Who’s entitled to Old Age Security?

In light of a short-lived NDP motion on Old Age Security eligibility, Kevin Milligan reviews the practical principles at play.

So, we had twenty years of contributory Old Age Security taxes — but that ended 40 years ago. Assuming work started at age 18, this means no one under age 58 today has ever paid any explicit Old Age Security taxes — and those over age 58 paid explicit taxes only for a fraction of their working lives. Moreover, the proportion of people who never paid the explicit tax will only grow in the future as younger generations reach age 65 with increasingly less work exposure to the 1952-1971 window. This renders the argument about a tax-benefit linkage much weaker for Old Age Security than for the Canada Pension Plan.

A refinement of the argument posits implicit linkages between a lifetime of paying taxes into general revenues and the pension benefits that flow at older ages. This argument seems sound in general, but I find it hard to distinguish why we should impose residency requirements on Old Age Security but not other public benefits or public spending. Why restrict Old Age Security to long-term residents but not public health insurance? What makes Old Age Security so different?

Kady O’Malley notes the relatively symbolic nature of private members’ motions and the fact that—among other plausibly controversial motions—a motion to change Old Age Security requirements was put forward by a Conservative MP in 2004. Nonetheless, Conservative MPs Dean Del Mastro, Kyle Seeback, Greg Rickford and Cathy McLeod have moved quickly to reassure their constituents that they are entirely opposed to this recklessness.




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Who’s entitled to Old Age Security?

  1. My guess is that most people are unaware they aren’t paying an OAS tax.

    Another govt failure to communicate…just like Metric and the GST.

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