OAS Elegibility going up to 67

[GP_Matt]

To sum up darklord's posts, I think he is suggesting a system whereby people who worked hard and saved money get nothing, people who worked hard but saved no money will get government assistance and people who didn't work hard and saved nothing will receive nothing. Also maybe we will throw something for the disabled if they can prove that they are really disabled and not faking.

[valo403]

Originally Posted by darklord700

If this is your hard question, then yes, I proposed a plan to reward hard work and excellence. Please don't sensationalist the debate by including disabled people. If you don't work when you can, the society doesn't owe you much when you can't work.

The hard question would be the two times I've asked you to a) Point out these countries you claim have so excellently removed themselves from OAS type programs without consequence, and b) identify the social programs they have instituted to avoid dramatically diminishing the quality of life of a significant portion of their population.

From what I can tell your idea is about on par with the gift suites they setup for celebrities at the Oscars. A bunch of rich people who have the ability to purchase anything they need or want being given everything for free.

[darklord700]

That's correct, Matt.

Work=OAS
Not work = No OAS

And if you have asset (saved) then you get no OAS even if you worked.

[darklord700]

Originally Posted by valo403

Ta) Point out these countries you claim have so excellently removed themselves from OAS type programs without consequence, and b) identify the social programs they have instituted to avoid dramatically diminishing the quality of life of a significant portion of their population.

I never mention a country having and then remove their OAS type program. I said there are countries never ever had OAS and their seniors didn't suffer because of the absent of it.

[valo403]

Originally Posted by darklord700

I never mention a country having and then remove their OAS type program. I said there are countries never ever had OAS and their seniors didn't suffer because of the absent of it.

Okay, and as I said initially unless you're proposing time travel those examples would then be irrelevant in the short term.

Still, the questions stand on a long term basis. If you want Canada to switch to a system such as those countries (which you have still not even made a passing reference to by name) what programs have they instituted to avoid the negative consequences of not having an OAS type program? What do they do differently, and why is it better?

You're not answering questions or proposing alternatives. You're saying 'lazy people shouldn't get money' and 'people who work should get money'. That's great, but the world isn't that simple.

[darklord700]

Originally Posted by valo403

You're not answering questions or proposing alternatives. You're saying 'lazy people shouldn't get money' and 'people who work should get money'. That's great, but the world isn't that simple.

I did propose an income and assets based OAS system similar to our CPP. What I mostly object about the current OAS is that you hit a certain age, you get to collect. Doesn't matter if you live in a million dollar house or on the street, you get to collect OAS/GIS more or less.

[Rathji]

Originally Posted by bizaro86

Giving money to people who would otherwise be destitute so they aren't is a good idea.

Out of curiousity, how much money would you have the gov't give a senior couple with equal incomes and a combined income of 130k per year? If I was picking, that amount would be zero. Right now they would get the full amount of OAS.

The cutoff before you stop getting any OAS is >100k per year for an individual. Now, I know CP's average income is greater than the Canadian average, but is anyone really in favour of direct income transfers to people making >100k per year? How can you possibly justify that?

darklord is suggesting that no one should be getting OAS, not that well off people shouldnt be. He is claiming that they shouldn't be given cash, but given training so they can be productive in society and earn their way. edit: reading further, obviously I have been mistaken and he only wants it abolished for people who are either very rich (and obviously don't need it) or poor because they didn't work.

I have no problems with changing the way OAS applies to people of various age or income categories, but I have serious problems with abolishing it all together.

[Azure]

Originally Posted by darklord700

That's correct, Matt.

Work=OAS
Not work = No OAS

And if you have asset (saved) then you get no OAS even if you worked.

If you work, you pay into CPP, and after you retire you can withdraw from CPP.

OAS is different, and should be different than CPP.

I think the solution we would all agree on is pretty simple.

CPP should be expanded, both in the amount people can pay-in, and as a result draw out when they retire. This should of course be done in a manner where the program is stable in the long-term. Very long-term actually. And should problems arise where CPP couldn't fund itself through people paying in and the investments they make, then you do whatever it takes to make sure it stays stable.

From there you make a choice between OAS and GIS. Both programs more or less help seniors. We don't need both, but the one we DO keep needs to be restructured to make sure it helps the poor and needy first and foremost, and from there it needs to start clawbacks at a specific income. My opinion is anyone that makes 10% more than the average wage in Canada doesn't need OAS/GIS. They already pay into CPP, and with RRSP, the tax free plan, and various other ways to save for retirement, I don't think a 'welfare' program is necessary for them. The clawback should begin around $30,000/year income. This way the program would be directed at those 'few' people that really can't help themselves. CPP covers those that can. And IMO, provinces should also run a good, solid and stable pension plan. Or there should be some good tax benefits setup for employers that have a pension plan.

