The Government of Canada Plans Changes to Ensure the Sustainability of the OAS Program

MONTRÉAL, QUEBEC--(Marketwire - March 30, 2012) - The Harper Government has announced changes to ensure the sustainability of the Old Age Security (OAS) program for future generations of Canadians.

"Our government is committed to sustainable social programs and a secure retirement for Canadians," said the Honourable Christian Paradis, Minister of Industry and Minister of State (Agriculture). "Our changes will ensure that OAS is put on a sustainable path so it is there when Canadians need it."

"The number of OAS beneficiaries is expected to almost double over the next 20 years," said the Honourable Diane Finley, Minister of Human Resources and Skills Development. "In response to Canada's changing demographics, our government is determined to take the necessary measures to safeguard the OAS program for all Canadians."

Change in age of eligibility

The main change to the OAS program is an increase to the eligibility age for the OAS pension and Guaranteed Income Supplement (GIS) from 65 to 67. Anyone aged 54 or older as of March 31, 2012, will not be affected by the proposed changes to the eligibility age. Current OAS beneficiaries will continue to receive their benefits.

The allowances

The age of eligibility for the Allowance and the Allowance for the Survivor will also increase from the current eligibility age of 60 to 64 to age 62 to 66.

Notification and phase-in

People born between April 1, 1958, and January 31, 1962, will become eligible to receive their OAS benefits and GIS between the ages of 65 and 67, depending on their birth date. People born on or after February 1, 1962, will be eligible for their OAS benefits and GIS at the age of 67.

The substantial notification and subsequent phase-in period will allow Canadians ample time to make adjustments to their retirement plans.

Other government programs

The government will ensure that certain federal programs, including programs provided by Veterans Affairs Canada and Aboriginal Affairs and Northern Development Canada, currently providing income support benefits until age 65, are aligned with changes to the OAS program. The government will compensate provinces and territories for net additional costs they face resulting from the increase in the age of eligibility for OAS benefits.

Voluntary deferral

To improve flexibility and choice, the Government of Canada will introduce a voluntary deferral for the OAS pension. This will enable Canadians, if they so choose, to delay receipt of their OAS pension by up to five years in exchange for an actuarially adjusted higher pension. This option will be available in July 2013.

Proactive enrolment

The government will also improve services for seniors by implementing proactive enrolment for OAS and GIS. This measure would be phased in between 2013 and 2015 and will reduce the requirements for seniors to apply for these benefits, along with creating administrative savings.

For additional information on how OAS is being safeguarded for future generations, please visit the Service Canada website on Retirement Planning (servicecanada.gc.ca/retirement).