Seniors’ poverty, income inequality, unfair RRIF rules, better pensions, and job stability

Require immediate attention at upcoming F/T/P finance ministers’ meeting: CARP


December 9, 2014

Toronto, ON: CARP calls on finance ministers to fight seniors’ poverty with increased income supports, relaxed GIS rules and specific measures to mitigate the impact of the OAS changes. To help people help themselves, CARP is calling for help for older workers and elimination of mandatory RRIF withdrawals which put retirees at risk of outliving their savings.

The F/T/P finance ministers are slated to meet in mid December, possibly to discuss ways to spend the projected surplus. However, CARP polling suggests that older Canadians, at least, do not share this sense of optimism. Indeed there remains the need to address retirement insecurity and seniors’ poverty with immediate and structural changes to promote greater income equality and stability for all Canadians as they age.

“CARP members are still waiting to hear what the finance ministers will do to help Canadians help themselves face their financial challenges in retirement. On their agenda should be measures to help people struggling to get by now – such as increasing income supports, and measures to remove or mitigate provisions that undermine their efforts, like RRIF withdrawals and increasing the OAS eligibility age.

 “Of course, the finance ministers should also move forward on increasing the CPP or adopting the ORPP nationally, but we are given to understand that the federal government has not placed this on the agenda at all, it should be”, said Susan Eng, VP, Advocacy for CARP

 The current state of the economy is a source anxiety for many Canadians, despite federal Minister of Finance Joe Oliver’s announcement of a budget surplus and government pronouncements that the economy is improving. In a recent CARP Poll™, 40 percent of CARP members say that the economy is leaving them behind as their personal financial standing has worsened recently. Only 3 percent report that their financial standing has improved due to the economy.

Inadequate retirement savings, precarious late-career employment, and inadequate structural supports combine to make it difficult for many Canadians to achieve and sustain income security before and during retirement.

Nearly 6 percent of seniors still live in poverty, amounting to almost 300,000 people. Seniors living alone are particularly hard pressed finically, with 1 in 6 single seniors, most of whom are women, living in poverty. Twelve million working Canadians do not have workplace pension plans and Canadians are increasingly unable to save sufficiently for their own retirement. Future generations of Canadians face the real prospect of substantial declines in standard of living in retirement if nothing is done now to help.

The upcoming meeting of finance ministers is an opportunity for the federal government to help older Canadians achieve financial security and prepare for retirement and to make structural changes for the future to promote greater income equality and stability for all Canadians as they age.

CARP is calling on the finance ministers to address the issues that would do the most to help struggling Canadians, including action on pension reform, income support, and stable employment. Specifically, CARP is calling on finance ministers to:

1. Act on comprehensive pension reform, retirement security, and poverty reduction:

  • Work with provinces to create a national supplementary Universal Pension Plan (UPP) with reliable, predictable benefits and enact a modest CPP enhancement.
  • Eliminate mandatory minimum withdrawals from Registered Retirement Income Funds (RRIFs)
  • Replace OAS and GIS benefits that will be lost by the most financially vulnerable seniors due to increasing the OAS eligibility age, as a first step to restoring the OAS eligibility age to 65.
  • 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.
  • Help low-income workers make pension contributions.
  • Consider a national Guaranteed Minimum Income to reduce poverty and replace multiple, complex, administratively expensive welfare programs.

2.  Promote and create job opportunities and stable employment for older workers:

  • Remove barriers to continued employment: amend tax and pension systems to encourage continued employment, such as being able to work and receive benefits while still contributing to a pension plan; create employer incentives that encourage policies such as flexible hours.
  • Help unemployed older Canadians in job search: further minimize work disincentives associated with the GIS claw back provisions; amend Employment Insurance rules to give older workers more time to find suitable job opportunities.
  • Create job opportunities and promote the value of older workers:

o   Incent employers to hire and retain older workers;

o   incent and/or fund employer-hosted job fairs and placement agencies that match unemployed older workers with relevant opportunities in their fields;

o   Incent innovative management programs such as caregiver leave/support, “emeritus” work, and flexible time and salary plans.

3. Protect retail investors and their investments by working with provinces to create an investor protection enforcement agency, within a single national regulator:

  • Work with provinces to establish a dedicated national investor protection agency with:

o   Specialist knowledge to receive complaints, investigate crimes, and support prosecutions; a tribunal with

o   Authority to order restitution, undo transactions, provide mediation, and order compliance, with

o   Access provided to retail investors and a compensation fund to pay restitution.

CARP is a national, non-partisan, non-profit organization committed to advocating for a New Vision of Aging for Canada, social change that will bring financial security, equitable access to health care and freedom from discrimination. CARP seeks to ensure that the marketplace serves the needs and expectations of our generation and provides value-added benefits, products and services to our members. Through our network of chapters across Canada, CARP is dedicated to building a sense of community and shared values among our members in support of CARP’s mission.

For further information, please contact:

Sarah Park   416.607.2471
Director, Communications
[email protected]

Michael Nicin   416.607.2479
Director of Policy
[email protected]

Anna Sotnykova  416.607.2475
Media & Communications Coordinator
[email protected]