By Canadian Press

Old-age benefits have dramatic effect on poverty for immigrants, study says

Dec 5, 2019 | 10:23 AM

OTTAWA — Recent immigrants who are seniors when they arrive in this country are far less likely to live in poverty if they have access to federal old-age benefits, Statistics Canada says in a newly released study.

Seniors who immigrated to Canada in the last two decades and received old-age security payments had low-income rates that were seven percentage points lower than those who didn’t qualify for the monthly financial help.

Old age security and the accompanying guaranteed income supplement, which is given to low-income seniors, make up the federal government’s most expensive benefit program. To be eligible, a person has to have lived in Canada for at least 10 years as an adult.

The study released Tuesday used census data to show that the old-age security program is more effective at reducing poverty among seniors the more time they spend in Canada.

Overall, the national statistics office says a quarter of the approximately 200,000 senior immigrants who arrived in the two decades before the 2016 census are considered low-income by one standard measure.

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“I don’t think it’s necessarily a surprise to see that it does have an impact on the low-income of senior immigrants once they have access to it,” said Sebastien LaRochelle-Cote, editor of the agency’s “Insights on Canadian Society” series that includes Tuesday’s study.

“However, what the study says is that there are other factors that are also very important that play a role in the low income of senior immigrants as well.”

Those other factors include home ownership, living with other people and having family overseas sending money.

Federal spending on old-age benefits is expected to top $56 billion this fiscal year, which ends in March. And it’s expected to increase steadily over the next few years to $70.6 billion by March 2024 — totals that exceed the combined annual payments through the employment insurance program and the Canada Child Benefit.

Some seniors who arrived within 10 years of the last census weren’t in the low-income category, a finding the study suggests could be linked to purchasing homes as a way to transfer wealth, or having spouses, partners or family members working overseas and sending money without reporting the income in Canada for tax purposes.

Another avenue to access the benefits is if the federal government has signed a social-security agreement with the immigrant’s country of origin. Canada has signed about 60 such deals that allows people to become eligible for payments in either country.

The most recent agreements signed in 2017 include China and India — two large sources of senior immigrants in recent years — meaning the effect of those agreements isn’t reflected in the census data collected in 2016. But the study suggests that being covered by one of those agreements, which makes it easier to qualify for benefits, reduces the likelihood of living in poverty.

The federal Liberals promised as part of their election platform to boost payments under the old-age security program for seniors once they reach age 75.

The party’s platform estimates that a boost in spending — which will translate into a budget hit of $1.6 billion next year, rising to $2.6 billion by 2024 — will lift more than 20,000 seniors out of poverty.

This report by The Canadian Press was first published Dec. 3, 2019.

The Canadian Press