Old age security reform

[fellowtraveller]

False dichotomy there is no choice between OAS and Healthcare, you just want that argument because that is one that strengthens your point. Right now it is a choice between many things.

Nothing false about our future.

There will be much more drain on our precious social contract at the same time that the money going in will be reduced. Whimpering over the status quo simply won't do. if we act now as anation, not as bunch of bickering old women pretending the present will be our future, we are well and truly f**ked.

I know that is the forte of the NDP, championing the rights of the working man, but when oh when will they actually get around to something practical to make sure the money is there when it is needed for those rights?

There will never be enough money to keep all of us alive forever.

The government is not responsible for my life.

Try and think from that point of view, and act accordingly.

[waldo]

You're talking out your ass again

you've gone from calling me a moron to telling me I'm talking out of my ass. Clearly you don't handle challenge or criticism well. Perhaps step away from your keyboard for a while... take a few deep breaths.

[fellowtraveller]

Why 2 years, why not 6 months... why not 5 years?

Inded, why not.

Personally, I am going to wait for the actual proposal/legislation. I expect it will include:

1) a phasein of a two year extension to eligibility to OAS to age 67, like several other developed countriesd have done and msot of the rest will be obliged to do

2) a reduction of the clawback point of $67k, perhaps into the high $40k range.

3) enhancement and/or maintenance of the threshold level for the OAS Supplement for the poorest of seniors.

In the meantime, I expect you pair will continue to flap your giblets frantically and keep us all entertained.

One demographic reality that will help with OAS is that fewer seniors are expected to rely as heavily on OAS in the future. The reason is that OAS Supplement recipients are often older generation women who did not contribute much or at all to CPP and have less income from that. That is less true today than in the previous generation, more women and men earn CPP now than then.

[fellowtraveller]

you've gone from calling me a moron to telling me I'm talking out of my ass. Clearly you don't handle challenge or criticism well. Perhaps step away from your keyboard for a while... take a few deep breaths.

That was just after you claimed I was a simpleton, correct?

Take a break Skippy, back to rabble.ca, they'll be awaiting your breathless report on the demise of democracy in Canuckistan.

[WWWTT]

This issue has bein big recently and for good reason!

What really gets me is that the conservatives are saying the opposition are using this to just attack and critisize the government.And I guess the people who are sincerely concerned that their future may be in jeopardy have no business to ask any questions of their government!

Aswell it is in my opinion that this government can not be trusted!

If this government had actually tried to make serious cuts to all sectors,less essential departments like military,justice,corporate taxation,etc,etc, then they would appear more sincere.

Theres an old saying if its not broken then don't try fixing it!

WWWTT

[capricorn]

Aswell it is in my opinion that this government can not be trusted!

Which government is?

[cybercoma]

Nothing false about our future.

There will be much more drain on our precious social contract at the same time that the money going in will be reduced. Whimpering over the status quo simply won't do. if we act now as anation, not as bunch of bickering old women pretending the present will be our future, we are well and truly f**ked.

I know that is the forte of the NDP, championing the rights of the working man, but when oh when will they actually get around to something practical to make sure the money is there when it is needed for those rights?

There will never be enough money to keep all of us alive forever.

The government is not responsible for my life.

Try and think from that point of view, and act accordingly.

The working classes now will pay for it one way or the other. Either through taxes and a redistribution of funds or they'll be forced to care for their elderly impoverished parents, thus redistributing their funds to something they may not have intended to, or the elderly will be forced out onto the street, increasing the need for policing and taxes to pay for it, thus redistributing funds. Any way you cut it, we will pay. If cutbacks are needed, why not look at a retiree's income and clawback the OAS payments based on that? This way the elderly that would otherwise be a strain on their family's resources or soceity's resources in other ways (ie, policing) would be covered, while those that are already above the poverty line will stop costing the taxpayers money.

