The Budget in Brief 1995 - 9
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Archived - Protecting Canada's Seniors

"One of the greatest reforms ever provided by a Canadian government has been the provision of a decent support for elderly Canadians - who have given - and continue to give - so much to their families and to their country."

"This government is absolutely committed to providing a fair and sustainable system of protection for Canada's seniors."

The government is committed to take action to reform Canada's retirement income system on a fairer and sustainable basis. The first part of this system - tax assistance for private pensions - is being modified, as described in the next section. The second part - the Canada Pension Plan (CPP) - will be addressed this fall when Finance Ministers meet to review the financing of CPP, as part of its regular five-year review as mandated by law.

The third pillar of the pension income system - Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) - will be reviewed later this year. The Minister of Human Resources Development, in collaboration with the Minister of Finance, will release a paper which will outline other changes required to ensure a fair and sustainable public pension system for future generations of Canadians. The goal will be to legislate changes to take effect in 1997. Consultations with seniors, and with Canadians generally, will take place when the paper is released.

In the interim, the budget introduces two changes to the administration of the OAS benefit.

Effective July 1996, OAS payments will be calculated and paid out net of the high-income recovery amounts, based on income reported on the previous year's tax return. This will not affect the amount of benefits provided to seniors. The only change is that the OAS benefit will be reduced before it is sent out rather than being taxed back after individuals have already received their cheque.

Also effective July 1996, OAS recipients who are no longer resident in Canada will have to file a statement of their world-wide income in order to receive OAS benefits. Currently, non-residents with incomes above $53,215 escape the high-income recovery. They are treated more favourably than Canadian residents.

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