An Act to amend the Old Age Security Act (funeral arrangements)

This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.

Sponsor

François Pilon  NDP

Introduced as a private member’s bill. (These don’t often become law.)

Status

Defeated, as of June 12, 2013
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Old Age Security Act to exclude from the calculation of income, for the purposes of the monthly guaranteed income supplement, the lesser of the amount of benefits received from a registered retirement savings plan or a registered retirement income fund and the amount — not exceeding $2,500 — paid to or under an eligible funeral arrangement.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

June 12, 2013 Failed That the Bill be now read a second time and referred to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Old Age Security ActPrivate Members' Business

June 7th, 2013 / 1:30 p.m.
See context

Conservative

Bob Zimmer Conservative Prince George—Peace River, BC

Mr. Speaker, if adopted, this bill will allow guaranteed income supplement recipients to withdraw up to $2,500 from a registered retirement savings plan to pay for funeral arrangements in advance without having their GIS reduced.

Let me start by saying that, while it is clear that the proposed legislation has some serious shortcomings, I can understand the good intentions of the member for moving the legislation. All members on both sides of the House want to ensure Canadian seniors obtain financial security. However, there are several reasons why we cannot support the bill.

First, it would leave the majority of seniors who do not have RRIFs or RRSPs out in the cold. Second, it would generate additional costs to Canadian taxpayers. Third, and more important, there are better ways for low-income seniors to pre-arrange their funeral expenses. While the hon. member is commended for wanting to help these seniors, we cannot agree with the methods he proposes. Therefore, we cannot vote in favour of this bill.

The OAS program is one of the cornerstones of Canada's retirement income system. It provides seniors with a minimum income so they can maintain a decent standard of living and it helps reduce the incidence of poverty among the retired. The program provides over $38 billion annually in benefits to five million seniors. This includes, $8.6 billion in GIS benefits to 1.7 million low-income pensioners.

Based on 2009 data from the Office of the Chief Actuary, it is estimated that only 10% of all GIS recipients have RRSP or RRIF income in any given year. This means that a very limited number of seniors could benefit from this bill and it would not be fair to other low-income seniors, 90% of whom do not have RRIFs or RRSPs. These seniors would get no assistance whatsoever under this bill.

Strictly from a cost perspective, the Office of the Chief Actuary estimates that the bill would increase the program costs by up to $81 million in the first year. In other words, it would cost up to $81 million for a measure that would benefit only one out of every ten low-income seniors who decided to pre-pay their funeral in this fashion.

There are other ways of paying for funerals and they do not cost as much. For example, the Canada pension plan and the Quebec pension plan already provide a one-time death benefit of up to $2,500 to, or on behalf of, the estate of the deceased contributor. In 2011-12, 54% of all GIS beneficiaries who passed away had a CPP death benefit paid to their estate and the average benefit received was $2,150.

Also, some provinces and territories already offer grants and subsidies to low-income seniors to help them make funeral arrangements. For example, the province of British Columbia offers assistance of up to $3,000 to those who have little or no assets. Similar benefits are also available in Alberta, Nova Scotia and Prince Edward Island and for first nations peoples living on reserve. As well, some municipalities, including Toronto, offer similar assistance to cover funeral expenses. This bill would duplicate public assistance with respect to the same funeral expenses.

Here is the bottom line. If people are concerned about funeral expenses, they are much better off leaving their money in their RRIF or RRSP. This way, the money can accumulate on a tax-deferred basis and they can arrange to have their estate pay the funeral expenses out of any remaining RRSP or RRIF savings upon their death. As an alternative, since withdrawals from tax-free savings accounts are not included as income for the purpose of determining GIS entitlements, GIS recipients may pre-pay their funeral and other expenses out of TFSA savings, with no impact whatsoever on their GIS benefits.

Let me explain. The Old Age Security Act uses income as defined under the Income Tax Act to calculate GIS benefit entitlements. This includes any money that a pensioner receives, other than basic OAS pension, from the Canada pension plan, Quebec pension plan, employer-sponsored pensions, employment insurance benefits, RRSP withdrawals, interest, dividends, capital gains, employment income, annuity payments and RRIF withdrawals. Therefore, withdrawals from RRSPs and RRIFs are considered as income for the purposes of GIS. As long as savings held in RRSPs and RRIFs are not withdrawn, the beneficiary pays no taxes. However, as soon as the monies are withdrawn, the funds are considered as income for the purposes of calculating the GIS.

