Old Age Security Is Not A Handout

Today=s seniors remember what it was like without a public pension plan. They fought long and hard to build our public pension plan which was to be financed from the proceeds of a progressive tax system.

Seniors have no objection to an ongoing assessment and evaluation in order to improve the effectiveness and efficiency of our income security programs. But, the destruction of our public pension system is completely unacceptable.

Even though the majority of seniors are not even moderately well off, as a group, they make a very significant contribution to the Canadian economy. They often provide much needed support for their children and their grandchildren. They are often the source of that first down payment for a home. In times of high unemployment, they are often called upon to share what little income they have with their less fortunate family members. Seniors are among the best contributors to churches and charities. Their work as community volunteers is an invaluable part of what we have come to regard as the ACanadian quality of life@.

With high rates of unemployment and the need for job training, many Canadians between the ages of 45 and 64 are suffering financial hardship. To raise the OAS qualifying age to 67, would only make this already unfortunate situation even worse.

Surely there is a better way of solving our deficit and debt problems than condemning the senior citizens of Canada to impoverishment.

Many of the income security problems which we face today are the results of mistakes and

mismanagement which occurred in the past. If we

can learn from these mistakes, perhaps we will be

able to develop a much improved model.

The Old Age Security(OAS) and Old Age Assistance Acts of 1951; had no means test, and it was financed by a special tax called the Old Age Security Tax with revenues paid into an Old Age Security Revenue Fund. Today's seniors paid these taxes and expect to receive benefits.

OAS tax rate rose from 2% in 1952 to 4% by 1972. In the >tax reform= of 1972, the special OAS tax was rolled into the general rate. The OAS fund was rolled into the Consolidated Revenue Fund in 1975. With these changes, the concepts of an earmarked tax and a separate OAS Fund were lost, even though taxpayers continued to pay the tax. We strenuously oppose the suggestion that the OAS is a handout to seniors.

Registered Retirement Savings Plans (RRSP)-1957; encouraged personal savings. However, the larger tax subsidy amounts tend to favour the wealthy while many lower income earners are unable to buy any, or very few, RRSP=s

Canada Pension Plan (CPP) - 1965; employer and employee contributions.

By 1970, OAS qualifying age was reduced to age sixty-five.

Guaranteed Income Supplement (GIS) was introduced in 1970. It began as a bridge to CPP; has become a means to raise incomes of destitute elderly.

National Pension Conference - 1981; identified many concerns such as, the plight of many elderly,

inflation, long-term demographic trends, future funding, the evolving role of women, the balance between public and private pensions, persons not covered and jurisdictional problems. There was also a need for improved portability, inflation protection, survivor benefits and protection for part-time employees. These concerns and needs should be dealt with in any new income security program.

In 1985, the MacDonald Commission; recommended a Guaranteed Annual Income or "Universal Income Security Program"; to be introduced in stages, with benefits to be gained from

rationalization of the income security system. The first stage was to be in place by the end of 1987.

If left to the market, the majority of low income people would be left without means to participate.

If current job and salary trends continue, our children and grandchildren will be in even greater need of a publicly administered and publicly funded pension plan. We must all work together to make certain that our governments get the loud clear message that we are not prepared to sacrifice our public pension systems.

Submitted by Senior Power of Regina and the Regina Council on Aging