March 22 2011: The 2011 budget provided a GIS enhancement, but targeted only seniors with the very lowest levels of income. Effective July 1, 2011, seniors with little or no income other than Old Age Security and the Guaranteed Income Supplement will receive an additional annual benefit of up to $600 for single seniors and $840 for couples, assuming the budget survives.
Going into budget season and coming out of the recession, financial security was top of mind for most Canadians.
With prices rising and savings eroding, older working Canadians, retired canadians, and Canadians with fixed and lower incomes were especially concerned with financial security.
As it stands, nearly 7 percent of Canadians over 65 live below the Low-income Cut-off lines, which means that approximately 300,000 seniors in Canada live on less than approximately $21,000 per year. Many must make ends meet on substantially less. In rural areas of the country, you’re not officially counted as below poverty until you manage to live on less than $12,000 per year.
These figures don’t include countless other older Canadians who are neither officially below poverty nor financially secure.
What we asked for:
In our pre-budget submission to the federal government, CARP asked for a number of provisions that took aim at financial insecurity.
CARP recommends that the federal government do more to ensure that current retirees and older Canadians achieve and maintain financial security as they age by:
Increasing OAS and GIS substantially
Placing a permanent moratorium on mandated RRIF withdrawals (Canadian pensioners must withdraw at almost twice the rate of their US counterparts) Exempting small amounts of RRSP withdrawal from the calculation of OAS claw backs or reductions in GIS
Increasing the allowable earnings band for GIS benefits
What we got
The budget delivered a GIS increase, but with mixed results. Only seniors at the lowest levels of income could expect a GIS boost. The targeted group represents a subset of current GIS recipients.
Effective July 1, 2011, seniors with little or no income other than Old Age Security and the Guaranteed Income Supplement will receive an additional annual benefit of up to $600 for single seniors and $840 for couples, assuming the budget survives.
Single recipients with an annual income (other than Old Age Security and the Guaranteed Income Supplement), of $2,000 or less, and couples with an annual income of $4,000 or less, will receive the full amount of the benefit.
Above these income thresholds, the amount of the top-up will be gradually reduced and will be completely phased out at an income level of $4,400 for singles and $7,360 for couples above OAS/GIS.
Was it enough?
The GIS increase is a valuable enhancement for seniors with very low-incomes, but It is far from the amount that would help seniors who may not be impoverished, but struggle with financial insecurity.
Even still, the enhancement represents $300 million per year. And, up to 680,000 seniors could expect some additional GIS income.
Keywords: seniors, poverty, GIS