There are exemptions under the Old Age Security Act, but they generally relate to earnings and receipt of provincial, territorial and social assistance.

The GIS earnings exemption, which allows an exemption of up to $3,500 of annual employment income, allows low-income seniors who choose to work to keep more of their GIS benefits. However, the Old Age Security Act does not provide expense-related exemptions. Bill C-480 would therefore introduce a new type of exemption in the Old Age Security Act by allowing for an expense-related exemption.

The proposal to exempt RRSP and RRIF withdrawals when used for funeral arrangements would open the door to calls for similar exemptions for GIS purposes on other compassionate grounds, such as accidents, illness and medical expenses and other reasons. As we mentioned earlier, the bill would raise equity issues, as it would only benefit those seniors who use RRSPs or RRIFs to cover their funeral expenses and do nothing for those seniors who have no savings or use different types of savings vehicles.

Not only that, but the bill could possible create pressure to exempt a portion of RRSP or RRIF withdrawals as income for the purpose of determining other income-tested benefits and credits such as the Canada child tax benefit and the goods and services tax credit. In addition, those without RRSP or RRIF income could argue that a basic exemption for all sources of income for all income-tested benefits and credits should be introduced. Such exemptions would increase program and tax expenditure costs associated with income-tested benefits and credits.

Since we formed government, we have taken 380,000 seniors off the tax rolls entirely. We have increased the GIS benefits by the largest single top-up in 25 years. The increase in benefits will help more than 700,000 low-income seniors.

I can appreciate the good intentions of the member in moving this legislation. I am sure we all can. However, the cost and inequity of the legislation is not something I can support. Our government has acted to help the poorest of our seniors. Poverty among seniors is at an all-time low, thanks to the investments our government has made. For these reasons, I would encourage all members of the House to vote against this legislation.

Old Age Security ActPrivate Members' Business

June 7th, 2013 / 1:35 p.m.
See context

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I am pleased to be here to debate Bill C-480 and voice my concerns or support, depending at which point I will be discussing the bill. However, in the end, I will be supporting Bill C-480 so that it can be examined in detail and costed at committee.

When I say “costed”, I mean looking at both the economic value and benefit, and performing an analysis that is sometimes not done in this place based on the estimates we sometimes get from the Department of Finance, being just one number with no backup or calculations. Therefore, we will probably look to the Parliamentary Budget Officer for backup to this bill once again and have to rely on those calculations and analysis. I have not seen that yet, but I hope it is available. Perhaps the sponsor of the bill would be able to comment on that in his final comments.

As the Conservative government continues to implement its plans to slash seniors' income support benefits such as old age security, I am especially keen to discuss measures like this. We need to find ways to help low-income seniors rather than hurt them.

The only caveat I would offer is that we must make sure we are getting the greatest benefit for any public investment we may make. If Bill C-480 is passed at second reading and sent to the House of Commons committee on human resources, the committee to which I believe it would be sent, the economic cost of not passing the bill should also be looked at and thoroughly reviewed, because there is a cost in not adopting bills like this.

I understand that many of my colleagues on the other side of the House like the idea of finding ways to reduce what we provide to baby boomers and seniors, which is their position and approach, but it is one that I do not share. Liberals know that seniors deserve better.

I would argue that the true value of a society can be gauged by the manner in which it treats the most vulnerable of its people. This adage is perhaps most appropriate in the context of how we collectively show compassion and care for our elderly parents, grandparents, friends and neighbours who require simple accommodations to live in a dignified and financially independent manner. Having our elderly population live in poverty is simply not acceptable in a country as wealthy as Canada. No one should have to decide between food and rent and other basic necessities.

The Liberal Party is known for its leadership role in defending the rights of seniors, particularly those at the lower end of the income scale.

Bill C-480 constitutes another useful tool for seniors who struggle to make ends meet because of the Conservative government's mean-spirited cuts to income support measures.

