The Liberal government is working to secure the future of Canada's public pensions through the new Seniors Benefit, introduced with the 1996 Budget. Beginning in 2001, the Seniors Benefit will replace current benefits for seniors – including Old Age Security (OAS), the Guaranteed Income Supplement (GIS), and the age and pension income credits – with a single, tax-free benefit. Current seniors and near-seniors will be able to choose either to continue receiving OAS/GIS, or to switch to the new benefit, which will be higher for lower-income seniors. For younger Canadians, the changes mean sustainable public pensions they can count on for their own future retirement.

OAS and GIS payments account for nearly one-fifth of federal program spending. As the proportion of seniors in the population rises in the next century, this share of program spending will also rise, putting pressure on other important programs and services. The Seniors Benefit will slow the rise in the cost of public pensions, by targeting assistance to those with lower and middle incomes.

Prime Minister Chrétien made a commitment not to reduce the pensions of today's seniors. This plan honours that commitment and goes beyond it. Canadians who were 60 or older as of Dec. 31, 1995, and their spouses, whatever their age, are guaranteed to receive pensions amounting to no less than previous entitlements. Many will receive more; GIS recipients who change to the Seniors Benefit will receive $120 more a year. This group of seniors will be able to choose to continue with their existing OAS/GIS benefits, or to switch to the Seniors Benefit, whichever is higher. They may opt for the Seniors Benefit at any time after it comes into effect. The Spouses' Allowance program will remain in place, and benefits will be increased by $120 a year.

Most future seniors will be better off under the new system. Single seniors and couples with combined incomes under $40,000 – 75 per cent of Canadian seniors – will receive the same or higher benefits. Benefits will be lower for seniors with incomes above that level, reaching zero for the nine per cent of seniors with very high incomes: single seniors with annual incomes above $52,000 and couples with combined incomes above $78,000. More money will be targeted to those who need it most; nine out of ten single senior women will be better off.

The Seniors Benefit will be fully indexed to inflation, so that rising inflation will not reduce the real value of the benefit, as will the income levels at which the benefit begins to be reduced. This is an improvement over the current partial indexing of income threshold levels.

Seniors will only have to apply for the Seniors Benefit once, when they turn 65. Each year's benefits will be calculated from information on the income tax return of the previous year. Benefits will be calculated on the basis of family income, something which is already done for the GIS. Senior couples will be treated equally, through separate, equal cheques for each spouse.

After the legislation to bring in the Seniors Benefit is introduced later this year, a parliamentary committee will hold public hearings. In the meantime, individuals and groups are encouraged to send their comments to: