Future taxation

[someone123]

Originally Posted by Truenorth00

What's also crazy is how much these programs benefit seniors while reducing assistance to working families. Why is the CCB and OAS thresholds not the same? Nothing says we support seniors more than working parents line skewing support to seniors.

The bottom line is CPP and OAS were designed to help alleviate poverty in seniors, which used to be a big problem. If you are earning $100,000 a year or even $75,000 a year you are not impoverished.

There are seniors out there who cannot work at all and are forced to live only on CPP and OAS. And there are working people who live on $12 an hour in Canada.

[Corndogger]

Originally Posted by Doug

Im saying push OAS eligibility back to 67 as per the Harper plan. Canceling the planned increase in the age was probably the most regressive move made by the Trudeau government. Also, claw back all of OAS and Child Tax Benefit at $75K.

OAS is an incredibly expensive program.

Pushing the OAS back to 67 would result in riots. One of the hardest hit groups by the virus is people nearing retirement age, especially women. The odds of them getting back into the workforce if they lost their jobs is very low. Making them wait another two years to qualify would likely result in an increase in homelessness or a big spike in very poor seniors over the next five years or so. Their CPP payments will also likely suffer because of the pandemic unless the government addresses the issue. Clawing back all of OAS at $75K makes a lot of sense.

[Corndogger]

Originally Posted by someone123

The bottom line is CPP and OAS were designed to help alleviate poverty in seniors, which used to be a big problem. If you are earning $100,000 a year or even $75,000 a year you are not impoverished.

There are seniors out there who cannot work at all and are forced to live only on CPP and OAS. And there are working people who live on $12 an hour in Canada.

Exactly! According to the government website the current [OAS] maximum payment is $613.53 which isn't very much. What's crazy though is that an individual can make as much as $128,137 and still qualify for some portion of that payment. Why would they think someone with an income of over $10K/month would need help? If anything, they should lower the cutoff amount considerably and raise the payment for the poorest people. Doing so would probably save us in other ways.

[Truenorth00]

Honestly, UBI or a negative income tax might be an okay idea for seniors. Incentive to work isn't as big a consideration and we want to keep them out of poverty. So something like $30k or whatever it takes to keep them out of poverty.

[Corndogger]

Originally Posted by Truenorth00

Honestly, UBI or a negative income tax might be an okay idea for seniors. Incentive to work isn't as big a consideration and we want to keep them out of poverty. So something like $30k or whatever it takes to keep them out of poverty.

A UBI of $30K would help a lot of seniors. Extend that to younger poor people and I think there would be a lot of support. I know some will say young people will just sit at home playing video games but I think the vast majority of people want to do something productive with their lives. They could use the money to upgrade their education and from there get decent jobs and pay taxes.

[CityTech]

Originally Posted by Corndogger

Pushing the OAS back to 67 would result in riots. One of the hardest hit groups by the virus is people nearing retirement age, especially women. The odds of them getting back into the workforce if they lost their jobs is very low. Making them wait another two years to qualify would likely result in an increase in homelessness or a big spike in very poor seniors over the next five years or so. Their CPP payments will also likely suffer because of the pandemic unless the government addresses the issue. Clawing back all of OAS at $75K makes a lot of sense.

Agreed. I remain opposed to increasing the OAS age. But I would definitely support lowering the clawback thresholds. I do think we have to consider the impact on people who planned their retirements around the current rules though. Given that the OAS clawback thresholds are adjusted for inflation, I'd say a fair way to do that would simply be to have the OAS clawback threshold simply rise by 1% less than the rate of inflation every year for the next 15 years or so.

I'd favour having a third of the savings from this be used to increase GIS payments, and having the other two thirds go to the federal balance sheet. This way we're making the old age support system fairer and less costly at the same time.

CPP expansion will, in the long run, ultimately reduce the cost of both OAS and GIS by increasing CPP payouts thus tipping more people above GIS and OAS phaseout thresholds. But that will take a very long time to take full effect, seeing as how people getting anything significant from the CPP expansion won't be retiring until the middle of this century.