The proof is that the Liberal administrations of the past have clearly understood and acted upon this belief. Whether we were referencing the Old Age Pensions Act, delivered by the former Liberal Mackenzie King government; the Old Age Security Act, delivered by the former Liberal Louis St. Laurent government; or the Canada pension plan and guaranteed income supplement, both delivered by the previous Liberal Lester B. Pearson government, the Liberal Party of Canada has a collective legacy of valuing the long-term pension security of Canadians, a belief that is upheld in both word and deed.

It is within this context that both the Liberal critic for seniors and pensions, the member for York West, and the Liberal finance critic, the member for Kings—Hants, support the underpinnings of Bill C-480. We will vote accordingly at second reading. As always, the Liberals seek to balance compassion and social justice with a strong sense of fiscal responsibility.

As we have already heard, Bill C-480 amends section 10 of the Old Age Security Act to permit pensioners to withdraw an amount not exceeding $2,500 from an RRSP or RIF for the purposes of paying for advanced funeral planning. That amount would not be considered income for the purpose of the guaranteed income supplement. This sounds like a case of allowing seniors to use their own savings for an important life expense without penalizing them.

I support this, but there are outstanding legislative as well as economic and monetary questions that need to be addressed. Therefore, once again there is the need to send this bill to committee for further study, and hopefully improvement. The considerations would be looked at during the committee process.

Some of the considerations the committee could look at were highlighted on March 25, when the Speaker expressed concern as to the spending provisions contained in Bill C-480. Specifically, the Speaker encouraged members who would like to make arguments regarding the need for a royal recommendation to accompany the bill to do so at the earliest opportunity.

Likewise, on April 18, the Parliamentary Budget Officer released a letter which stated, “it is possible that Bill C-480 may have a material impact on Canada's fiscal framework if passed in its current form”. This is again why we state that we are looking for some amendments. I am not suggesting this is definitely the case; I am saying that there are outstanding questions.

This is why at this point of the legislative process for Bill C-480, our support is only for second reading. We will see what the reactions are from stakeholders, see if the government is open to amendments, and see if committee members can improve this bill.

The sponsor of this bill has touched on an important issue that the Liberals have long supported. At the 2012 Liberal Biennial Convention, the Liberal membership expressly supported the idea of using the Income Tax Act and other legislative measures to help bolster the income security of low-income seniors. Assuming Bill C-480 is respectful of the basic concepts of fiscal responsibility, members should be anxious to explore it once again at committee and going forward.

The Liberal Party of Canada has a long and proud history of enacting, preserving and strengthening Canadian social structure such as pensions and retirement income options. The Liberal Party, its general membership, the Parliamentary caucus, and its various leaders, both past and present, have underscored an unreserved belief that protecting and helping seniors to live with independence and dignity are necessities that deserve attention and protection in the years ahead. Bill C-480 is potentially part of the process, though not the total solution, and we are pleased to lend our support.

I wish the Conservative government would act in a similar manner and look at supporting the bill by sending it to committee.

Old Age Security ActPrivate Members' Business

April 26th, 2013 / 1:30 p.m.
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NDP

François Pilon NDP Laval—Les Îles, QC

moved that Bill C-480, An Act to amend the Old Age Security Act (funeral arrangements), be read the second time and referred to a committee.

Mr. Speaker, I am pleased to rise in the House today to introduce my bill, Bill C-480, An Act to amend the Old Age Security Act (funeral arrangements). I wish to thank my hon. colleague from Louis-Hébert for seconding it.

Before I explain the details of this bill, I would first like to give a brief summary and explain where the idea for the bill came from.

In 2011, a woman named Fotini Theodossiades came into my office and told me that her guaranteed income supplement payments had decreased, but no one ever told her why.

After some of my staff did a little digging, we learned that her payments had been cut back because she had withdrawn some money from her RRSPs to pay for funeral arrangements in advance, so that everything would be taken care of when she passed away. What happened to her was totally unacceptable, although it was completely legal.

Canadians who receive the guaranteed income supplement qualify for this program because they are unable to make ends meet with just their pension. Cutting the GIS payments of one of my constituents just because she had the misfortune of having to take money out of her RRSPs to pay for funeral arrangements in advance is really unacceptable.

During the 2011 election campaign, our late leader, Jack Layton, made tackling poverty among Canadian seniors one of the main focuses of his platform.

