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Seniors need more than one-time top-ups if coronavirus pandemic lingers: advocates

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Canadian seniors will need more financial help from the federal government to weather the COVID-19 pandemic if their increased living costs continue for months longer, advocates say.

Organizations representing seniors across the country say they’re grateful the government is supporting older adults with a one-time public pension top-up but worry it won’t be enough — especially if the timing of a promised increase to the Old Age Security (OAS) benefit might be in flux.

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Federal Election 2019: Trudeau promises to boost old age security, CPP benefits if re-elected – Sep 18, 2019

During the 2019 election campaign, the Liberals courted seniors’ and retirees’ votes by vowing to both boost the OAS program by 10 per cent for seniors once they turn 75 and the Canada Pension Plan (CPP) survivor’s benefit by 25 per cent. These increases would take effect in July 2020, the Liberals said in the fall.

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However, in a recent interview on The West Block, the federal minister responsible for seniors wouldn’t say one way or another if the government was on track to fulfill that pledge this summer.

“We are committed to delivering on our promises but right now the pandemic is taking all efforts and energies and that’s where our focus is,” Deb Schulte told Global News last week.

READ MORE: Liberals won’t commit to boosting old age security in July despite campaign pledge

The OAS pension is a monthly payment made to eligible seniors who are 65 years old and older. Low-income recipients of the OAS can also get the Guaranteed Income Supplement (GIS) — an additional monthly, non-taxable benefit. The maximum monthly payments for both benefits (for April to June 2020) is $613.53 and $916.38, respectively.

According to the government, there are 6.7 million Canadian seniors currently eligible for the OAS pension and 2.2 million for the GIS.

To help counteract the extra living expenses those seniors have faced due to the outbreak of the novel coronavirus, the federal government provided a one-time, extra GST credit to a low- to modest- income seniors in April. Then on May 12, seniors receiving the OAS pension heard the feds would give them a one-time, tax-free top-up of $300, with an additional $200 going to GIS recipients.

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“That was an important first step,” said Laura Tamblyn Watts, CEO of CanAge, a national non-profit association that advocates for seniors.

“But Canadian seniors have been counting on the much overdue increase to OAS and perhaps never before has that increase been needed so much.”

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Seniors are facing “financial insecurity” right now as they change their routines to abide by public health restrictions and avoid getting infected by the virus, Tamblyn Watts said.

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Some are spending on taxis to avoid public transit, on grocery delivery fees to avoid exposing themselves in stores and on new electronic equipment to stay connected with family and friends, advocates said. Depending on where they live, some seniors may be spending more money on prescription dispensing fees due to refill limits and or can’t access discount services that have paused operations.

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Seniors may have to bear those extra costs for months longer, depending on the course of the pandemic, said Marissa Lennox, chief policy officer for the Canadian Association of Retired Persons (CARP), a non-partisan, non-profit group that represents 320,000 members across the country.

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The top-ups announced last week address seniors’ “immediate financial needs” but they won’t have the same “lasting impact” as the promised 10 per cent boost to OAS, Lennox argued, saying her organization gets emails and calls about the issue every day.

READ MORE: Coronavirus: Trudeau promises one-time top-up for eligible seniors up to $500

If the government isn’t going to follow through with its scheduled OAS increase in July, the public pension top-ups should be “recurring” like the other federal COVID-19 relief programs for the unemployed and students, Lennox and Tamblyn Watts argued.

“If it is this kind of one-time payment and nothing else, that’s going to be very difficult for older people,” Tamblyn Watts said.

“Seniors are really going to be in a financially precarious position by early summer if that’s the case.”

Advocates say they understand the government’s priority as the crisis unfolded was to address income loss for working Canadians. But Lennox noted that “many retirees live off far less than $2,000 a month” — the amount offered through the Canada Emergency Response Benefit.

“Many of our members are barely breaking $1,200 a month on OAS and CPP,” she said.

Lennox suggested “there will be hell to pay” in the event the OAS and CPP campaign pledges are abandoned, but noted she’s received no indication that they have been.

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“When the Liberals did come out with that promise in the fall, it was in many ways, for a lot of our members, the reason they voted for the Liberals,” she said.

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Simon Coakeley, CEO of the National Association of Federal Retirees, said his organization isn’t too concerned yet about the fate of the promised OAS increase but would support renewed assistance for seniors if the economic impact of the pandemic “is still very evident” into the fall.

“If we’re looking at basically the same situation we are today in another three or four months’ time, then I think the government may very well be well-advised to consider repeating those [one-time payments] and maybe making some of those increases permanent,” Coakeley said.
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Global News asked the minister of seniors’ office if it could provide a more specific response as to whether the OAS and CPP increases would be implemented in July or not. Global News also asked if the proposed benefit boosts were included in the federal budget the government would have tabled on March 30, and if the government would renew the OAS and GIS top-ups in the event of a delay.

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In a statement, the minister’s office reiterated the government “remains committed to implement the policies in our platform” but is “focused on managing the COVID-19 public health crisis” right now.

“Through OAS, GIS and GST credit one-time payments, we are providing financial support to seniors of all ages sooner and greater support for the most vulnerable,” read the statement sent by Scott Bardsley, Schulte’s communications director.

The Liberal government is investing “over twice as much on financial assistance for seniors as we committed to in our platform,” the statement also claimed.

“We continue to look at all the ideas that are coming in on how we could better help seniors. However, our immediate focus is on helping them with additional costs during the pandemic,” the statement read.

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OAS and CPP benefits aside, Tamblyn Watts argued that eliminating mandatory withdrawals from Registered Retirement Income Funds (RRIF) would give seniors additional relief during a tough year.

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RRIFs are one way people can transfer their retirement savings and pay out retirement income once they turn 71.

The government has reduced the minimum withdrawals from RRIFs by 25 per cent for 2020 — but both CARP and CanAge say that’s not enough to safeguard seniors’ retirement savings in this financial climate.

“What we need to see is that older adults are able to make ends meet at a time where the financial pressures have never been so dire,” Tamblyn Watts said.