The Canadian government will increase old age security (OAS) starting next week, a move the feds say will be the first permanent raise to the pension in nearly 50 years.
The initiative will see OAS permanently increased by 10 per cent for seniors 75 and older.
A statement released by the federal government on Thursday says that besides adjustments for inflation, this will be the first permanent increase to the pension since 1973.
The federal Liberals mentioned the 10 per cent increase to OAS in their platform and later included the measure in the 2021 budget.
But the commitment goes as far back as the 2019 federal election, when Prime Minister Justin Trudeau made the announcement on the campaign trail.
“The permanent increase to the OAS pension will help provide older seniors with greater financial security now and in the future,” Seniors Minister Kamal Khera said in the federal government’s statement Thursday.
“Younger seniors — and all Canadians — can enjoy greater peace of mind while planning their retirement finances, knowing they will be able to count on more support from the OAS pension in their later years.”
The OAS pension pays out monthly to seniors 65 and older in Canada.
Full pensioners can expect to receive more than $800 in additional funds over the first year, the statement from the federal government says, with 3.3 million seniors benefiting.
The federal government offered a one-time $500 payment in August 2021 to seniors eligible for OAS. This also was part of last year’s budget.
The increase comes after Canada’s inflation rate rose 8.1 per cent in June over the previous year, making it the largest annual increase since January 1983.
Anthony Quinn, chief community officer for the Canadian Association of Retired Persons (CARP), told CTVNews.ca in a phone interview on Friday that while the increase to OAS is welcome, a 10-year cohort of seniors between 65 and 75 is still exempt.
“We are glad that the government is looking at OAS, but they’re leaving out a large portion of seniors who are in need,” Quinn said.
In May 2021, CARP, along with the National Association of Federal Retirees and Réseau FADOQ, called on the Trudeau government to increase OAS benefits by 10 per cent for all eligible seniors, not just those 75 and older.
“This measure discriminates on the basis of age and risks setting a dangerous precedent by creating two classes of seniors,” a statement released by the three organizations said.
Quinn said while OAS is reviewed quarterly and measured by the consumer price index, what CARP members tell him is that the indexing does not match the reality they experience when it comes to the cost of food, transportation, shelter and health care.
“Not only during the most immediate inflationary period, but generally those costs have been rising and seniors have not been seeing it reflected in the OAS indexation,” Quinn said.
With files from The Canadian Press
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