This bill will therefore ensure that recipients of the guaranteed income supplement who have RRSPs will be able to withdraw an amount of up to $2,500 in order to pay for funeral arrangements in advance. This amount would continue to be taxable. However, it would not be included in the calculation of the GIS for the following year. This will ensure that the GIS of these recipients will not decrease the year after they pay for their advance funeral arrangements, as is the case now.

That is what gave me the idea for the bill before us today. This also shows how serious the NDP is about solving the problems that our constituents deal with every day. We are doing our best to resolve them.

Some may say that $2,500 is not a lot of money, and that is true. However, I used the minimum amount so that my bill would not be rejected on the pretext that it was too expensive. I say “minimum amount” because, right now, according to Statistics Canada, the average cost of cremation is about $1,800. If we do the math, $2,500 minus taxes leaves enough for the minimum.

I would now like to talk about some of the details of my bill. As I mentioned earlier, this bill would allow seniors who receive the guaranteed income supplement to withdraw a taxable amount of up to $2,500 from their RRSPs in order to pay for funeral arrangements in advance. However, this amount of $2,500 would not be included in the calculation of the GIS for the following year, and so recipients would not receive lower GIS payments.

In practical terms, Bill C-480 does a lot for seniors and their families. First, this bill gives seniors greater peace of mind and financial security by providing an additional incentive to help them pay for their funeral arrangements in advance.

In addition to helping families absorb the cost, with the help of the $2,500 GIS exemption, it also gives them peace of mind and removes the burden of making funeral arrangements while grieving a loved one.

Bill C-480 would also allow seniors receiving the GIS, who are the most financially vulnerable in our society, to be in a decent financial situation and to make ends meet each month. It is unbelievable that seniors such as Ms. Theodossiades could find themselves in a precarious financial situation simply because they want to save their children from the financial burden of funeral arrangements.

The NDP is committed to fighting poverty among seniors. It was a cause championed by Jack Layton.

Bill C-480 aims to do just that, and it will help make our seniors more financially stable.

Richard Allaire, a community organizer in Laval who supports my bill, shared this thought with me. It is very relevant and, sadly, very true. He said that we always think about seniors in terms of their past and that this bill is the first one that has focused on building them a better future. That is exactly what I am trying to do with this bill, and that is what my NDP colleagues want as well.

For the past few days, I have been hearing government members ask how much this would cost the government, which indicates that they have some interest in Bill C-480, but they are concerned about how much it might cost. I personally feel that no price is too high when it comes to our seniors. However, I have some good news for my colleagues.

The Library of Parliament has determined that the cost to the government of this measure that will help scores of Canadians will be a mere $132,400 a year. In order to reduce the poverty of our seniors, the government would have to spend less than an MP's salary.

On this side of the House, we believe that tackling seniors' poverty with an amount that is less than an average MP's salary is a no-brainer.

During the election campaign, the NDP had a great slogan: “Working together”. This bill provides a perfect opportunity for all of us, no matter what our political affiliation, to prove to the Canadians who elected us that we can work together and address the pressing social problem of reducing seniors' poverty.

To those who might point out that the Canada pension plan and the Quebec pension plan already have a benefit that covers funeral costs, I would say this. In the case of the CPP, the benefit is only available to those who worked full-time for much of their lives. They have to meet certain criteria to be eligible. Seniors receiving the guaranteed income supplement do so because they cannot make ends meet with their pension. The people who would benefit from Bill C-480 have little or no access to CPP benefits.

Furthermore, the amount paid by the CPP can only be used to pay for funerals and not to prearrange funerals. In that regard, Janet Gray, a certified financial planner and elder planning counsellor, said that everyone wants to help financially vulnerable seniors and that Bill C-480 is a good way to do it.

She adds that today's seniors, especially older ones, are less likely to have worked full time for most of their career. According to her, they may not qualify for CPP. She also says that the measure in Bill C-480 does not compete with existing measures. On the contrary, it is meant to complement CPP and the Quebec pension plan.

The bill we have before us today seeks to send a strong message to our seniors and the Canadian public at large. Bill C-480 gives us an opportunity to deal in part with the serious problem of seniors' poverty.

We have an opportunity to show the most financially vulnerable people in our country that Parliament is ready to help them. We have an opportunity to show all Canadians that we are prepared to work together to solve the problems facing them. We have an opportunity, in some small way, to put an end to people's cynical attitude toward politics and politicians, by showing that we can sometimes set aside partisanship and live up to the expectations of Canada and Canadians.

