the OAS and GIS benefits that will be lost by the most financially vulnerable seniors as a result of the changes to OAS as a first step to restoring the OAS eligibility age to 65.

Helping Single Seniors

Today’s seniors defy traditional stereotypes and governments should keep pace with changing social trends. This is especially true with regard to family structure and aging alone.

Older unattached women are especially vulnerable. Almost 20 percent of single older women live in poverty. These women – widowed, single, or divorced – tend to earn lower lifetime income than their male counterparts and cannot receive the OAS spousal allowance for Canadians aged 60-64 and married to a pensioner. For these and other reasons, unattached older women as a group sustain one of the highest rates of poverty in Canada.

CARP is advocating that the federal government support single seniors, with particular regard to older women, with an equivalent to spousal allowance for single seniors in financial need and by making the Caregiver Tax Credit refundable, since women are still largely responsible for informal caregiving.

Working on Retirement Security

CARP is still fighting for real pension reform, but the era of guaranteed pension plans is receding into memory. Canadians are not saving enough for retirement and private savings vehicles have not been the answer. Pooled Registered Pension Plans (PRPPs) are a step in the right direction, but fall short of the core goal of providing a universally accessible and affordable retirement savings vehicle. CARP has consistently called for a supplementary Universal Pension Plan (UPP) modeled on the CPP. As a first step, previous federal commitments to seek a modest enhancement of the CPP should be advanced. The retirement security of millions of Canadians hangs in the balance.

CARP is calling on federal and provincial government to return to the 2010 commitment to work towards enhancing the CPP. It’s is crucial, however, that Canadians have access to a UPP modeled on the CPP with mandatory enrolment, utilizing the existing payroll deduction mechanism, professional management, a governance role for the members, a mandate that is focused entirely on optimal performance and independence from government or any single employer. Defined benefits (DB) are also essential to achieving all of these goals.

It’s easy to say that our population is aging, but the hard work starts in recognizing that not all seniors are alike. As we move forward, CARP will continue to press politicians and policy makers into crafting solutions and policies that reflect the needs of real Canadians. Older Canadians are much more than just a growing demographic statistic.

Read the full Federal Pre-Budget Submission