If you're interested in improving the circumstances of low-income seniors, the poverty rate for couples is actually quite low. The poverty rate for individuals, males and females, is quite high, so you're really going to be looking at the GIS. There are some things I've mentioned before, that pensions could be helpful, but not really for the lowest income seniors, because they don't have pension income.
The income of somebody who's retired without an employer pension plan is determined by the federal government. It's the old age security plus the CPP, and then GIS is calculated depending on the amount of CPP, and that's it. The federal government has basically determined their income, so if the poverty rate is 25%, that's a federal government decision.
One thing that drives me crazy about the design of the GIS is the clawback. About 30% of seniors on GIS have an RRSP—I looked it up—about $30 billion, on average about $70,000. They don't know that every time they take $1,000 out of their RRSP the federal government says, “Good, we can give you $500 or $750 less and it's still taxable, and it might affect your eligibility for prescription drugs and all sorts of other things.
Recently the rules were changed so the first $3,500 of wages is exempt in determining GIS—that's wages, not self-employment, but wages. That's for bizarre historical reasons. If it were up to me, I would actually say the first $3,500 of income, regardless of source, will be ignored for the GIS. In terms of simplicity, all those people with RRSPs don't have to rush out and switch them to TFSAs.
The C.D. Howe Institute published a paper that I wrote in 2003 containing the fact that all these seniors with low incomes had RRSPs, which in some people's minds led to one of the reasons for the TFSA.
I work with the financial literacy community. The banks are still telling people, regardless of income source, “Maximize your RRSPs. Do this, do that.” They have their cookie-cutter financial advice. All that advice is toxic. It's actually the worst possible advice for somebody who's going to be on GIS when they retire.