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What Does Generation Squeeze Have Against Couples?

An organization called Generation Squeeze is calling for big cuts to Old Age Security (OAS).  For some reason, these cuts are aimed exclusively at senior couples.  Digging into the numbers, the proposal makes no sense.

The stated goal of the proposed OAS changes is to free up government money for other priorities.  Whether or not OAS is the right target for reducing government spending is a different discussion.  The puzzling part of this proposal is having all the cuts apply to senior couples.

Currently, OAS will get clawed back from any senior whose 2025 net income (Line 23400 of the tax return) is over $93,454.  For each dollar over this income threshold, OAS payments are reduced by 15 cents.  The current rules make no distinction between singles and couples.  The calculation is based on each person’s own income without regard to whether they have a spouse.

Generation Squeeze wants to change the threshold to $100,000 for total household income.  So, single seniors would lose nothing, and senior couples would eat all of the cuts.  The problem here is that it is more expensive for two people to live than just one.  The figure actuaries use is that it costs about 40% more for two people in the same home to live than it costs for one person.  

Based on this 40% figure, if the OAS income clawback threshold for a single senior is $100,000, then it should be about $140,000 for a senior couple.  Some might argue that we should encourage seniors to live together and help each other, and that the senior couple threshold should be double that of a single senior, as it is now.  However, that’s a different discussion.  There are sensible arguments for the couple threshold to be somewhere between 1.4 and two times the single threshold.  But there is no sensible argument for making the two thresholds equal.

No doubt Generation Squeeze is getting support for this proposal from people who would not be affected.  This group includes younger people, single seniors, and senior couples whose incomes are high enough that OAS is already being fully clawed back.  Less affluent senior couples would not be as supportive.

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Comments

  1. johnMay 14, 2026 at 9:24 AM

    The frustration i've heard from freinds and peers is that OAS is means tested to an individual not household whereas child tax credit and other benifits for young family are means tested to household income...haven't looked into whether their argument hold water just passing along what i've been hearing

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    Replies
    1. Michael JamesMay 14, 2026 at 9:38 AM

      The cost of raising a child for a single parent is at least as much as it is for a couple, so it makes sense for the child tax credit to be means tested to household income. However, it costs more for two seniors to live than it does for one, so it doesn't make sense for the OAS clawback threshold to be the same for couples as it is for singles.

      Delete
  2. AnonymousMay 14, 2026 at 12:47 PM

    If this gets passed then a lot of financial plans will have to be reworked. 140k sounds a lot more reasonable and easier to adapt to than 100k.

    ReplyDelete
    Replies
    1. Michael JamesMay 14, 2026 at 2:15 PM

      I don't know if the government is taking this proposal seriously. I certainly hope not. The proposal as is makes no sense. The general idea of lowering clawback levels for OAS might be on their radar, but there are certainly better targets for saving large amounts of money, like the 5% weakest performers among government workers.

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