Summary of the evaluation of the Old Age Security program, phase 2

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Allowances and pension deferral

The Old Age Security program includes the Old Age Security pension, the Guaranteed Income Supplement and the Allowances.

• The Old Age Security pension provides a basic pension to nearly all seniors
• The Guaranteed Income Supplement is a supplement for low-income seniors
• The Allowances are benefits for low-income 60 to 64 year-old widows, widowers or spouses of Guaranteed Income Supplement recipients

Key findings

The program contributed to reduce the proportion of seniors with low income. Only 4% of seniors had income below Statistics Canada's Low Income Cut-Off in 2015.

The Allowances address an important need for recipients as benefits represent 36% of their income on average. Who is benefitting? Most recipients are women and have:

• very low income
• low levels of education
• limited attachment to the labour market

There are many low-income 60 to 64 year-olds whose marital status or age of spouse makes them ineligible for the Allowances. However, individuals in this age group may be eligible for provincial and territorial assistance.

Awareness of pension deferral is low, as is the proportion of seniors who chose to defer. About a quarter of 60 to 64 year-olds are aware of this option and 4% of the first cohort of eligible seniors chose to defer.

About 80% of the first cohort of eligible seniors worked during the deferral period, and nearly 60% had income above $75,000.

Recommendations

• The department should take into account the evaluation findings to inform its analysis on the Allowances
• The department should continue to promote awareness of Old Age Security pension deferral

The full Evaluation of the Old Age Security Program: Phase 2 is now available.