Thank you, first of all, for your overall comments around what we're trying to achieve, and in particular, what we're trying to achieve around seniors.
I never really expected that I would be able to get a question on deferred life annuities in my role as finance minister. You might remember I co-wrote a book called The Real Retirement when I was in the private sector, and I used to call it a cure for insomnia. What I would suggest to people who had severe challenges with getting to sleep at night was just to put the book right beside their bed stand and that would help them enormously with that particular challenge.
I think what I can do as well with this issue is that I can take the notes on the deferred life annuity and I can put it by your bed stand so that it will help you out in the long term.
The fact that it's detailed and causes that challenge doesn't take away from the seriousness of the issue for so many Canadians, but it is important, as you said, to put it in context. We're trying to help people who have worked hard during the entire course of their lives to have a dignified retirement, and there are multiple ways we need to work to achieve that.
In this budget there are a few things that we've done, and this is one of them that we think will have an important impact on a lot of Canadians. The change in the clawback rate on the guaranteed income supplement is particularly important. For seniors who are in a situation where they want to continue to work, especially in their early retirement years, we've increased the amount of money they can earn before they get a clawback on their guaranteed income supplement. What this means is that they'll have more money in their pockets and it will enable them in those early years to be successful at work while they're partially retired.
The Canada pension plan automatic enrolment was important because we just thought that was the best way to ensure people got those Canada pension plan benefits. However, we found as we were going through this that there were 40,000 Canadian seniors who were eligible for Canada pension plan payments, and many of them who hadn't actually applied for it had only had small amounts of attachment to the workforce so they didn't necessarily understand that they were qualified. What we did was we made sure that we put funding in to actually find those 40,000 people and improve their ability to get those benefits. It will be huge. There are a lot of elderly single seniors, a lot of women with relatively small amounts of workforce attachment in the generation behind, and on average I think it's about $3,000 per year that people will be getting.
The deferred life annuity is another issue that we thought was important. We wanted to make sure that Canadians don't basically outlive their retirement savings. It's a way of us thinking about how we can ensure that within the confines of our currently existing retirement system. It's allowing us to provide more options for those Canadians who don't have a defined benefit pension plan. You'll know that with a DB plan, of course, people get regular payments monthly and they know what those are going to be for the long term.
Buying a deferred life annuity can give them a similar sort of consistency in terms of their payments over their retirement years. This will provide individuals with increased flexibility in managing how their savings are received in retirement so that they can take this as their new approach. We think it will enhance retirement security. For many people, it will give them a greater sense of confidence that their money is still going to be there during the course of their lives and it's not going to run out because they budgeted inappropriately maybe during the early years of their retirement and were left with not enough money in later years. It's an important vehicle and one that, as you say, didn't have that much profile because it's maybe something people didn't dig into, but I think for a significant number of seniors it will give them more comfort in their retirement.