Da Legal Stuff...

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Tuesday, January 31, 2012

OAS Changes will Cause Aboriginals & Poor to Die Sooner

Part 3 in a series on potential Old Age Security (OAS) changes.

That's right increasing the age of eligibility for Old Age Security will disproportionatly affect the poorest Canadians and those of Aboriginal descent, in fact it may even cause them to die years earlier than they would otherwise.

Who will suffer the most the age of eligibility for Old Age Security is raised from 65 to 67 or even higher? That’s the question I’ll try to shed some light on today.

Of course anyone already receiving OAS won’t be affected. If you believe the governing Conservatives, those close to 65 (nobody knows how close) won’t be either, but beyond that everyone who expects to makes less than a 100+ thousand a year after retirement will assuredly be affected.

With the state of company sponsored pensions and RRSPs, the high debt levels in Canada and the level of unemployment in various parts of the Country are any indication that’s likely to mean a very large portion of Canada’s population will be in serious trouble as they age.

For some it may mean having to work an additional 2 years (or whatever the number turns out to be).

Working longer may be an inconvenience for those in good health with white collar occupations but it might be a major problem for blue collar workers in physically demanding jobs. I sure wouldn’t want to be climbing around a construction site or loading tractor trailers late into my sixties, especially if my joints were already fighting back from years of abuse.

Even those lucky enough to have company pensions may feel the heat. What would happen if (as an example) it was decided to raise the age of qualification for anyone more than 5 out, in other words anyone under 60. What would happen to someone who retired already, say at 55 with a small company pension and enough savings to supplement their income until 65 when they expected to collect OAS?

Most company pension plans are designed to be clawed back by a substantial amount once a retiree reaches 65. If that happens what would an existing retiree do for income when his company pension is reduced and he or she still doesn’t qualify for OAS?

For some things might get pretty rough. It could mean less money after retirement to cover the cost of luxuries such as groceries, rent medications or heat. That’s bad enough but it could be worse…

What if the changes made you die sooner than you would have otherwise? Think it can’t happen, think again.

Many individuals can make arguments for leaving the age as it is but beyond the standard concerns across Canada there are two groups who could be hit pretty hard by a rise in the age of qualification.

The poor and Aboriginals

The Harper government claims that because people live longer today than they did in the 1960’s, when the qualification age was set at 65, something has to be done to offset this extended lifespan.

The average Canadian is indeed enjoying a longer life today but what he neglects to say is that the poorest Canadians and those of Aboriginal descent tend to die much younger than the average. This means that a rise in the age of eligibility will disproportionately penalize those groups by taking more money from their pockets than from anyone else. So much for Canadian equality.

1 comment:

Anyong said...

I can't believe you are not inundated with comments from Newfoundlanders alone. However, you are dead on.