[Corndogger]

Originally Posted by CityTech

Agreed. I remain opposed to increasing the OAS age. But I would definitely support lowering the clawback thresholds. I do think we have to consider the impact on people who planned their retirements around the current rules though. Given that the OAS clawback thresholds are adjusted for inflation, I'd say a fair way to do that would simply be to have the OAS clawback threshold simply rise by 1% less than the rate of inflation every year for the next 15 years or so.

I'd favour having a third of the savings from this be used to increase GIS payments, and having the other two thirds go to the federal balance sheet. This way we're making the old age support system fairer and less costly at the same time.

CPP expansion will, in the long run, ultimately reduce the cost of both OAS and GIS by increasing CPP payouts thus tipping more people above GIS and OAS phaseout thresholds. But that will take a very long time to take full effect, seeing as how people getting anything significant from the CPP expansion won't be retiring until the middle of this century.

I'm looking at GIS info from the government and you need to be making very little (~$18K/yr) to qualify. There's an announcement however on the page that appears to indicate people on GIS will be allowed to make a certain amount of money without being booted off the benefit.

Enhancements to the Guaranteed Income Supplement and the Allowance

Effective July 2020, the following enhancements to the Guaranteed Income Supplement (GIS) earnings exemption will come into effect:

• expanded eligibility for the earnings exemption to include both employment and self-employment income
• an increase to the amount of the full exemption from $3,500 to $5,000 per year for each GIS or Allowance recipient, as well as their spouse or common-law partner, and
• a new partial exemption of 50%, to apply on up to $10,000 of annual employment and self-employment income beyond the new $5,000 threshold for each GIS or Allowance recipient, as well as their spouse or common-law partner

The enhanced earnings exemption will become effective for the July 2020 to June 2021 payment period and will apply to income made in the 2019 calendar year or later. Upon receipt of your annual income (and/or your spouse’s or common-law partner’s income), Service Canada will automatically apply the new GIS earnings exemption. The maximum amount of earnings that can be exempted is $10,000.

Source: https://www.canada.ca/en/services/benefi...ed-income-supplement/benefit-amount.html

[WarrenC12]

Originally Posted by Doug

Im saying push OAS eligibility back to 67 as per the Harper plan. Canceling the planned increase in the age was probably the most regressive move made by the Trudeau government. Also, claw back all of OAS and Child Tax Benefit at $75K.

OAS is an incredibly expensive program.

I agree retirement/OAS age should be gradually pushed back.

$75k is a reasonable number to cap benefits, maybe even lower. I'm not sure that specific change will save us a ton of money though.

[WarrenC12]

Originally Posted by Corndogger

Pushing the OAS back to 67 would result in riots. One of the hardest hit groups by the virus is people nearing retirement age, especially women. The odds of them getting back into the workforce if they lost their jobs is very low. Making them wait another two years to qualify would likely result in an increase in homelessness or a big spike in very poor seniors over the next five years or so. Their CPP payments will also likely suffer because of the pandemic unless the government addresses the issue. Clawing back all of OAS at $75K makes a lot of sense.

I'm pretty sure we can control the 65 and 66 year olds rioting in the streets.

[WarrenC12]

I just figured out who on this thread is closing in on 65.

[Corndogger]

Originally Posted by WarrenC12

I just figured out who on this thread is closing in on 65.

WarrenC12, some of us are capable of looking at the world from the viewpoint of others. There would be a lot more than 66 and 67 year olds rioting. How can you not see that? I'd laugh if you got wish and the end result was a new poverty reduction program that started off at a much higher amount than the current $613/month. I will give you credit for being consistent about your greed. We're all aware of numerous posts waiting for your well-off propertywise family members to die so you can cash in on their real estate. If you were my kid I'd leave whatever I owned to the neighbor's daughter just to piss you off. :-)

For the record, I'm nowhere near 65 but I'm not going to say on which side. Age is just a number to me. As long as I can still get around on my own I don't care if I'm 38 or 96.