[Smallc]

A report today said that debt could skyrocket in all OECD countries if they don't prepare for the future. We have to take care of pensions, EI, and health costs. We can control two with relatively simple changes (the CPP is good, and is the model that EI is set to follow...hopefully some day it will be allowed to. OAS/GIS will need to be pushed back, and eventually, may not be able to apply to as high of income groups. Health is more difficult). We have to prepare.

[waldo]

you've gone from calling me a moron to telling me I'm talking out of my ass. Clearly you don't handle challenge or criticism well. Perhaps step away from your keyboard for a while... take a few deep breaths.

That was just after you claimed I was a simpleton, correct?

Take a break Skippy, back to rabble.ca, they'll be awaiting your breathless report on the demise of democracy in Canuckistan.

read it again, Skippy - I most certainly did not call you a simpleton. Even after a 4 hour respite you're still ticked and unable to cope without drawing solace from a rabble boogeyman call!

[waldo]

what numbers? Unsustainable based on... what? How does a 2 year extension on benefit eligibility make it... sustainable? Why 2 years, why not 6 months... why not 5 years?

Indeed, why not.

Personally, I am going to wait for the actual proposal/legislation.

is that what you're doing? Waiting? No... what you're doing is fronting the float! Other than a reference to a 2-year extension on eligibility, you know nuthin; and you're quite happy and content knowing nuthin, spreading the party line, parroting the talking points and challenging anyone who might actually question the intent/need, or call for substantiating the intent/need, or suggest an independent review, etc..

In the meantime, I expect you pair will continue to flap your giblets frantically and keep us all entertained.

no - you're providing the real entertainment value

[msj]

A report today said that debt could skyrocket in all OECD countries if they don't prepare for the future. We have to take care of pensions, EI, and health costs. We can control two with relatively simple changes (the CPP is good, and is the model that EI is set to follow...hopefully some day it will be allowed to. OAS/GIS will need to be pushed back, and eventually, may not be able to apply to as high of income groups. Health is more difficult). We have to prepare.

And where is the link to the report?

Where does it deal specifically with OAS/GIS in Canada?

How are we to prepare for something when the information we are getting is sweet bugger all? Or worse, PMO press releases.

Show us numbers, methodology, actuary reports etc...

[Michael Hardner]

Take a break Skippy, back to rabble.ca, they'll be awaiting your breathless report on the demise of democracy in Canuckistan.

We're asking people not to use derogatory nicknames like 'Skippy' which you used, and Waldo called back to here. It's a form of insult, and we've seen it get out of hand.

[Smallc]

Sorry, I just hate linking to things while I'm on the iPad.

http://www.cbc.ca/news/business/story/2012/01/31/standard-poors-health-care-costs.html

We have to take care of things like EI, CPP, OAS/GIS, so we can pay for healthcare.

Edited February 1, 2012 by Smallc

[scribblet]

Sorry, I just hate linking to things while I'm on the iPad.

http://www.cbc.ca/news/business/story/2012/01/31/standard-poors-health-care-costs.html

We have to take care of things like EI, CPP, OAS/GIS, so we can pay for healthcare.

PM Harper did say that it was about retaining the sustainability of our programs as there is no doubt that the upcoming surge of retiring boomers will be hard on the treasury. I have to say, our PM is usually more politically astute and should've held off on this until there were more details. This has allready been manipulated and spun enough to scare the bee jeesus out of little old ladies and anyone who buys into the propaganda.

Having said that, as far as MP pensions go it is my understanding that matters such as these must be referred to the Board of Internal Economy, parliament itself cannot unilaterally make a decision on it. It's pretty hard to get at the actual truth with all the conflicting reports and agit prop going around. I'm not positive but I don't think they can bypass this board.

http://www.parl.gc.ca/about/house/BOIE/boie-e.html

some FAQs about the BOIE which is allready functioning as required by law

http://www.parl.gc.ca/about/house/BOIE/boie-faq-e.html

The Board is responsible for establishing By-laws, policies and guidelines relating to expenditures and resources provided to Members in order to carry out their parliamentary functions. The Board also has the exclusive authority to determine whether expenditures are proper and in accordance with the By-laws, policies and guidelines that have been established. This authority is given to the Board by the Parliament of Canada Act. The Board delegates to the Clerk of the House and the House Administration the responsibility to implement its policies and programs and the day-to-day management of House resources.

