This is a guest blog from the Older Women’s Network
November 26, 2010 – Poverty has many facets and many features, but low income is always the defining factor.
By any definition, women 65-plus (and especially those unattached ) represent a substantial number of those living on low income. Single or widowed women are significantly more likely to be poor than seniors living in families. The average after tax income of senior women living on their own is about $2400 below the poverty level.
Women’s average CPP (Canadian Pension Plan) income is less than half that of a man. And 14% of women receive no CPP. Almost two-thirds of women 65-plus get OAS (Old Age Security) or GIS (Guaranteed Income Supplement) which is meant to help lower income or zero income seniors.
Why are older women so much more likely to be low income? Let’s just say it, poor. The problem begins way before retirement. Women are more likely to go into “women’s work” – caring for and teaching children, nursing the sick, cleaning, preparing food, serving others. At any time 40% of all working women are doing some combination of part-time, casual (temporary), contract, and self employed work. Result: Women earn 71% of a man’s wage. When you look at just part time and seasonal work, women make just over half of what men make (54¢ to his $1.00).
During her working career she is far more likely to take unpaid leave, to take care of the children, parents, and/or a spouse. There goes some of her earnings toward CPP or work pensions. She is more likely because of family pressures to be unable to take the high level jobs that require large amounts of travel, long hours, and being available 24/7.
The federal government likes to talk about the “Three Pillars of Retirement” – CPP/QPP, OAS/GIS and RRSPs and employment pension plans to support a retirement house. Instead for many, especially women, the pillars are somewhat rickety. In the ideal situation, CPP/QPP is supposed to replace 25% of average life-work earnings, OAS/GIS provides a maximum of just over $14,000 a year, and work pensions and RRSPs are supposed to provide the rest.
Here is a description of your “average” woman 65-plus (Remember to get the average you include those who retire with an excellent pension). She may have had to take leave to look after her children and/or grandchildren, she may have nursed a sick husband and/or her elderly parents or in-laws. She was more likely working in a lower paying job and more likely to have worked part-time or intermittently. If there was a family business, she is more likely than her husband to have not received a salary. She may have lost workplace pensionable earnings (or even pension contributions) by her more intermittent work pattern. So the only “pillar” she can count on is OAS/GIS – a little over $1000 a month.
Her only hope is a basic structural change to the pension system. There is a lot that can be done to help older women, but a few things stand out. OAS and GIS should at least bring seniors up to the poverty line and CPP should not penalize the casual or intermittent worker as much.