Thanks, Deborah.
Let me give you a quick overview on some of the features of our retirement income system.
It's a retirement income system that is recognized worldwide as one of the best. Over the past 25 years, low income among seniors, including female seniors, has been significantly reduced, primarily as a result of the maturation of the Canada Pension Plan. Poverty among seniors aged 65-plus has fallen from a high of 20.8% in 1980 to 6.8% in 2003. It's quite a remarkable achievement.
Nevertheless, the incidents of low income among unattached women remain high. Consequently, a higher proportion of women receive the guaranteed income supplement, or GIS as it's known, along with old age security, OAS, as their main sources of income, compared to men. In 2003, OAS and GIS, the spouse's allowance, comprised 32% of senior women's annual incomes, compared to approximately 17% for senior men.
Of course, men and women have different life course trajectories, which lead to different retirement income needs. Women are also living longer than men, which causes them to fund retirement over longer periods of time. Because of their longevity, senior women are more likely to live alone later in life, potentially assuming overall responsibility for household financial burdens.
Due to increasing numbers of women who participate in the labour force, it is likely that future cohorts of women will be in a better financial position at retirement. However, women will continue to face unique retirement challenges, including greater life expectancy and continuing expectations to provide care, relative to men.
Turning for a few minutes to the federal programs that support senior women's income security, I'd like to briefly outline some of the features of old age security, the guaranteed income supplement, and the Canada Pension Plan.
Old age security is a residence-based pension program based on age and years of residence in Canada. It effectively recognizes the contribution made by seniors to society, regardless of whether they were doing paid or unpaid work.
Additional benefits that specifically target low-income seniors, the majority of whom are women, include the guaranteed income supplement, which is available to low-income OAS pensioners, and the allowance that is available to low-income spouses, common-law partners, or survivors between the ages of 60 and 65.
I'd also like to outline some of the key elements in the design of the Canada Pension Plan that either generally or specifically target women. The CPP is a contributory-based public pension program that includes the following provisions. It covers workers in all sectors of the economy and it is an important feature for women who tend to work in sectors with low rates of employer-sponsored pension coverage, such as business and personal services. It covers part-time and self-employed workers earning over $3,500 per year, many of whom are women, and it's a portable system, meaning it does not penalize workers who change jobs. It also provides an important provision, a child-rearing dropout provision known as the CRDO. This allows parents to exclude no-earning or low-earning periods associated with the care of a child aged seven and under, effectively increasing the value of a person's benefits. About 94% of persons who claim the CRDO are women.
The CPP also provides a general 15% dropout for periods of low earnings that can be used for periods while one is in school or providing caregiving. It also allows for credit splitting between former partners upon divorce or dissolution of a common-law union, which effectively ensures that CPP credits earned while living together are split equally.
The CPP also allows for pension sharing for spouses or common-law partners who are in receipt of a retirement pension. This allows for income to be shared between the spouses, potentially benefiting the couple for tax purposes.
The CPP also provides a survivors' pension, with women being the vast majority of recipients of this benefit, and a survivors' children's benefit, which is provided to dependent children of a deceased contributor, effectively helping to provide a surviving partner with additional income with which to raise children.
More recently, the Government of Canada increased the guaranteed income supplement for low-income seniors, the first non-inflation adjustment increase made to the GIS since 1984.
The last budget also proposed an increase to the pension income credit, and measures were introduced to provide some funding solvency relief to define the benefit pension plan sponsors under specified circumstances.
At the same time, our department continuously seeks information and best practices from other countries in order to help learn from them about measures that have been undertaken to reduce poverty among senior women. As well, we're continuously examining ways to bring more flexibility into the public pension system to reflect the varied life course trajectories of women.
This concludes our opening remarks.
We would be delighted to take your questions and to work with you on this very important issue.