OTTAWA – The Parliamentary Budget Officer estimates the Liberals’ plan to send one-time payments this summer to people over 75, and then increase their old age benefits afterward, will cost slightly less than the government’s estimates.
The April budget estimated the overall cost of the measures to be just over $ 12 billion over five years before factoring in tax revenues that will offset a small portion of overall spending.
The budget office, in a report released Wednesday, estimates the gross cost will be closer to $ 10.7 billion.
Spending begins this summer with the government’s planned one-time payment of $ 500 in August to every senior who turns 75 and over by summer 2022.
And next summer, the Liberals are also proposing a 10% increase in Old Age Security for those over 75, which the budget said would provide $ 766 more in benefits to $ 3.3 million. retirees.
The budget estimated the net cost of the measure, after factoring in additional tax revenue, to be nearly $ 10.7 billion, while the budget director’s report puts it closer to $ 9.9 billion.
The Liberals promised in the 2019 election to increase old age security payments, which are already rising with inflation, arguing that older seniors need extra help to cover costs later in the day. life.
In an appearance before the House of Commons committee last month, Seniors Minister Deb Schulte noted that about 34% of people under the age of 75 have a job to supplement their income, but that that figure drops to 15.4% above that age – one of many cited to explain the financial disparity between the two cohorts.
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“I can go on and on with the data and statistics that show us that our older seniors are more vulnerable and need more support,” she said.
“We are seeing older people living a lot longer, having more complications as they get older, facing more costs and really afraid of running out of their savings.”
But then the pandemic struck. Last year, the government decided it needed to send extra money to seniors, arguing they faced increased costs during shutdowns from the first wave of COVID-19 in Canada.
Federal calculations last spring resulted in a payment of $ 300 to the more than six million people who receive Old Age Security, and $ 200 more to the 2.2 million who also receive the Guaranteed Income Supplement.
Opposition MPs on the Social Development Committee who were studying the impact of COVID-19 on the elderly, have peppered ministry officials with the need to send a second round of payments this summer, ahead of a possible election to autumn.
The response they received was that it was a budget decision.
Schulte told MPs at that May meeting that the pandemic put the kibosh on another campaign promise, that of working with the provinces to increase the value of Canada Pension Plan payments to widows and widowers.
The minister said federal and provincial officials have decided it is not the right time to increase employer and worker contributions to the plan to cover the costs of increasing benefits.
This report by The Canadian Press was first published on June 23, 2021.
Jordan Press, The Canadian Press