This article was published by The Lethbridge Herald on April 15th 2012. To see this article and other related articles on The The Lethbridge Herald website, please click here
The big change Canadians were fearing was indeed part of the federal budget unveiled last Thursday — the eligibility age for Old Age Security is going to be raised to 67. The good news is it won’t happen until 2023.
That’s a relief to those whose are between 54 and 64 years of age, but for most Canadians younger than 54, it’s going to mean a change in retirement plans. Among those who don’t have to worry are federal politicians, whose gold-plated pensions ensure they will be well positioned to retire before age 65 anyway. MPs presently qualify for a pension after six years in office and can start collecting at age 55. Flaherty did hint at MP pension reforms in the near future but you can be sure MPs won’t be sweating the change in OAS eligibility the way average Canadians might be.
Some suggest an extra two-year wait won’t make a great deal of difference, and for many Canadians, quite likely it won’t. It will just require an adjustment in retirement plans and could mean spending an extra two years in the workforce. It might be inconvenient but manageable.
For lower-income seniors, however, or for those unable to work, two years is a big deal. “A lot of Canadian seniors rely on this money,” Susan Eng, a spokesperson for CARP (Canadian Association of Retired Persons), said in February when there was speculation the government was looking to raise the OAS age. Those Canadians will still be in need of financial assistance and presumably the age change for OAS eligibility will also apply to recipients of the Guaranteed Income Supplement. If that financial help isn’t going to come from the federal coffers, it will have to come from provincial pockets. Consequently, the OAS “savings” won’t really be so much a saving as another transfer of responsibility onto the provinces.
There has even been some question whether the OAS age change is necessary. In a story in Friday’s Herald, a local official with the National Association of Federal Retirees noted that according to research by economists from whom the NAFR had information suggested the OAS is sustainable the way it is. The official also voiced concern that the change was made without any conversation with Canadians. A variety of polls showed the majority of Canadians were opposed to raising the OAS age. But the change was made anyway.
So it appears retiring at 67 instead of 65 is going to become the new reality for Canadian seniors. But some Canadians aren’t going to be able to wait an extra two years. Not everyone can rely on a comfortable MP’s pension.