Today we have an opportunity to take a step, a first step to make this country fairer for all.

Old Age Security ActPrivate Members' Business

April 26th, 2013 / 1:45 p.m.
See context

Simcoe—Grey Ontario

Conservative

Kellie Leitch ConservativeParliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour

Mr. Speaker, I appreciate being invited to participate in this debate regarding Bill C-480.

If adopted, the bill would allow guaranteed income supplement recipients to withdraw up to $2,500 from a registered retirement savings plan or RRIF in order to pay for funeral arrangements in advance without having their GIS reduced.

Let me start by saying that I can understand the good intentions behind the member's idea for moving this legislation. However, I find the proposed legislation has some serious shortcomings.

All members on both sides of the House want to ensure that Canadian seniors obtain financial security. In fact, our government has done a great deal to help our seniors prosper in their retirement years.

As the members of the House are likely aware, the most important financial support we provide to seniors is through our public pensions. Canada’s public pensions are highly regarded internationally, and for good reason. They are credited with playing a very significant role in reducing low-income rates among seniors.

Let us just look at a telling indicator. The incidence of poverty among seniors in Canada has dropped from a rate of 21.4% in 1980 to 5.3% in 2010.

Now let us look more closely at the sources of retirement income, which generally have three components.

The first is old age security. This includes the allowance for the survivor and the guaranteed income supplement, the GIS, which provides additional money on top of the old age security pension to low-income seniors living in Canada.

The Canadian pension plan, or CPP, is a second component for those who have worked and made contributions.

The third pillar consists of personal savings, including employer pension plans, registered retirement savings plans and tax-free saving accounts, as well as other savings and investments.

Together, OAS and CPP are designated to provide a modest base upon which to build additional retirement income. This year, Canadians will receive over $76 billion in benefits through the Canada pension plan, old age security and the GIS.

As I said earlier, the guaranteed income supplement provides extra support to seniors with little or no income and has been a great success in reducing poverty among seniors.

In 2008, we increased the GIS earnings exceptions from $500 to $3,500. This enables low-income working seniors to keep more money in their hands. In 2011, we provided the largest GIS increase in 25 years to the most vulnerable seniors. This measure is helping to lift Canada's lowest-income seniors out of poverty.

More than 680,000 low-income seniors are benefiting from this increase. These seniors are now receiving additional GIS, up to $614 for single seniors and $859 for couples. This year we are providing more tax relief for seniors and pensioners, saving them $2.5 billion.

This measure and all of the others that I have outlined demonstrate that the Government of Canada is taking concrete steps to support seniors.

We are actively helping Canadians prepare for and achieve financial security in their later years. That is why seniors' poverty is at an all-time low in Canada.

As I mentioned earlier, there are some issues with the bill. Currently the calculation of income to determine GIS eligibility is determined in accordance with the Income Tax Act. The proposed exemption for income used for funeral arrangements would introduce a new concept of calculations of income for the calculation of the GIS. This likely would create calls for similar exemptions on other compassionate grounds. This would create a precedent for more costly measures that are not affordable under the current fiscal climate.

It would also raise equity issues for seniors, as this exemption would only benefit those seniors who use RRSPs or RRIFs to cover their funeral expenses and would do nothing for seniors who have no savings. It would only benefit the 10% of GIS recipients who have planned for retirement by saving and would not help the poorest of seniors, who are the ones who benefit the most from the GIS.

Let us be clear on this point. The bill would not be helping the most vulnerable of seniors, but rather those who actually have investments in banks.

The Office of the Chief Actuary estimates that the additional program cost associated with this proposed amendment could be as high as $81 million in the first year, if all GIS beneficiaries with RRSPs and RRIFs used this exemption. The bill would also generate additional administrative costs. It is estimated there would be an administrative cost of up to $12 million each year. This is a total cost of almost $100 million in an era of fiscal restraint.

The guaranteed income supplement is paid 100% by taxpayers dollars. I would just ask where the NDP members are in proposing this $100 million tax increase. I think we know the answer to that: from the pockets of hard-working Canadians. I find it astounding that again and again proposals are brought forward by the NDP, but all they do is increase the taxes on hard-working Canadians.