[bizaro86]

Originally Posted by Rathji

darklord is suggesting that no one should be getting OAS, not that well off people shouldnt be. He is claiming that they shouldn't be given cash, but given training so they can be productive in society and earn their way. edit: reading further, obviously I have been mistaken and he only wants it abolished for people who are either very rich (and obviously don't need it) or poor because they didn't work.

I have no problems with changing the way OAS applies to people of various age or income categories, but I have serious problems with abolishing it all together.

I'm definitely not purporting that darklord's argument is correct, as I'm honestly having a hard time following it. The thread seems to have devolved into whether we should keep OAS at all, which is a bit ridiculous, as killing it completely would be political suicide.

Changing eligibility slowly over time to 67 is perfectly reasonable, and was the thread's original topic. As I mentioned above, there's no reason that 100% of the increase in lifespan should be allocated to taxpayer funded retirement.

Changing the clawback hurdles is also completely reasonable. The people collecting and about to begin collecting OAS have consistently (as a generational group) spent more on gov't services than they've paid, which is why the gov't debt exists. I don't see any reason why the cutoffs to clawbacks should be as high as they are, and haven't seen anyone really defend that. Someone who has a significantly above average income shouldn't be collecting money from a direct transfer social program.

[darklord700]

Originally Posted by bizaro86

I don't see any reason why the cutoffs to clawbacks should be as high as they are, and haven't seen anyone really defend that.

My guess on why the cut off is high is that it gives people dis-incentive to save if the cut off is low.

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.

The other reason I don't think the cut off would drastically be reduced is that the government has been touting RRSP for ages to provide for retirement. The downside of RRSP is that it would affect income tested benefit, aka OAS. So if I save all my life in RRSP only to see my OAS being reduced by lower cutoff when I retire, the government is going to hear from me.

[bizaro86]

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.

[The Yen Man]

So the cutoff is $70K in annual salary? That's crazy. A lot of people don't even make that right now, and they live fine. What's more, usually a senior doesn't have a mortgage to pay, plus all they get all the services either for free or at reduced prices (health, dental, optical, bus fare, etc etc). There should be no reason a senior cannot live off of $40K in annual salary.

[Slava]

Originally Posted by The Yen Man

So the cutoff is $70K in annual salary? That's crazy. A lot of people don't even make that right now, and they live fine. What's more, usually a senior doesn't have a mortgage to pay, plus all they get all the services either for free or at reduced prices (health, dental, optical, bus fare, etc etc). There should be no reason a senior cannot live off of $40K in annual salary.

Well the clawback starts at $67k or so. So if you receive an income up to that amount you get every penny of OAS (assuming that you are over 65 and meet the other qualifications regarding residency/citizenship). For every $100 over this you lose $15 of the OAS figure, until about $108k at which point the OAS paid is zero.

[darklord700]

Originally Posted by bizaro86

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.

I think the maximum a couple could get from OAS/GIS is about $30K a year now. If the cut off is $35K, you got a problem. Because if you save nothing, you get $30K already, the messy extra $5K or even $10K don't give people much incentive to save.

That's why I "guess" the cut off is high at $67K.

[bizaro86]

Originally Posted by darklord700

I think the maximum a couple could get from OAS/GIS is about $30K a year now. If the cut off is $35K, you got a problem. Because if you save nothing, you get $30K already, the messy extra $5K or even $10K don't give people much incentive to save.

That's why I "guess" the cut off is high at $67K.

The current cutoff is based on individual income, so a couple could have ~65k EACH before they start losing OAS. I'd suggest reducing that to ~35k each and then OAS starts getting clawed back.

[GP_Matt]

With pension splitting now an option it opened up a lot of couples to full OAS when traditionally only one would qualify. It seems wrong that something like pension splitting which is a huge benefit already would also provide the additional benefit of reducing your OAS clawbacks.

[bizaro86]

Originally Posted by GP_Matt

With pension splitting now an option it opened up a lot of couples to full OAS when traditionally only one would qualify. It seems wrong that something like pension splitting which is a huge benefit already would also provide the additional benefit of reducing your OAS clawbacks.

Yeah. Right or wrong you can expect politicians to pander to the old person vote. That's why the current OAS reform is dying, even though it would have no impact on anyone currently old.

[Azure]

Originally Posted by bizaro86

Yeah. Right or wrong you can expect politicians to pander to the old person vote. That's why the current OAS reform is dying, even though it would have no impact on anyone currently old.

Yup, gotta keep increasing the debt load that my generation will have just to please those damn baby boomers.