Raising the age of eligibility for the Old Age Security pension and the Guaranteed Income Supplement will increase inequalities between older people, according to new research coming out of Montreal.
“This change will force retired people into greater dependence on their private savings to support them as they get older,” University of Montreal demographer Yves Carrière said. “Research shows that greater privatisation of the retirement income system results in growing inequalities among the older population. When you raise the pension eligibility age, you are also opening the door to rising disparities”
Mr. Carrière presented a report on this topic to the Population Change and Life-course Strategic Knowledge Cluster meeting last week in Ottawa showing that among the beneficiaries of the Old Age Security, the less afluent men whose incomes entitled them to the Guaranteed Income Supplement had a life expectancy at 65 years 2.4 years lower than wealthier ones who did not qualify. In women, the gap was 2.1 years.
Mr. Carrière, a specialist on Canada’s retirement income system, has collated the most recent international research on this issue and concludes that there might be unpleasant surprises in store for future generations of retired people.
“Despite the stated aim of preventing inter-generational inequities – because there are fewer people of working age to support more and more people in retirement – we run the risk of generating greater inequalities between those who will be in retirement in the future: that is, within the very generations we say we want to be fair to”.
To limit the inflation of costs caused by the baby boomers joining the ranks of the retired in Canada, the Federal Government has announced that it intends to raise the age of eligibility for the Old Age Security pension and the Guaranteed Income Supplement by two years (from age 65 to 67).
The rise is to take effect over six years starting in 2023. Yves Carrière argues that this policy will further impoverish those older people whose incomes are already low.
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