Lastly, the bill would duplicate allowances for funeral expenses in other jurisdictions. The CPP and Quebec pension plan, for example, provide one-time death benefits of up to $2,500, or on behalf of the estate of a deceased contributor. In addition, some provinces, territories and municipalities also offer subsidies for funeral arrangements for low-income individuals. British Columbia, for examples, offers assistance of up to $3,000 for low-income residents who have little or no assets.

Similar benefits are available in Alberta, Nova Scotia, P.E.I., and for first nations living on reserve. As well, some municipalities, like Toronto, offer similar assistance to cover funeral expenses. In light of these programs, this proposed bill would be doubling the efforts made at all those levels.

Given the considerable cost, the fact that it would fail to provide equity benefits for seniors, and that the assistance would not be targeted to the seniors who are in need of it most, our government will not be supporting Bill C-480. While I understand the good intentions of the member opposite, I would encourage all members of this House to join me in voting against the bill.

Old Age Security ActPrivate Members' Business

April 26th, 2013 / 2:10 p.m.
See context

Conservative

Scott Armstrong Conservative Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, I am pleased to speak today to Bill C-480.

The bill would amend the Old Age Security Act to exclude from the calculation of income for the purpose of guaranteed income supplement, GIS, the lesser of the amount of benefits received from a registered retirement savings plan, RRSP, or a registered retirement income fund, RRIF, and the amount not exceeding $2,500 paid to or under an eligible funeral arrangement.

To simplify this, it means that seniors receiving GIS would be able to withdraw up to $2,500 from their RRSP or RRIF to pre-arrange their funeral without having that money be part of the calculation as to whether or not they qualify for GIS.

The hon. member for Laval—Les Îles maintains that this would be a step toward reducing poverty among our seniors. On the surface, this seems like a very compassionate action to take. However, I cannot support the bill.

Let me explain a few things about federal income programs for Canadians over 65. The old age security pension is a monthly payment available to most seniors age 65 and older who meet the legal status and resident requirements. If individuals meet these requirements, they can receive the OAS pension, even if they are still working or have never worked.

The OAS is financed from taxes collected by the Government of Canada, which means that increases and benefits immediately affect the balance of the budget.

The Canadian pension plan, on the other hand, is a contributory program that people pay into when they work. The CPP provides a range of benefits to contributors and their families, including retirement, post-retirement, disability, survivor and death benefits. This is a savings program where Canadians save a portion of their income, which is then used to pay their benefits in their later years.

The OAS program and the CPP combined with Canadians' personal retirement savings, investments and private pension plans provide Canadians with one of the best retirement income systems in the world.

In addition to the OAS pension benefit, the OAS program has three types of benefits that provide additional support to seniors who have low incomes: the guaranteed income supplement, the allowance, and the allowance for the survivor. To use the technical term, these three benefits are income tested. That term is important. The amount of GIS individuals are entitled to receive is based on their income. If their income in retirement is below a certain threshold, they can receive the GIS. If their income rises above that threshold, they cannot.

The Old Age Security Act defines income in the same way the Income Tax Act does. In the Income Tax Act, withdrawals from RRSPs and RRIFs are considered income, and therefore, they are also considered income for the purposes of the GIS.

Let me provide a hypothetical case. Martin is retired and receiving the OAS. Even with the OAS, his monthly income is only $1,000. Because his income is so low, he is eligible for additional support immediately through a monthly GIS benefit. Martin has $30,000 in an RRSP, but as long as it stays in the plan, it is irrelevant to his receiving the GIS.

However, let us say that he makes the decision to withdraw $10,000 from the RRSP. His income for the year has now gone over the GIS threshold, and his benefit would be cut back.

The Old Age Security Act currently does not allow expense-related exemptions, other than the ones already provided under the Income Tax Act. Rather, the existing exemptions under the Old Age Security Act generally relate to earnings and receipt of provincial or territorial social assistance.

The amendment proposed by my hon. colleague would create an exemption for money withdrawn for funeral expenses. Of course, these expenses would have to be documented and forms submitted to the GIS authority for review. This would increase the paperwork that the government would have to do and raise the cost of administering the program by $81 million, as estimated by the Chief Actuary. It is also estimated that the administrative cost of the program could be up to $12 million in addition, almost $100 million in cost.

