Backgrounder: Government of Canada financial supports for seniors
The Government of Canada is committed to supporting seniors after a lifetime of hard work. Seniors deserve a dignified retirement after having helped shape Canada into the country that it is. The Government continues to make seniors’ financial well-being a top priority. Since 2015, the Government has provided tangible support to seniors.
The Government restored the age of eligibility for the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) to 65 from 67. This change put thousands of dollars back in the pockets of future Canadian seniors.
In 2016, the GIS was increased for nearly 900,000 low-income single seniors. Because of this increase, along with other government initiatives, an estimated 45,000 seniors were lifted out of poverty. In 2020, the GIS earnings exemption was enhanced, which has helped working low-income seniors keep more of their benefits.
Income taxes have been reduced through increases to the Basic Personal Amount. When these increases are fully implemented in 2023, 4.3 million seniors will benefit, 465,000 of whom will see their federal income tax reduced to zero. Every year, single seniors will save close to $300, and senior couples will save nearly $600.
The Government ensured that future retirees across Canada will be able to enjoy a more secure retirement. We worked together with provinces and territories to enhance the Canada Pension Plan (CPP) to provide today’s workers with more money they can count on when they retire. The CPP enhancement is a new component of the CPP that increases the amount of the CPP retirement pension, disability pension, survivor’s pension and post-retirement benefit for people who have worked and contributed to the CPP in 2019 or after. It is not a separate benefit, but rather a top-up to the original CPP. Since June 7, 2022, eligible Canadians began receiving the enhanced component of their CPP benefits. Eligible recipients can expect to receive their first enhanced payment, including any retroactive amounts owing, over the course of the next few months.
A number of measures were implemented to support seniors during the pandemic. The Government issued a one-time tax-free payment of $300 for seniors eligible for the OAS pension, with an additional tax-free payment of $200 for seniors eligible for the GIS. This $2.5-billion investment in financial support helped Canadian seniors cover increased costs due to the pandemic.
In addition, the Government’s COVID-19 Economic Response Plan invested $1.3 billion in a one-time special payment through the GST credit in April. More than 4 million low- and modest-income seniors benefited from this top-up, which provided an average of $375 for low- and modest-income single seniors and an average of $510 for low- and modest-income senior couples.
Through these two measures, the Government provided over $900 more for low-income single seniors and more than $1,500 for low-income senior couples, on top of their existing benefits, to help these vulnerable Canadians with extra costs during the pandemic.
In 2022, the Government committed up to $742.4 million for one-time grant payments to alleviate the financial hardship of seniors who qualified for and received pandemic benefits in 2020, but who subsequently saw that these benefits counted as income and impacted their GIS or Allowance benefits. Over 213,000 seniors received one-time payments between March and April 2022.
And, to ensure that low-income seniors will not face a reduction in their GIS or Allowance benefits if they received pandemic benefits in 2021 or later, the Government amended the Old Age Security Act to exclude federal pandemic benefits from the calculation of income for GIS/Allowance purposes in future years.
Budget 2021 amended the Old Age Security Act to increase the OAS pension by 10% for seniors 75 and over, beginning in July 2022. This measure included a one-time payment of $500 in August 2021 to seniors who were eligible for the OAS pension in June 2021 and born on or before June 30, 1947. This is the first permanent increase to the OAS pension since 1973, other than adjustments due to inflation. This increase will strengthen the financial security of 3.3 million seniors, 56% of whom are women.
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