[Doug]

Originally Posted by Corndogger

Pushing the OAS back to 67 would result in riots. One of the hardest hit groups by the virus is people nearing retirement age, especially women. The odds of them getting back into the workforce if they lost their jobs is very low. Making them wait another two years to qualify would likely result in an increase in homelessness or a big spike in very poor seniors over the next five years or so. Their CPP payments will also likely suffer because of the pandemic unless the government addresses the issue. Clawing back all of OAS at $75K makes a lot of sense.

Like all the riots it caused in 2012:
https://www.ctvnews.ca/mobile/budget-confirms-old-age-security-push-to-age-67-1.788743

[WarrenC12]

Originally Posted by Corndogger

WarrenC12, some of us are capable of looking at the world from the viewpoint of others. There would be a lot more than 66 and 67 year olds rioting. How can you not see that? I'd laugh if you got wish and the end result was a new poverty reduction program that started off at a much higher amount than the current $613/month. I will give you credit for being consistent about your greed. We're all aware of numerous posts waiting for your well-off propertywise family members to die so you can cash in on their real estate. If you were my kid I'd leave whatever I owned to the neighbor's daughter just to piss you off. :-)

For the record, I'm nowhere near 65 but I'm not going to say on which side. Age is just a number to me. As long as I can still get around on my own I don't care if I'm 38 or 96.

Like when Harper did it?

The rollback of his policies was one of the things I disagreed with Trudeau doing. The hard part was done with little to no fanfare, and it made no sense to reverse IMO.

[vid]

Originally Posted by Corndogger

Exactly! According to the government website the current GST maximum payment is $613.53 which isn't very much. What's crazy though is that an individual can make as much as $128,137 and still qualify for some portion of that payment. Why would they think someone with an income of over $10K/month would need help? If anything, they should lower the cutoff amount considerably and raise the payment for the poorest people. Doing so would probably save us in other ways.

I make less than half that and get 🞵🞵🞵🞵 all from GST.

Originally Posted by WarrenC12

I just figured out who on this thread is closing in on 65.

As a millennial, my entire retirement plan is actually built on the concept that OAS won't exist in any form when I retire. I have no choice but to either fund it all myself, or die. So far I have enough saved up to live until I'm 65.2 years old!

[someone123]

One thing to note is that life expectancy is not necessarily still increasing across Canada. Life expectancy for men in BC for example was 80.5 in 2015 and fell to 79.9 by 2018. I have a feeling it's about to get worse. 170 British Columbians died of an overdose in May alone.

If we push back the OAS age while life expectancy falls we're accepting lower living standards for poor seniors.

I bet lower OAS clawbacks could save tons of money. Seniors are the richest age demographic in Canada and they make up a growing percentage of the total population.

But I think UBI might work well too, which runs contrary to OAS clawbacks. My main complaint isn't so much that OAS is extravagant, it's that it's misdirected. We balk at benefits for working poor with a very low quality of life in Canada (e.g. can't get dental work done because it's not covered) but for some reason it's acceptable politically to pay out OAS to seniors with millions saved and a six-figure income.

Note that there is also the Guaranteed Income Supplement on top of OAS, but that has a very low income threshold ($18,600 for an individual; but I don't think it counts wealth). It tops up OAS paid out to people who only lived in Canada for 10-40 years as an adult. So if you were to hypothetically immigrate to Canada as a 55 year old, you could live here on savings for 10 years then collect around $18k a year. Maybe Meng Wangzhou will qualify if we hold her long enough and her accountants manage things right.

[WarrenC12]

Originally Posted by vid

As a millennial, my entire retirement plan is actually built on the concept that OAS won't exist in any form when I retire. I have no choice but to either fund it all myself, or die. So far I have enough saved up to live until I'm 65.2 years old!

I am not betting on OAS but I am including it. I plan to retire long before 65 though, so it's a bit of bonus on the end.