Additionally, the proposed legislation would also raise issues of fairness, as it would only benefit the seniors who have RRSPs and RRIFs, and it would do nothing for seniors who have no savings or use different savings vehicles.

The legislation would not be helping the poorest of seniors. It would be helping those who still have savings in various registered investments.

I would also point out that the Canada pension plan already provides a one-time death benefit of up to $2,500 to the estate of a deceased contributor. That money can be used for funeral expenses. For people who receive the CPP, the proposed amendment would duplicate public assistance for the same expense.

The hon. member for Laval wants to reduce poverty among seniors, and so do we. Our government is committed to financial security for older Canadians, and we have done a lot to help since we formed the government. Together, the CPP, the OAS and the GIS have contributed to reducing the rate of poverty among Canadian seniors to one of the lowest levels in the world. In fact, poverty among seniors is lower than that of the general population.

In 2011, we provided the largest GIS increase in 25 years to the most vulnerable of seniors. This measure is helping to lift Canada's lowest-income seniors out of poverty. More than 680,000 low-income seniors are benefiting from that increase. These seniors are now receiving an additional GIS, up to $614 a month for individuals and up to $859 for couples.

This year, we are providing more tax relief for seniors on pensions, saving them more than $2.5 billion. This is in addition to creating pension splitting for seniors, allowing couples to significantly reduce their tax burden in many cases. Since we have formed government, we have also taken 380,000 seniors off the tax rolls completely.

I can appreciate the good intentions of the member in moving this legislation. However, we cannot support the cost and the equity of this legislation. We are living in a time of fiscal restraint. Our government has acted to help the poorest of seniors, those who need the most help. Poverty among seniors is now at an all-time low, thanks to the investments this government has made.

For these reasons, I encourage all members of the House to vote against this legislation.

Old Age Security ActPrivate Members' Business

April 26th, 2013 / 2:20 p.m.
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NDP

Manon Perreault NDP Montcalm, QC

Mr. Speaker, I am pleased to speak today to the bill introduced by my colleague from Laval—Les Îles, Bill C-480, which would help reduce poverty among seniors.

My NDP colleague has a huge heart, but he is also a man of action. This bill before us proves it, because he is trying to fix a problem that primarily affects our seniors. I commend him for trying to bring in a measure to reduce poverty among seniors.

This bill would amend the Old Age Security Act with respect to funeral arrangements. Old age security recipients who have an RRSP could withdraw the taxable amount of $2,500 from their RRSP to make funeral arrangements in advance. This amount would be excluded from their income for their guaranteed income supplement calculation the following year. As a result, their guaranteed income supplement benefits would not be cut or decreased the following year.

All members know that many Canadian families are struggling to make ends meet, and having to cope with funeral costs only makes their existing financial burden worse. This is a tangible measure to combat poverty among seniors and improve their financial security.

We know that low-income seniors typically spend 60% of their monthly budget on housing and food. Their already tight budgets are further consumed by health care necessities, such as medication. They often have to go without essential care because they cannot afford it, and then on top of that, they have to cope with the cost of funeral arrangements, which is a considerable expense for these families.

This bill is in line with our social democratic values and our dedication to social justice. We believe that all seniors should have the right to a comfortable retirement. We want to reduce poverty among seniors, and this bill is part of the philosophy that inspires us as New Democrats. We should enable our seniors to grow old with dignity, and we should guarantee them financial and moral peace of mind. That is the goal of this bill. Seniors should not have to put themselves in a difficult financial position to pay for funeral arrangements in advance.

This bill would take care of that because the guaranteed income supplement would not be affected during the following fiscal year. It is unacceptable that families should have to bear such a huge financial and moral burden alone. Why give them another problem to deal with when they are already grieving the loss of a loved one? This measure will help our neediest seniors, those who receive the guaranteed income supplement.

We are working hard to fight poverty among seniors, but the Conservatives are doing just the opposite with their reforms. We know that two-thirds of the population does not have a private retirement fund and has to depend on public money after the age of 65. Need I remind the House that state support for seniors is minimal indeed?

