Quote:
Originally Posted by darklord700
If the cut off is low, say $5K, then any dollar I save now is actually some dollar I will lose in OAS. Hence, I'm not going to save. With the cut off being high, then I'll save more than when the cut off is low.
|
Saying the cutoff should be >5k isn't the same thing as saying it should be >60k. There's an awful lot of room in the middle there that would be reasonable. As to the incentive, that's why OAS is clawed back gradually. If you have an extra $1 of income over the threshold, you lose ~$0.15 (iirc) of OAS.
That's why a single person can make more than one hundred thousand dollars and still collect some OAS. Does that seem right to anyone?
I've seen lots of arguments OAS is needed and the cutoff shouldn't be ridiculously low (ie $5k). Not many arguments that it should be at it's current (very high, imo) level. I'd be in favour of lowering the thresholds dramatically, say to ~35k-40k for the start of the phase out and $75k for top end limit.