Get new posts by email:
  

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.

<< Previous Post

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

    ReplyDelete
    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.

      Delete
  3. AnonymousMay 15, 2026 at 8:04 AM


    It is more expensive for singles to meet all living expenses than for couples. That’s why people get roommates - so they can share costs in order to make ends meet!!! I was unable to confirm your statement that it is more expensive for couples since you didn’t provide support for it, but here is a link to an RBC article with Canadian stats;

    https://www.rbcroyalbank.com/en-ca/my-money-matters/life-events/finances-and-relationships/marriage/where-did-my-money-go-the-cost-of-being-single-in-canada/

    I am 66 and every retired couple I know have both worked so each person has their own income and can contribute to (and therefore share in) the household expenses. Also, couples have tax advantages that are not available to singles that can decrease their tax owing significantly and increase their access to OAS and credits. For further facts/stats on this check out Single Seniors for Tax Fairness;

    https://www.singleseniorsfortaxfairness.com/


    

    ReplyDelete

Post a Comment

Popular posts from this blog

Financial Lessons from Poker

Common advice about controlling spending is to track all your purchases and add them up each week or month. I believe that this is effective, but have been fuzzy on why it seems to work so well. Why can’t people just spend less without the constant reminder of how well they are doing? I got some insight on this question from, of all places, poker. For poker players there is a certain thrill to dragging in a pot of chips. The thrill is there whether it is a $1 pot or a $10 pot. The $10 pot gives a bigger thrill, but not 10 times bigger. Similarly, losing a $10 pot feels worse than losing a $1 pot, but not 10 times worse. This leads to some players playing in such a way that they maximize happiness by taking in many small pots, but losing some big ones. As long as they don’t count their dwindling chips, they can actually be happy playing this way. Counting your chips is a lot like adding up your spending at the end of the month to see what happened. You may feel good about ...
Read more

Are Financial Advisors the Solution or the Problem for Older Investors?

As investors age, two things become increasingly apparent: they need more help with their finances and investments, and they’re more vulnerable to financial exploitation.  Depending on who you listen to, financial advisors are either the solution to these problems, or they are part of the problem. On one hand, financial advisors and their firms like to sow self-doubt in the minds of do-it-yourself investors.  “Will you know when you’re no longer competent to manage your investments?  What will happen to your less financially savvy spouse if you pass away first?  You’d better hire a financial advisor while you’re still able to make good decisions.”  This paints a picture of competent and honest financial advisors stepping in to save their clients from themselves as they age. On the other hand, we have Ken Kivenko’s Financial Self-Defense Guide for Seniors .  Ken is a tireless advocate for Canadian Investors, and his guide is largely designed to help seniors ...
Read more

My Investment Return for 2024

Image
The 2024 investment return for my overall portfolio measured in Canadian dollars was 18.0%, which is below my benchmark return of 19.0%.  The difference is primarily due to my choice a few years back to adopt an automated plan that shifts gradually away from stocks when stock prices are high as measured by the cyclically adjusted price-to-earnings ratio (CAPE) of world stocks .  My benchmark doesn’t take CAPE into account. In years when stock prices are high but they give good returns anyway, this automated plan costs me money.  That’s what happened in 2024.  But I’m content with this outcome.  By shifting away from stocks when they’re expensive, my portfolio risk is lower at a time when stocks are riskiest.  I don’t expect my strategy to pay off during normal times.  I’m reducing my losses if we have a scenario where stock prices are high, and then they crash.  This is a kind of insurance, and it has a price during normal times. The method I use ...
Read more

Archive

Show more