Hit richer seniors harder! No OAS!

[NAB]

Adjust clawback to solve OAS conundrum

This makes far more sense to me than increasing retirement age/OAS eligibility from 65 to 67

http://www.theglobeandmail.com/globe-in ... le2339875/

Use the money saved to elevate the OAS and GIC for those who are struggling to survive and make ends meet at the lower retirement income levels.

Nab

[normaM]

I disagree.

[NAB]

I disagree.

Care to tell us why norma? I've always considered it rather ludicrous that retiree's pulling in just slightly less than 70 grand a year from sources other than OAS, even a multi - millionaire I knew (in terms of assets, not income), get monthly (non-taxable?) OAS cheques from the public purse. It's not like CPP where you can actually contribute to a government run personal pension plan through your working life, ....OAS (and if applicable the GIS) comes out of general tax revenues.

Nab

[Logitack]

i dont see the problem, they (the government) are already clawing back the amount paid to those collecting OAS based on their net income. those earning more than 70 k get the oAS amount clawed back, right? So, are you suggesting that the clawback limit be reduced from 70k? That would obviously lower the OAS payouts to seniors. What would the net income be set at to have more money being clawed back?

[CJT84]

NAb I agree with you but the government should pay them back all the premiums they paid into OAS then.

[Glacier]

What he said
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[Bsuds]

We contribute to CPP not OAS so there is nothing to return.

[CJT84]

We contribute to CPP not OAS so there is nothing to return.

You're right sorry its early and got confused there.

[Corneliousrooster]

I agree!

This basically equates to welfare for seniors (please don't attach the stigma of "welfare" to the statement - just calling it what it is)

If you bring in a certain amount of money per month or have a certain amount of assets you do not qualify for welfare so why should a wealthy senior qualify for OAS?

[twobits]

I agree!

This basically equates to welfare for seniors (please don't attach the stigma of "welfare" to the statement - just calling it what it is)

If you bring in a certain amount of money per month or have a certain amount of assets you do not qualify for welfare so why should a wealthy senior qualify for OAS?

I agree but you have to be very careful in how the asset test is determined. You could have a widow in the family home that is worth a bundle on the market and little cash in the bank. Do we insist she liquidate or reverse mortgage the family home? And what of the people in opposite situations who instead rented, invested in stocks, and have a nice portfolio? Will they point to the widow and say their wealth is the same......it was just a different investment/savings method?

[Corneliousrooster]

I agree but you have to be very careful in how the asset test is determined. You could have a widow in the family home that is worth a bundle on the market and little cash in the bank. Do we insist she liquidate or reverse mortgage the family home? And what of the people in opposite situations who instead rented, invested in stocks, and have a nice portfolio? Will they point to the widow and say their wealth is the same......it was just a different investment/savings method?

That is why I used welfare as the example. I know some will find ways to slip through the cracks (they always do), but having to disclose your financial information and assets as part of the application does weed out some who should not qualify.

People make decisions through out there life and not all of them turn out how we plan. If your house is worth alot and you have little money in the bank - would it make more sense for that person to sell and downsize so they could end up with a nest egg, or should the taxpayers hand over money to someone who is wealthy on paper because they will be inconvenienced by having to make changes to their life to reach an economic balance without a OAS subsidy?

[normaM]

I have a long long list of reasons.. some which would only lead to fighting here ( imagine arguing on CNet LOL)

[Urbane]

I agree Nab. It makes far more sense to get the money to those who need it rather than continuing a system that gives money to those who don't. Moving the age from 65 to 67 still means that tax money is being used to support some seniors who don't need the support. By the way, there are loopholes in the current clawback system and I personally know of someone earning well over $100,000 a year not being clawed back. And I know of people who have left Canada, now earning well over $100,000, but still collecting the full OAS. Think about it . . . if 98% of those over 65 are getting at least a partial OAS payment and 95% are receiving the full OAS payment it tells you that there are loopholes with the clawback.

[Gilchy]

GIS is essentially welfare for seniors. You can argue over whether it is sufficient or not, but it is different than OAS.

According to Service Canada's website, OAS is the cornerstone of Canada's retirement income system. It is available to all Canadians who have lived in Canada for at least 10 years after age 18, unless your income is high enough to have it clawed back). In order to qualify for the full benefit, you must have lived in Canada for 40 years. Anyone who has loved in Canada for 40 years as an adult has likely paid taxes for 40 years, and so the argument that they don't pay into OAS is a fallicy. Additionally, higher income earners pay proportionately more tax, and so have contributed a larger share of what will be returned as OAS payments to seniors.

We already call anyone who makes more than ~$70k/yr a high income senior who doesn't need something they've paid in to for up to 40 years. I don't see clawing that lower as fair at all.

[twobits]

I agree but you have to be very careful in how the asset test is determined. You could have a widow in the family home that is worth a bundle on the market and little cash in the bank. Do we insist she liquidate or reverse mortgage the family home? And what of the people in opposite situations who instead rented, invested in stocks, and have a nice portfolio? Will they point to the widow and say their wealth is the same......it was just a different investment/savings method?

That is why I used welfare as the example. I know some will find ways to slip through the cracks (they always do), but having to disclose your financial information and assets as part of the application does weed out some who should not qualify.

People make decisions through out there life and not all of them turn out how we plan. If your house is worth alot and you have little money in the bank - would it make more sense for that person to sell and downsize so they could end up with a nest egg, or should the taxpayers hand over money to someone who is wealthy on paper because they will be inconvenienced by having to make changes to their life to reach an economic balance without a OAS subsidy?

I think we can agree that an income test is wasp nest. Too easy to hide assets in the family as well. Personally I like the idea of just lowering the rate at which clawback begins as well as accelerating the rate of clawback. This would be the easiest to administer (straight off the tax return) and net the highest benefit in program savings.