My name is Dominique La Salle—
I am Director General of Seniors and Pensions at HRSD.
We are honoured to be with you this evening. I am here with some colleagues, Nathalie Martel, who is Director of Old Age Security Policy,
Ms. Annette Vermaeten, who is the director of the OAS task force; and Mr. Bruno Rodrigue, who is the chief of income security at the Department of Finance.
I will begin with a quick overview of the provisions under division 24, part IV, of Bill C-38, specifically clauses 445 to 467 of the bill, which amend sections of the Old Age Security Act.
This concerns three initiatives.
The first concerns the increase in the age of eligibility for Old Age Security.
Starting in April 2023 the age of eligibility for the OAS pension is proposed to be gradually increased by two years, from age 65 to age 67. In addition, the eligibility age for the allowances would be increased from age 60 to age 64, and be moved to age 62 to age 66 in parallel.
This age increase is being proposed with many years of advance notice to provide adequate time for Canadians to adjust. The change is preceded by an 11-year notification period, from now until April 2023. The actual change in the age of eligibility will then be phased in over a period of six years, from April 2023 to January 2029. The eligibility age will be increased by one month every three month—thus on a quarterly basis.
The change to the age of eligibility for the OAS program will not affect current seniors. Anyone aged 54 or older as of March 31, 2012, will not be impacted by the age increase. The government has announced that it would adjust programs under federal jurisdiction, since some programs use age 65 as a trigger for benefits. Such programs exist at Aboriginal and Northern Affairs Canada and at Veterans Affairs.
The government will also work with provinces and territories to fill the gap that this change would create for the Canada pension plan disability benefits and survivors' pensions. Finally, the government has committed to compensating provinces and territories for any net additional costs they may face resulting from the increase in the age of eligibility for OAS benefits.
The second initiative is voluntary deferral for Old Age Security pensions.
Starting in July 2013, a voluntary deferral for OAS pensions is proposed for introduction. This will provide eligible Canadians the option of deferring their take-up of their OAS pensions by up to five years past the age of eligibility, and for them to subsequently receive a higher actuarially adjusted pension. The voluntary deferral of the OAS pension will be available between the ages of 65 and 70, until the age of eligibility is increased, at which point it will start moving and gradually reach age 67 to 72 in parallel with the increase. The actuarial adjustment to the OAS benefit will be 0.6% per month, or 7.2% for a full year of deferral. Over five years, the maximum increase to the OAS benefit would be 36%, which would be paid to recipients for the rest of their lives and be fully indexed to the consumer price index, as are all OAS benefits.
Lastly, the third initiative concerns what is called proactive enrolment.
This initiative will allow the Minister of HRSDC to waive the requirement for an application, thus allowing for the introduction of automatic enrolment of seniors where the department has sufficient information to satisfy its integrity requirement. Where the available information is not deemed sufficient to automatically enrol a senior, the available information will be used to pre-fill the application form. We refer to this as a streamlined application process, which will make it easier for seniors to apply for the OAS benefit. This initiative will be implemented over a period of four years, beginning in 2013, and be fully in place in 2016.
Mr. Chair, that concludes my introduction.
If you wish, my colleague Ms. Martel can briefly explain the most important sections, the most important clauses.
or the more salient clauses involved.