Boost to seniors benefit this summer and beyond could cost $10.7 billion, PBO says
Published Wednesday, June 23, 2021 12:31PM EDT
OTTAWA -- The parliamentary budget officer is estimating the Liberals' plan to send one-time payments this summer to seniors over 75 and then boost their old-age benefits thereafter will cost slightly less than the government estimates.
April's budget estimated that the overall cost of the measures would amount to just over $12 billion over five years before accounting for tax revenues that will offset a small part of the overall spend.
The budget office in a report Wednesday estimates the gross cost will be closer to $10.7 billion.
The spending starts this summer with the government's planned one-time payment of $500 in August to every senior who will be 75 and over by the summer of 2022.
And come next summer, the Liberals are also proposing a 10-per-cent boost in old age security for those over 75, which the budget estimated would provide an extra $766 in benefits to 3.3 million retirees.
The budget estimated the net cost of the measure, once accounting for extra tax revenues, at almost $10.7 billion, while the budget officer's report puts it closer to $9.9 billion.
The Liberals promised in the 2019 election to bump up old age security payments, which already rise in line with inflation, arguing that older seniors needed additional help covering costs later in life.
During an appearance at the House of Commons committee last month, Seniors Minister Deb Schulte noted that about 34 per cent of seniors under 75 have jobs to supplement their income, but the figure drops to 15.4 per cent above that age -- one of several figures she cited to explain the financial disparity between the two cohorts.
"I can go on and on with the data and the statistics that show us that our older seniors are more vulnerable and in more need of support," she said.
"We are seeing seniors living much longer, having more complications as they get older, facing more costs and being really afraid of running out of their savings."
But then the pandemic hit. Last year, the government decided it needed to send extra money to seniors, arguing they faced increased costs during lockdowns in the first wave of COVID-19 in Canada.
Federal calculations last spring landed on $300 payment to the more than six million people who receive old age security, and $200 more for 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 seniors, peppered departmental officials about the need to send a second round of payments this summer, ahead of a potential election in the fall.
The answer they received back was that it was a budget decision.
Schulte told MPs at that May meeting that the pandemic had put the kibosh on another campaign promise, that to work with provinces to increase the value of Canada Pension Plan payments to widows and widowers.
The minister said federal and provincial officials decided it wasn't the right time to increase employer and worker contributions into the plan to cover the costs of increased benefits.
This report by The Canadian Press was first published June 23, 2021.