A research institute focused on seniors’ policy is urging caution when discussing changes to old age security.
OAS funding depends on the “ongoing support of the electorate,” says the report from the National Institute on Ageing.
“Calls for change must be considered in the context of the unwritten intergenerational covenant underpinning the program, which has survived for generations.”
OAS is the federal government’s most expensive social program. It is projected to cost about $89 billion this fiscal year.
In recent years, some politicians and academics have called for the program to be reformed, saying it often benefits seniors who are already well-off.
But Talia Bronstein, a report co-author and director of policy at the National Institute of Ageing research centre, says reform proposals are often shortsighted and ignore the “interconnected” nature of Canada’s retirement system.
“It’s very easy to point to OAS in the federal budget and say, ‘Look, it’s the biggest line item’ … and that puts a target on its back,” said Bronstein.
“[But] if you make changes in isolation, you are going to have unintended consequences to this entire system,” she said.
‘Retirement income foundation’
OAS is a monthly federal pension for those 65 and older.
Today, the maximum amount is $762 for those under 75 and $838 for those 75 and over. Amounts are tied to inflation and are adjusted quarterly.
OAS payments are reduced based on income. In 2026, clawbacks started for those whose 2025 income was $93,475 or more. Those whose income was $154,000 or higher did not receive any OAS payments.
Low-income OAS recipients may qualify for the guaranteed income supplement, which reaches about $685 or $1,138 a month, depending on an individual’s income and marital status.
Taken together, OAS and GIS provide a “retirement income foundation for Canadians,” the report from the National Institute on Ageing says.
This foundation is especially important now since employer, defined-benefit pensions are less common than they used to be, the report says.
“With the decline in popularity of workplace defined benefit pension plans in the private sector … OAS and other government benefits have become a bigger part of the income foundation for many Canadians,” the report says.
The report notes that fewer than 10 per cent of private sector employees have workplace pensions today.
Budget recommendations
Some are calling on Ottawa to change the structure of OAS, saying generous senior benefit programs come at younger Canadians’ expense.
In a May submission to the finance committee, Generation Squeeze, a think tank from the University of British Columbia, recommended Ottawa reduce OAS payments for couples with a household income above $100,000.
This change, Generation Squeeze says, would reduce the program’s cost by $7 billion this year and by $9 billion by 2030. This money could instead reduce seniors’ poverty and support programs to help young adults, the think tank says.
In September, the finance committee released its own report, which laid out recommendations for the federal budget, to be released Nov. 5.
It did not recommend any changes to OAS.
However, a dissenting opinion by the Bloc Quebecois outlined several proposals for retirement income. These include increasing OAS payments for those between 65 and 74, and increasing guaranteed income supplement payments and tying additional increases to inflation.
Measuring poverty
Bronstein says calls for OAS reform can ignore the program’s successes and seniors’ financial need.
Seniors’ poverty has decreased, she says, largely because of OAS and the guaranteed income supplement.
“That’s something that we need to celebrate. I don’t want [the programs] to be a victim of [their] own success.”
And by some measurements of poverty, many seniors are not faring well, Bronstein says.
Canada’s official poverty line uses the market basket measure, which looks at whether households can afford goods and services considered necessary for a good standard of living. According to this measure, very few seniors live in poverty, the National Institute on Ageing’s report says.
But a different measure, the low income measure, suggests many seniors are struggling.
That measure is used by countries in the Organization for Economic Co-operation and Development to determine how many households live in poverty. Households with incomes that are less than half a nation’s median income are said to have low incomes.
In 2023, the low income measure was $42,787 for a Canadian couple. The number of Canadian seniors living at or below the low income measure has been increasing since the mid-1990s and was at just under 15 per cent in 2022, the report from the National Institute on Ageing says.
“Older adults are actually faring worse than the working age population,” said Bronstein.
OAS is indexed to inflation, not wages, so it increases at a lower rate than the population’s earnings, she says.
The institute does not have an official statement on how OAS should be reformed, says Bronstein. But the program does not need a “fundamental overhaul,” she said, noting program administration could be improved.
Any changes to the program need to be made carefully, particularly because OAS and the guaranteed income supplement are connected, she says.
“Because these programs are linked, it makes it difficult to make decisions on one program that doesn’t impact the other program,” she said.
And while only seniors receive OAS, the program benefits all generations, she says.
“We pay into systems that we want to be there for us when we need them, even if we don’t need them today, and that’s the social contract.”
