August 2, 2017 5:57 pm
Updated: August 3, 2017 10:18 am

NDP leadership race: Jagmeet Singh proposes big changes to OAS

NDP leadership candidate Jagmeet Singh is breaking with party ranks and proposing major changes to Old Age Security. Vassy Kapelos reports on why the issue is such a hot-button one.

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As NDP leadership candidates gear up for another debate, retirement security is proving to be a wedge issue in the race.

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Specifically, Jagmeet Singh is taking on the NDP’s established support for universal Old Age Security. He has pitched the idea to scrap the current program, and instead roll it together with other seniors’ benefits to create one income-based program.

How OAS works

As it stands, Canadian seniors aged 65 and older qualify for OAS based on residency requirements – a citizen or legal resident having lived in the country for at least 10 years since the age of 18, for example.

Unlike some other programs, such as Employment Insurance or the Canadian Pension Plan, no one directly pays into Old Age Security.

The base amount a senior is paid remains the same for those netting less than $74,778 (that’s after paying applicable taxes). Only those bringing home more than that will have some of the OAS payment clawed back. The payments are completely phased out for anyone earning a net income of more than $121,279 annually.

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For example, a 64-year-old Canadian who nets $70,000 won’t get any financial assistance from the federal government. Once that person hits their next birthday, however, they’ll be entitled to almost $7,000 annually in Old Age Security payments, so long as they meet the residency requirements.

Singh’s questions

Why does the 65-year-old qualify for help, but not the 64-year-old who earns the same wages? Going one step further, could the money going to the 65-year-old better serve a senior earning less than $70,000?

Singh’s proposed policy addresses those questions – clearly, he thinks the roughly $45 billion Ottawa spends annually on OAS would be better spent being rolled into a single, income-tested benefit. Doing so, he says, will ensure low- and middle-income seniors get a bump in their old-age benefits.

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“There are more than 600,000 seniors living in poverty and I find that offensive,” he said in an interview with Global News. “The status quo isn’t working.”

Singh would also eliminate the Harper-era age and pension credits and roll them into the seniors benefit package, which his campaign says would increase the pot by $4 billion. The benefit would be phased out completely for Canadian seniors with an income over $100,000.

“New Democrats, myself included, believe in universal programs,” he said. “But redistribution of income when it comes to helping those in poverty can’t be universal; it means that we ask those who can invest a bit more to make that investment to lift those living in poverty out of poverty.”

Though Singh isn’t the first politician to propose these types of reforms — Brian Mulroney also did it in the ’90s — past governments haven’t been able to get any of those reforms off the ground.

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The current government doesn’t appear to want to touch the issue either.  Early in their mandate the Liberals rolled back the eligibility age to 65, but there’s no indication they’re considering further reforms.

“We are committed to the full social and economic inclusion of Canadian seniors,” a spokesperson told Global News, without addressing Singh’s proposal specifically.

Ripples among NDP, seniors groups

Though the former member of the Ontario legislature might not be alone in wondering whether there’s a “fix” for Old Age Security, his position certainly isn’t earning him friends within the established federal NDP caucus.

Leadership competitor Guy Caron says Singh’s idea won’t eradicate poverty and accuses him of employing Conservative ideals the NDP fought in the past.

Caron is proposing a basic income for all Canadians.

“We have to find ways that are not counterproductive in the fights we’ve fought in the past,” Caron said.

Seniors groups, meanwhile, are a bit anxious about any proposed changes to the Old Age Security program.

Only about six to 10 per cent of seniors fall within the higher income brackets in which OAS payments are reduced, noted Wanda Morris of CARP, formerly known as the Canadian Association of Retired Persons.

“That’s a pretty small number,” she said. “And fair enough, let’s try to reign that in. But it’s not like we’re talking about millions of people that are getting these benefits and don’t need them.”

© 2017 Global News, a division of Corus Entertainment Inc.

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