I plan to die without any assets other than real estate, but it is tricky to pick that "age". I suppose it's all relative, as I can always HELOC my way if I live past 90 or whatever I end up picking.

[Corndogger]

Originally Posted by WarrenC12

Like when Harper did it?

The rollback of his policies was one of the things I disagreed with Trudeau doing. The hard part was done with little to no fanfare, and it made no sense to reverse IMO.

Wasn't Harper's plan to phase it in over something like 10 years? They need to have more flexible plans because not everyone can work until 67 and definitely not everyone can save up enough $$$$$ to retire without help. I was reading up last night on all of these various programs on different planning websites and there were literally hundreds of comments from people freaking out over how they were going to live on OAS plus a small amount of CPP. Unless you have a pretty good job it's next to impossible to save up much money. You also have to factor in that both CPP and OAS are taxable.

[Corndogger]

Originally Posted by vid

I make less than half that and get 🞵🞵🞵🞵 all from GST.



As a millennial, my entire retirement plan is actually built on the concept that OAS won't exist in any form when I retire. I have no choice but to either fund it all myself, or die. So far I have enough saved up to live until I'm 65.2 years old!

Last year they started to increase the amount you need to contribute to CPP. There will be two additional components to what you can earn dependent on how much money you make. The goal is that by 2065 CPP will replace 1/3 of your income instead of the current 25%.

[someone123]

Originally Posted by vid

As a millennial, my entire retirement plan is actually built on the concept that OAS won't exist in any form when I retire. I have no choice but to either fund it all myself, or die. So far I have enough saved up to live until I'm 65.2 years old!

If you look at OAS projections there's a maximum stress period when the Baby Boomers are mostly alive and elderly but then the % of GDP starts falling again from 2030-2050. And immigration has had a big impact on the relative size of cohorts in Canada. Canada's demographics are not evolving like Japan's or Russia's. I suspect many provinces are "younger" today than the 2020 projection of 2010 or 2015.

It's possible that when the Baby Boomers die out, senior issues will suddenly stop being so important and senior benefits will fall apart. Just like what happened with post-secondary.

[Corndogger]

Originally Posted by someone123

One thing to note is that life expectancy is not necessarily still increasing across Canada. Life expectancy for men in BC for example was 80.5 in 2015 and fell to 79.9 by 2018. I have a feeling it's about to get worse. 170 British Columbians died of an overdose in May alone.

If we push back the OAS age while life expectancy falls we're accepting lower living standards for poor seniors.

I bet lower OAS clawbacks could save tons of money. Seniors are the richest age demographic in Canada and they make up a growing percentage of the total population.

But I think UBI might work well too, which runs contrary to OAS clawbacks. My main complaint isn't so much that OAS is extravagant, it's that it's misdirected. We balk at benefits for working poor with a very low quality of life in Canada (e.g. can't get dental work done because it's not covered) but for some reason it's acceptable politically to pay out OAS to seniors with millions saved and a six-figure income.

Note that there is also the Guaranteed Income Supplement on top of OAS, but that has a very low income threshold ($18,600 for an individual; but I don't think it counts wealth). It tops up OAS paid out to people who only lived in Canada for 10-40 years as an adult. So if you were to hypothetically immigrate to Canada as a 55 year old, you could live here on savings for 10 years then collect around $18k a year. Maybe Meng Wangzhou will qualify if we hold her long enough and her accountants manage things right.

The new GIS rules that allow people to make some extra money are confusing. If people on GIS are allowed to make an extra $10K/year then why not just boost the cutoff to $28,600? Or am I missing something? The way it sounds now is that if you make even $1 over $18.6K you no qualify which would mean a $900+/month drop in income when you're not likely making much. For some their only other source of income but be the $613 in OAS. This is why I think they should lower the cutoff point to start clawing back OAS and at the same time increase benefits for those who really need it. The end result would be billions in savings along with much lower poverty and healthier seniors.