The problem
OAS is out of step with something most Canadians value: that when we lend a helping hand, we should prioritize those most in need.
Retired couples with $180,000 of income are eligible to receive full OAS benefits. That’s an $18,000 subsidy paid for by today’s taxpayers. In contrast, families with kids can reach only $80,000 of income before Canada Child Benefits begin being clawed back.
It’s difficult to understand this $100,000 gap as anything other than ageism against younger people. And this disparity becomes all the more surprising when we factor in 3 things:
- Retirees enjoy the lowest poverty and highest wealth of all age groups.
- Young people and young families face unaffordable housing, rising tuition and student debt, and parental leave and child care that still fall short.
- Younger people already pay more of their taxes to support today’s retirees than these same retirees paid to support seniors in their day.
The solution
Most Canadians already agree on a solution: asking financially secure retirees to take slightly from OAS by reducing the eligibility threshold for full OAS benefits to $100,000 of household income. This change would ask 1 in 5 retirees to get about $3,200 less in after-tax income.
With this one change, Ottawa would gain $36 billion over 5 years. Funds that could be reinvested in lifting seniors out of poverty, reversing the deteriorating wellbeing of younger people, shoring up national defence, or reducing our soaring budget deficit.
