Untangling Canada’s Income Supplement Programs

Much has been made of Canada’s relative success in battling old-age poverty. Its true that only 4.4 percent of seniors in Canada still live in poverty, but its also true that 4.4 percent amounts to approximately 200,000 individuals. Countless others live in constant financial insecurity, teetering on the edge of the low-income cut-off (LICO), a measure that erroneously assumes that an individual can survive on no more than $20,000 of income per year.

Despite the absolute number of Canadian seniors living in poverty, there’s no doubt that Old-Age Security (OAS) and the Guaranteed Income supplement (GIS) have helped many low-income seniors stave off some of the worst effects of poverty. OAS and GIS, however, can only help those who receive the benefits. A recent report from Statistics Canada shows that an astounding 159,400 eligible seniors are not collecting GIS benefits. Effectively, almost 12 percent of eligible seniors are not receiving GIS payments.

While there are a number of reasons that account for the lack in GIS take-up, a significant factor, according to the report, is the complicated application process. Human Resources and Social Development Canada (HRSDC), the department that administers pension payments, has attempted to simply the process and reach Canadians who haven’t signed up for GIS, but too many still go without the crucial income supplement.

Complications in the application process for government income supplements and programs are a common problem, even at the provincial level. Most provinces have one or more forms of income supplementation for seniors, but finding the information and applying for the benefits is not always simple enough. Further complicating matters is the variation in programs from province to province and territory.

British Columbia and Ontario, for example, offer automatic income supplementation to seniors who file their taxes. Many seniors who have stopped receiving income, however, may fail to file their taxes, thereby unwittingly relinquishing much needed provincial supplementation. In Alberta and New Brunswick, seniors must proactively apply for provincial benefits. Nova Scotia and Prince Edward Island, on the other hand, offer other sources of aid, such a home renovation credits and nursing care. The chart below shows some other provincial income supplementation and programs for seniors.

Another continuing source of confusion and frustration are the ways that federal and provincial programs conflict. For instance, Ontario’s supplementary programs, called GAINS, can be cancelled out by very modest amounts of CPP income, leaving a struggling senior without the much needed financial supplement.

Alberta’s income supplement is relatively generous: it pays a maximum yearly benefit of $3,360 to singles or $5,040 to couples. Other Alberta programs for seniors, however, are less generous than found in some other provinces. For example, in Alberta, co-payments on drugs are subject to income testing.

It’s certainly commendable that federal and provincial supplementary programs have helped reduce poverty rates among seniors, but 200,000 individuals are still too many people suffering under constant financial strain. Matters are only made worse by the difficulty in accessing supplementary programs and understanding how each program relates to and conflicts with others. The problem can only be worse for older Canadians who struggle with the official languages or don’t have adequate family support.