A new report argues that efforts to revamp the Canada Pension Plan (CPP) should take a back seat to a couple of straightforward policy reforms that would take the majority of single impoverished seniors out of poverty.
The CPP policy ideas currently being batted around are unlikely to offer much help to this group, according to a paper written by Jack Mintz and Philip Bazel for The School of Public Policy, University of Calgary.
They say that’s because a lot of seniors have no claim to a CPP entitlement—and, with seniors’ working years behind them, proposed expansions to CPP for retirement income adequacy would not address the current needs of the most vulnerable seniors; namely, single seniors. Nearly one-third of them have an income of less than $20,000.
This group is largely composed of women—roughly 70% are female—many of whom may have no entitlement to CPP, having concentrated their work efforts in the home.
The authors say that fixing this situation comes down to just two seemingly simple policy changes: topping up the Guaranteed Income Supplement for single elderly households and an expansion in CPP survivor benefits.
The former could be done to varying degrees, but, as an example, the authors indicate that increasing the top-up to $3,000 would reduce the number of elderly Canadians currently below the low-income cut-off threshold by nearly 165,000, or almost half. The cost of the change would be $1.35 billion.
And their proposal to expand survivor benefits from 60% of the deceased spouse’s entitlement to 100% would cost roughly $2.8 billion.
“Putting such a policy in place, one that advances the security and dignity of the most vulnerable seniors, comes with a very reasonable price tag,” the report states. “Amidst the current discussion focused on the adequacy of pensions for middle-class and well-off seniors, it is hard to see why a policy that ensures the welfare of our lowest-income seniors does not take some precedence.”