One of the most important announcements in the 1996 federal budget was the creation of a new Seniors Benefit, to take effect in the year 2001. In the following, I will explain how the benefit will work and how it might affect you.
If you have further questions, I encourage you to contact my office. The federal government has also set up a hotline to deal with your inquiries. The hotline number is 1-800-343-8282, TAD: 1-800-465-7735. Operators are available between 7 a.m. and 9 p.m. local time, Monday to Friday.
Or to access through the World Wide Web click here.
What is the Seniors Benefit?
The Seniors Benefit is a proposed new income support system for Canadian seniors. It will replace the existing Old Age Security and Guaranteed Income Supplement benefits, and will incorporate the existing age and pension income tax credits.
Why do we need a new system?
Canadians are living longer and healthier lives than ever before. As a result, seniors are drawing benefits for a much longer period than when the existing programs were designed. As well, our birthrate has fallen dramatically in recent years. This means that over the next few decades, there will be more and more seniors drawing benefits, and fewer and fewer working age Canadians paying taxes to cover the cost.
If this trend goes on for too long, we might not be able to afford retirement benefits for our children and grandchildren. Over time, the Seniors Benefit will reduce costs, guaranteeing that future generations of seniors will enjoy as good protection as seniors today.
Didn’t the Prime Minister promise that benefits would not be cut?
The Prime Minister promised that current seniors would not be affected by any changes to income support programs.
The Seniors Benefit keeps this promise. Current seniors will not be affected, unless they want to be. Anybody who was 60 or older on December 31, 1995, can choose to keep their existing benefits. Many seniors will actually qualify for higher benefits under the new system, and they can take advantage of that if they wish.
Will the Seniors Benefit be taxable?
No. The Seniors Benefit will be a tax-free income supplement. Seniors will not have to declare it on their income tax returns, and there will be no clawbacks at tax time. People will keep every penny they receive.
How will the Seniors Benefit be paid?
The Seniors Benefit will be delivered once a month. For couples, payments will be made in separate and equal cheques to each spouse.
How will GIS recipients be affected?
Current GIS recipients will receive an extra $120 per year under the new system.
Will the Spouse’s Allowance Program be affected?
The Spouse’s Allowance Program will remain in place, and payments will be increased by $120 per year.
How will the Seniors Benefit protect seniors from inflation and rising prices?
Due to changes made by the Conservatives, current benefits for seniors do not increase enough to reflect inflation.
The Seniors Benefit will be fully indexed to inflation, giving seniors full protection against rising prices.
Is the Seniors Benefit just a way of cutting spending at the expense of seniors?
No. Current seniors will not be affected, unless they want to take advantage of the new system. More than 75% of current and future seniors will receive the same or even higher benefits under the new system, than they would with the existing OAS/GIS. Nine out of ten single women will receive equal or higher benefits.
By better targeting the benefit, we can reduce long-term costs while also increasing benefits for those most in need.
Will seniors have to apply for the Benefit every year?
No. Current seniors, if they choose the new benefit, will only have to apply once, and will be able to do so any time they choose.
Future seniors will only have to apply once, upon reaching age 65.
How will benefit levels be calculated?
Seniors Benefit levels will be automatically calculated each year, based on the previous year’s income tax return.
For couples, benefits will be calculated based on the combined income of each spouse. This is the way GIS has always been calculated. Couples now receiving GIS already have their benefits determined on the basis of their combined income. Since low-income couples already have their benefits calculated based on combined income, it is only fair that we apply the same rule to high-income couples as well. This will ensure fairness and equality in the treatment of all couples, regardless of how their income is split between spouses.
How will I know which system is better for me?
In 1996, 46% of seniors will have incomes below $20,000, and another 33% will be between $20,000 and $40,000. Only 5% have incomes over $75,000.
Single seniors with incomes below $40,000, and couples with a family income below $40,000, will receive the same or higher benefits with the new system. In the future, seniors with incomes above this level will see lower benefits. About 9% of the richest seniors will not receive benefits.
However, in keeping with our commitments, current high-income seniors can maintain their existing benefits. The changes only affect future generations.
After the legislation to bring in the Seniors Benefit is introduced, a parliamentary committee will hold public hearings. In the meantime, you are encouraged to send your comments to:
This page was created and is maintained by