Actually--I'm sure you know this, but I want to put it on the table--it's not just when you're living in poverty, as a person with children or whatever; it's also when you get to retire. If you have RRSPs and you start cashing them out, it then becomes an obstacle to your getting assisted housing, getting assistance with a nursing home, and all those kinds of things.
Richard Shillington makes this case very well--better than I would--that up to a certain point of income, people need to really look at this. Those who encourage people to save need to be honest with people: if you're not going to have over $100,000 or $150,000 in an RRSP, you're probably better off not doing that at all and maybe paying down your mortgage instead, or doing something where it's not going to be counted as income when you finally retire.
Again, it's a disincentive.