http://www.cbc.ca/news/business/taxseason/story/2012/01/31/old-age-security-sutainability.html
OAS provides a monthly cheque to Canadians, 65 years of age or older. Those who live in Canada must have lived in the country for at least 10 years after the age of 18 to be eligible for the payments; for those living outside Canada, the residency minimum is 20 years after the age of 18. People who are still earning an income of around $68,000 will have some of their OAS money clawed back. Those making around $108,000 aren't eligible for any benefit.
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D - first of all, the top # is closer to $110,000 than $108,000.
For 2011, the tax recovery applies to persons whose net income exceeds $67,668. For each $1 of income above this limit, the amount of basic Old Age Security pension reduces by $0.15.
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http://www.theglobeandmail.com/globe-investor/investment-ideas/portfolio-strategy/how-to-avoid-the-dreaded-oas-clawback/article2037894/
OAS is a federal social program designed to provide a very modest pension to low- to middle-income retirees. The maximum monthly benefit right now is $526.85 or $6,322.20 a year. The clawback of OAS benefits starts with a net income of $67,668 and it completely eliminates OAS with income of $109,764.
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D - "Sustainable" is the wrong question. "Fair" is.
OAS should pay out enough to raise seniors out of poverty.
The international comparisons focus upon 'median income', which is about $25,000 for a single Canadian.
By re-arranging existing OAS funding, we could end senior poverty just like that. Forget placing HIGHER on the survey - we're already very good. Let's just END senior poverty.
Since present and near-future older retirees were counting on the middle class 'feeding trough' mentality present in OAS funding, we cannot just suddenly do this.
A very minor - painless- and effective policy would be to simply -just -only de-index the clawback level from inflation.
This would eventually drive down the clawback to the median income, as per international senior poverty studies.
"Sustainable" is the wrong question. Why would GenX, 1/2 the size of Boomers, often working at
a) below LICO relative poverty line
b) above LICO but below median Canadian income
be paying to redistribute income to HIGHER income brackets, in a regressive vs progressive fiscal policy?
That OAS was originally -and rhetorically, nominally still is- an anti-poverty measure merely makes this even more UNFAIR.
D.
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OAS increases, by 2030, allowing for inflation and economic growth, ultimately results in a cost of 1% GDP, about. Keep in mind how significant a whole % of GDP is.
ReplyDeleteAlso, that the worker base will shrink a lot.
And that health care costs will be sky-rocketing.
Taken in context, OAS is still a cause for concern.
Old Age Security for the first quarter of 2011 is paid at a maximum rate of $537.97, subject to a clawback that begins at $67,668 and ends at $110,123 when the clawback reduces OAS to zero.
ReplyDeletehttp://www.efgi.com/personal/retirement/cppoas.html
http://groupbenefitsonline.ca/new-financial-planning-data-for-2012/
ReplyDeleteThe OAS Clawback (recovery) starts at $69,562 of income. At $112,772 of income OAS will be fully clawed back.
D - 2011 clawback starts at almost exactly 66,666. Cute. Appropriate?
Old Age Security (OAS) is available to most Canadians when they reach the age of 65. OAS provides additional benefits to eligible low-income seniors:
ReplyDeletehttp://www.hrsdc.gc.ca/eng/oas-cpp/index.shtml
D - y'know, I that qualifies as a LIE. Low-income? Really? Really?!
What I don't understand is how I sent the web site a correction, yet a day later the story had not been changed. That forced me to publicly humiliate the writer in the comment section instead. I did not particularly want to. Helluva way to run a business.
ReplyDelete