Unfortunately, the Conservative government is not coming up with any concrete solutions to address poverty among seniors. On the contrary, it is proposing delaying access to old age security for two years. Raising the legal retirement age from 65 to 67 will only increase poverty for many people. It will only add to the number of seniors already living below the poverty line in Canada. According to a recent study by the Center for Interuniversity Research and Analysis of Organizations, or CIRANO, this increase will raise the proportion of people aged 65 and 66 living under the low income cutoff from 6% to 17%.

This bill proposes the exact opposite. It would help those who are the least fortunate in our society, and more specifically, it would help reduce poverty among our seniors. By supporting this bill, we can eliminate a huge financial burden for our seniors and their families. Fighting poverty among seniors was one of our campaign promises, and clearly, we are keeping our word.

We want to come up with real solutions to the problems facing Canadians, instead of making irresponsible cuts to old age security. The government should not be going after Canadian workers like this.

We in the NDP are committed to lifting seniors out of poverty and guaranteeing a comfortable retirement for all Canadians. We want to reduce social inequality and help those less fortunate so they can live in better conditions.

My colleague's bill has the support of many stakeholders. According to Janet Gray, certified financial planner and elder planning counsellor, everyone wants to help needy seniors. This bill is a good way to do that.

The Canada pension plan provides $2,500 to cover funeral expenses. However, Ms. Gray believes that today's seniors, especially older seniors, are less likely to have worked full time for most of their career and therefore may not be eligible for CPP. She also noted that the CPP benefit cannot be used to pay for funeral arrangements in advance. It can only be used to pay for funeral arrangements made after the death of the beneficiary.

It is true that the Canada pension plan and the Quebec pension plan have similar benefits. However, the purpose of this bill is to establish a complementary measure not a competing one. It will help those most in need, our seniors who receive the guaranteed income supplement.

This bill shows that we are listening to our constituents and that, as MPs, resolving their problems should be our priority.

However, that is not all. This bill will also boost sales for co-operatives and stimulate the local economy. It will serve as an added incentive for people who are thinking about making funeral arrangements in advance. In the end, the sales of funeral co-operatives will increase, which will in turn stimulate the local economy.

That is the essence of this bill. It seeks to implement a practical measure to reduce poverty among seniors while allowing them to continue to have a respectable financial situation after paying for funeral arrangements in advance. Their guaranteed income supplement will not be affected in the following fiscal year. They will therefore have peace of mind and financial security, knowing that they will not be leaving their family with the burden of paying for their funeral.

It is high time we provided financial help to the most vulnerable members of our society. This bill does just that.

Given that the income gap between the rich and the poor has only grown over the years, it is time to take action. The income gap is the biggest it has been in 30 years. Given that financial status is one of the primary determinants of health, poverty should not be taken lightly.

Socio-economic inequalities are getting worse every day. This has a significant impact on people's health and on a growing number of older people, many of whom have barely enough money to house and feed themselves adequately, let alone pay for other essential resources.

Poverty is costly, and we have to do something about it. That goes double for vulnerable people. Seniors, who are at greater risk of living in poverty, are among those most vulnerable.

According to a study by the Institut de recherche et d'informations socio-économique, the number of low-income seniors climbed dramatically from 4.6% in 1996 to 12.3% in 2008.

We must take steps to improve our seniors' financial health. That is why I am asking all members to support this bill at second reading.

I would like to add that this is not about money. Those who support this bill will demonstrate good will, empathy and humanity. I urge them to listen to their hearts and realize that, because they cannot be against what is right, they cannot be against this bill.

Old Age Security ActRoutine Proceedings

February 27th, 2013 / 3:25 p.m.
See context

NDP

François Pilon NDP Laval—Les Îles, QC

moved for leave to introduce Bill C-480, An Act to amend the Old Age Security Act (funeral arrangements).

Mr. Speaker, I am pleased to introduce my bill today in the House.

I want to begin by thanking my colleague from Pierrefonds—Dollard for seconding my bill.

This bill amends the Old Age Security Act to allow old age security and guaranteed income supplement recipients to withdraw a maximum of $2,500 from an RRSP in order to pay for funeral arrangements in advance.

This sum will still be taxable, but it will be excluded from the calculation of income for the guaranteed income supplement for the following year.

This will enable our seniors who receive the guaranteed income supplement to remove a financial burden from their children while preventing their already modest income from being further diminished. In this way, they can maintain a certain quality of life.

(Motions deemed adopted, bill read the first time and printed)