Equity Challenges in Canada's Old Age Security Pension: Income Eligibility and Cost of Living Considerations

Mohammad Hajizadeh, Thiago Ferro and Michel Grignon

Canadian Public Policy, 2024, vol. 50, issue 2, 232-242

Abstract: The Old Age Security (OAS) program entitles Canadian seniors to an income consisting of two benefits: the universal OAS pension and its low-income complement, the Guaranteed Income Supplement (GIS) pension. After introducing the development and eligibility requirements of the OAS program, we empirically assess two equity challenges of the OAS pension: first, the OAS pension, which determines eligibility on the basis of individual income thresholds, overlooks total household income, and second, the federally administered pension disregards the regionally divergent costs of living. To address the first equity concern, we point out that households receive different treatment based on the income distribution between partners. Additionally, we emphasize the allocation of OAS pension amounts in the top deciles of equivalized household income. For the second equity concern, we compare the OAS pension amount with the provincial levels of essential household spending and gross domestic product per capita.

Keywords: Old Age Security; pension; seniors; equity (search for similar items in EconPapers)
Date: 2024
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