[Smallc]

I'm pretty sure Parliament can force the change.

[scribblet]

I'm pretty sure Parliament can force the change.

Possibly, I'm never sure on what's fact and what isn't, I do wish there was a neutral non partisan source of information and facts rather than relying on a partisan newspaper or blogger etc.

I think its worth noting that the Conservatives haven't issued any proposals for pension reform, yet the left has seriously jumped the shark in their efforts to make conservatives look bad. I suppose if no cuts are announced they will claim that Harper backed down and should've done something. So, in that context Mr. Harper has to do something now,in order to deflect the attack ads which I bet are being written as we speak.

[mentalfloss]

Excellent article that puts things into perspective.

Why raising OAS to 67 doesn't make sense

Prime Minister Stephen Harper raised eyebrows with a speech last week that fueled speculation he plans to lift the eligibility for Old Age Security to 67 (from 65).

Harper’s argument that deep cuts are required to keep the program afloat deserves closer attention, even though he’s been backpedalling ever since.

I have two points to make:

— There is nothing new in the numbers he quotes about OAS costs rising as baby boomers retire.

— There are ways to reduce costs that won’t incense Opposition parties and organized seniors’ groups.

Let’s start with the statistics, which show that taxpaid pensions for people over 65 will triple to $108 billion by 2030 (from $35.6 billion in 2010).

The Conservative government seems spooked by this figure. But why should it be?

When looked at in the context of Canada’s growing economy, the cost of supporting the demographic bulge is not nearly as scary. As a percentage of our gross domestic product, Old Age Security will rise to 3.1 per cent by 2030 (from 2.3 per cent in 2010) — before declining again after the boomers retire.

These statistics have been well-known and analyzed for many years.

“I’m mystified. Why talk about it now?” says Malcolm Hamilton, an actuary at Mercer Consulting, who’s been following the debate for years. “I’m looking at numbers and projections that I’ve been looking at for over a quarter of a century — without anyone in government saying there was an unmanageable problem.”

With lower fertility rates, one in three Canadians will be retired by 2030. Again, that’s old news.

“It’s always been known that costs would escalate,” Hamilton emphasizes. “Canadians have been led to believe this would be taken care of. Governments would absorb the costs or find economies elsewhere. They should have said something earlier if they had concerns.

“You can’t let people cruise up to retirement age without getting benefits they counted upon. It’s a little late to decide the system is unsustainable.”

And why did Harper increase the guaranteed income supplement (topping up OAS for low-income seniors) in his last budget without hinting that public pensions were under threat? That’s what Hamilton wants to know.

It’s clear the Conservatives are ideologically opposed to raising taxes. If they want to reform Old Age Security to spend money elsewhere, they can do so in other ways without making people wait two years to collect.

I asked a few observers for ideas about reducing the cost that wouldn’t pinch as hard as raising the eligibility age.

Here’s what they said:

Change the inflation indexing of OAS payments.

The OAS rates are adjusted every three months, while other program rates are adjusted once a year. Canada Pension Plan, for example, has only annual indexing.

“While inflation has been low, it had a spike last year. Over a period of time, this change will add up to a fair amount,” says Gordon Pape, author of a new book about retirement realities.

Change the way that OAS payments are taxed back.

Affluent seniors with an individual income of $69,562 have to repay some of their benefits. They lose all their benefits with net income of $112,772. “You can up the clawback rate — start it earlier or phase it out faster,” says John Stapleton, a retired public servant with an interest in social welfare.

“You can also disallow the phony deductions, such as the deductions for flow-through shares only available to well-to-do investors.”

Stop indexing the clawback income levels.

Conservative Finance Minister Michael Wilson didn’t index income levels when he brought in the OAS clawback in the 1990s, says Pape. Only when Jean Chretien’s Liberal government took power later was a change introduced to let the maximum income levels rise with inflation.

