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Ottawa signals increase to benefits for low-income seniors

Minister of Finance Bill Morneau responds to a question during question period, Feb. 17, 2016.

Sean Kilpatrick/THE CANADIAN PRESS

The coming federal budget will include measures aimed at helping low-income seniors, Finance Minister Bill Morneau said Wednesday.

The Liberal platform promised a 10-per-cent increase to the Guaranteed Income Supplement payment for single, low-income seniors and Mr. Morneau is suggesting a move in this direction is coming soon.

The pledge, when combined with a related promise to change the way seniors' benefits are increased with inflation, is estimated to cost more than $1-billion a year once fully implemented by 2020.

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In response to a question from an NDP MP in the House of Commons about the GIS promise, the minister said the government is "looking towards measures in Budget 2016 that will help those Canadians who are currently retired and facing a difficult situation."

The GIS is an additional payment under the Old Age Security Pension program that is available to low-income seniors.

The Liberal platform said its GIS reforms would provide almost $1,000 a year in additional money to about one million seniors.

Fred Phelps, the executive director of the Canadian Association of Social Workers (CASW), said the minister's comments are a positive sign.

"It's a hopeful remark," he said, noting that his organization has long called for an increase in support for low-income seniors. "If he's signalling moving in that direction, that's a huge step in the right direction."

Mr. Phelps was among the dozens of witnesses appearing this week before the House finance committee.

The CASW is calling for an increase in the GIS as a first step toward a guaranteed basic income for seniors that would be enough to lift all seniors out of poverty.

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"My hope is that they're looking beyond a short-term increase to GIS and looking at structurally making it affordable for people to live and die in dignity and respect in their senior years," he said.

Increasing benefits under the OAS program – which is funded entirely from federal revenues – will likely revive the debate over how Ottawa will cover the rising costs of the program as more baby boomers retire.

The previous Conservative government had planned to raise the eligibility age from 65 to 67, arguing that Ottawa faced a costly demographic "crisis." The Parliamentary Budget Office has played down those concerns. The Liberals have promised to keep the eligibility age at 65.

Under the current system, a single individual with no income can receive $1,344.12 a month in combined OAS and GIS payments. The amounts for GIS are clawed back based on income and are cut off entirely at a set amount. For single seniors, the cut-off is $17,304.

Broadbent Institute economist Andrew Jackson told MPs on the finance committee on Wednesday that restricting new GIS benefits to single seniors creates "design issues" for the program.

Liberal MP Francesco Sorbara responded that the GIS changes will be "a great first step" for seniors.

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The finance committee is hearing from dozens of witnesses this week as part of a highly condensed prebudget consultation.

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