Canada 's Public Pension System

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Canada 's public pension system consists of a combination of federally and provincially sponsored programs: 1. The Old Age Security program which provides Canadians with a pension at age 65 if they satisfy certain residence requirements. 2. The Canada/Quebec Pension Plan which provides Canadian workers and their families with partial replacement of earnings in the case of retirement, disability or death. 3. The Provincial Income Supplement Programs which provide their low-income residents with an income supplement to the Old Age Security benefits. 4. The Veterans Affairs Canada Program which provides qualified veterans with retirement, disability, and death benefits. These programs were created to help eligible Canadians answer concerns…show more content…
Between 1965 and 1969, the age of eligibility went down gradually from 70 to 65. In the 1970s, the government started to index the pension payments to the consumer price index, and to provide supplemental benefits such as the Guaranteed Income Supplement, the Allowance, and the Allowance for the Survivor to low-income pensioners. In the late 1980s, after a prolonged period of inflation and economic stagnation, the government began to see the pension system as costly and started to levy a special tax called “recovery tax” on OAS pensions to reduce and ultimately eliminate the OAS pension for people whose annual income exceeded a certain level. Today, the benefits of the program include: 1) The OAS pension 2) The Guaranteed Income Supplement 3) The Allowance 4) The Allowance for Survivor. The program is funded entirely by the general revenues of the Government of Canada, and provides a basic level of support to those with no other sources of retirement income. In 2014, the total expenditure of the program was 2.3% of GDP, with 35 billion paid in OAS pension and 10 billion in Guaranteed Income Supplement to 5.5 million seniors. Service Canada is the administrator for the OSA program. See Exhibit I more information. 1.2 Canada/Quebec Pension Plan The Canada Pension Plan (CPP) is a mandatory contributory earnings-related public pension program for Canadians since 1966.
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