Lowering clawback levels or removing indexing on clawback thresholds won’t hurt as many people as raising the age to 67, says Jim Yih, a retirement blogger and consultant.

“If you take away two years of OAS, that’s $12,200 from every Canadian over the age of 65,” he says. “Before the government cuts the retirement income of taxpayers, they had better cut back on their overly lucrative gold-plated pensions first.”

Old Age Security, unlike CPP, is a means-tested program. It favours those without resources over those who have saved for retirement.

If changes are needed — and not everyone agrees they are — the government should tinker with the way it taxes back the OAS benefits instead of making across-the board cuts.

Why raising OAS to 67 doesn't make sense - Moneyville.ca

Edited February 1, 2012 by mentalfloss

[cybercoma]

In sum, Potter was right about the Conservatives.

[The_Squid]

Through poor planning and bad policies like cutting the HST and huge subsidies to large corporations, the Harper gov't is creating unsustainable spending....

They have created it and now, instead of increasing the HST or cutting corporate welfare, they can play to their "base" and cut "entitlement" programs.

[Scotty]

Excellent article that puts things into perspective.

You mean like:

How serious is the cost side of this conundrum? The president of the C. D. Howe Institute, Bill Robson, has projected the “net unfunded liability” implied by this unprecedented demographic shift — that is, promises to pay benefits out of public funds for which we have made no provision in taxes, “net” of any savings from having fewer children about — at about $2.8-trillion. With a T, ladies and gentlemen: about 160% of GDP. (That’s in addition to the $800-billion unfunded liability in the Canada Pension Plan and its Quebec counterpart — yes, they are pulling in enough each year to meet their current obligations, but that does not mean they are “fully funded,” the prime minister’s claims to the contrary — to say nothing of the $600-billion national debt.)

Andrew Coyne

And voters only have to look around them to understand the sustainability argument — that within 20 years, half the number of working people will have to support three times the level of benefit expenditures. The government’s plan is as much about keeping people in the workforce, as it is about saving money.

John Ivison

[mentalfloss]

OAS is not unsustainable.

--

"Some of the rhetoric has been exaggerated on both sides of the debate," Kevin Milligan, associate professor of economics at the University of British Columbia, told CBCNews.ca.

But Milligan, who has studied OAS for over 15 years, said with an aging population and rising life expectancy putting stress on public finances, the core policy issue is a reasonable one to raise.

A recent OECD study found that Canada has a "more favourable demographic outlook than many European countries. The analysis suggests that Canada does not face major challenges of financial sustainability with its public pension schemes."

Milligan pointed to Italy, which spends 14 per cent of its economy on public pensions.

"We're going from 2.4 to 3.1 per cent. Italy has that for breakfast," he said.

Carleton economics professor Frances Woolley said OAS is an easier issue for the government to deal with, because the political fallout is light compared to dealing with the costs of health care — the real problem.

"Is Old Age Security going to bankrupt us? No. Health care and long-term care are the big ones."

http://www.cbc.ca/news/canada/story/2012/01/31/old-age-security-sutainability.html

Edited February 1, 2012 by mentalfloss

[Smallc]

But OAS can't ben looked at in a vacuum. With the rising cost of OAS, comes rising costs for so many other things.

[mentalfloss]

But OAS can't ben looked at in a vacuum. With the rising cost of OAS, comes rising costs for so many other things.

Of course.

But raising the age limit is clearly not the first step that should be taken to ease up the costs a bit.

Edited February 1, 2012 by mentalfloss

[Smallc]

Of course.

But raising the age limit is clearly not the first step that should be taken to ease up the costs a bit.

It is really only part of the solution, I would imagine.

[waldo]

It is really only part of the solution, I would imagine.

and I would imagine, in the face of the Harper Conservatives clown show act on how they 'floated'/communicated this, they got nuthin else. Well, nuthin other than prisons and fighter jets. In the face of numerous legitimate challenges to the so-called unsustainable nature of OAS, Harper decides this is an opportune time to casually break an existing social contract with Canada. I would imagine.