Seniors on the margins Aging in poverty in Canada

Preface

By 2021, seniors will form 18% of Canada's population, compared to 12.5% in 2000. This aging of Canada's population supposes a need for responsive policies, programs and services to serve the growing number of Canadian seniors. While general consciousness of this need is rising and some changes are very slowly taking shape, we need to ask if the effort to adapt our society takes into account the seniors of Canada who are not part of the mainstream... those from ethnic minorities, those who have lived with developmental disabilities, those who are economically vulnerable, etc.

According to a UNESCO definition, "marginalization occurs when people are systematically excluded from meaningful participation in economic, social, political, cultural and other forms of human activity in their communities and thus are denied the opportunity to fulfill themselves as human beings." In this land of equal opportunity, how are seniors on the margins faring?

The National Advisory Council on Aging (NACA) publication series, Seniors on the margins, looks at the situation of those Canadian seniors who, because they are not part of the majority, may not have access to the resources needed to age in comfort and health. In each paper of this series, NACA examines the causes and key issues of marginalization and proposes strategies and recommendations. The present paper looks at the economic vulnerability of Canadian seniors.

Introduction

There has been a clear improvement in the economic situation of Canadian seniors¹ since the 1980s, but a substantial number of seniors continue to live under very difficult economic conditions. While many consider Canada's combined public/private retirement income system a 'success story', poverty among seniors is not a rare occurrence. It is most common among seniors living alone, women over the age of 80, visible minorities and immigrants. For a good number of these seniors living in poverty, the prospect of a golden retirement simply does not exist.

In this paper, NACA looks at five issues that impact on the economic vulnerability of seniors and offers recommendations. It proposes changes to the Old Age Security and to the Canada Pension Plan to alleviate seniors' poverty. It deplores the cumulative impact of programs that use income as the base for access (such as the Guaranteed Income Supplement) and that confiscate, through taxes, a large chunk of any additional income earned. It also looks to new retirement savings plans as alternatives to RRSPs for low income earners. Finally, it proposes that the costs of housing and long-term care establishments be capped, and that the income of senior women and immigrants be increased.

Definitions

There are few definitions of economic vulnerability, but its opposite, economic security, has been defined by the Canadian Council on Social Development (CCSD):

NACA supports this larger definition; economic vulnerability is not only about insufficiency of income, but also about loss of dignity and social inclusion.

Canada has no definition of low income or poverty . For the purposes of this document, NACA has adopted the low income cut-off (LICO) as an indicator of economic vulnerability.² The use of the before-tax cut-off versus the after-tax cut-off has been the subject of much controversy over the years. According to experts, both measures indicate the same trends over time. The after-tax LICO reflects the redistribution of income – which affects the significantly higher income earners.³ Considering that after-tax income more accurately reflects disposable income, the terms "low income cut-off," "LICO" and "low income" used in this document refer to the after-tax income/LICO. The only exception to this can be found in the table and adjoining text on the next page, which refer to a study based on the before-tax cut-off.

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