June 02, 2010

CAMBRIDGE, ON — The Honourable Gary Goodyear, Member of Parliament for Cambridge & North Dumfries welcomes proposed new government legislation to amend the Old Age Security Act and terminate payment of Old Age Security (OAS) benefits to prisoners.  

“Our government is following through on our commitment to treat taxpayers fairly. We are ensuring that public funds are put to good use,” said Minister Goodyear. “Canada’s taxpayers should not be funding OAS benefits for prisoners as well as the costs of incarceration, which already cover their basic living needs.”

The bill was tabled June 1, 2010, in the House of Commons by the Honourable Diane Finley, Minister of Human Resources and Skills Development.

In Canada’s Jobs and Growth Budget, the Government stressed that it is committed to treating taxpayers fairly. The OAS program is funded through general tax revenues and is designed to help seniors meet their immediate, basic needs and maintain a minimum standard of living in retirement. Since a prisoner’s basic needs, such as food and shelter, are already met and paid by public funds, there is no reason for Canadian taxpayers to also fund income support for prisoners through OAS benefits.                     

Implementation will begin with prisoners who are incarcerated in federal penitentiaries for two years or more. The Government of Canada will work with willing provinces and territories to continue implementation in provincial and territorial institutions for inmates serving sentences of greater than 90 days. 



Background

Old Age Security

The Old Age Security (OAS) program is the cornerstone of Canada’s retirement income system.

In order to be eligible to receive OAS benefits, applicants must meet specific residence requirements. To receive OAS benefits, an individual must have resided in Canada for a minimum of 10 years, after age 18. A person applying for OAS benefits who has fewer than 10 years’ residence in Canada may nevertheless qualify for a partial benefit if he or she has accumulated pension credits from one of the countries with which Canada has an International Social Security Agreement. With 40 years of residence in Canada, a full pension can be received.

The OAS program offers three types of benefits:

1. The OAS basic pension – This pension is paid to individuals aged 65 or older who meet the residency requirements. In 2008−2009, 4.5 million seniors received $25 billion in OAS pension benefits.
2. The Guaranteed Income Supplement (GIS) – The GIS is paid to individuals receiving the OAS basic pension with little or no other income. In 2008−2009, 1.6 million seniors received $7.5 billion in GIS benefits.
3. The Allowances – The Allowance is paid to individuals aged 60 to 64 whose spouse or common-law partner receives the GIS. The Allowance for the Survivor is paid to individuals between the ages of 60 and 64, who have little or no income, and whose spouse or common-law partner has died, and who have not remarried or entered into a common-law relationship. In 2008−2009, 93,000 near-seniors received $532 million in Allowances.

OAS benefits are adjusted quarterly in January, April, July and October to reflect changes in the cost of living, as measured by the Consumer Price Index (CPI). The Old Age Security Act contains a guarantee that ensures that OAS benefits are not reduced, even when there is a decrease in the CPI. As such, if the CPI goes down, OAS benefits will remain the same.

Individuals must apply for OAS benefits. They do not start automatically.