“It is widely recognized that this reduction in senior poverty rates over the second half of the 20th century is one of Canada’s social policy successes. At that time we were leading the world, in international comparisons, in how well our seniors were doing – we accomplished an amazing thing. But it seems we have become a little complacent and have let it slide. Senior poverty rates started going back up … in B.C., and I’m pretty sure it’s the same across the country.” – Iglika Ivanova
by John Devine
What does senior poverty in Canada look like? Well, according to a recent report, it’s increasingly the image of an elderly woman living alone without adequate retirement income and other supports to sustain a comfortable lifestyle.
The report, Poverty and Inequality Among British Columbia’s Seniors, from the Canadian Centre for Policy Alternatives (CCPA) uses data from Statistics Canada to detail rising poverty rates in that province, numbers that are likely applicable across the country according to its author, Iglika Ivanova.
“People who work (in this field) know that single senior women are at a very high risk of living in poverty. One in three single senior women living alone … are at risk of poverty. That’s something we know,” Ivanova, a senior economist with CCPA-BC, told ARIA during a recent conversation.
This wasn’t always the case. One of Canada’s great social policy success stories was the reduction of senior poverty rates from 30 per cent in the mid-70s to just 2.2 per cent in 1996, a reduction driven, says Ivanova, by the introduction of public income supports, notable Old Age Security (OAS) and the Guaranteed Income Supplement (GIS).
Today, the poverty rate has jumped to 12.7 per cent (2014 numbers), a rate that soars to 33.8 per cent among single senior women, the report relates.
A policy decision was made in the 1960s to address senior poverty, leading to the introduction of the OAS, GIS and the Canada Pension Plan (CPP), all instrumental in improving the lives of seniors, says Ivanova.
“It is widely recognized that this reduction in senior poverty rates over the second half of the 20th century is one of Canada’s social policy successes. At that time we were leading the world, in international comparisons, in how well our seniors were doing – we accomplished an amazing thing.
“But it seems we have become a little complacent and have let it slide. Senior poverty rates started going back up … in B.C., and I’m pretty sure it’s the same across the country.”
The study looks at economic insecurity among seniors, and also how wealth and income are distributed in that age group, which Ivanova identifies as 65-plus.
“We know that in the broader population there is very deep wealth and income inequality and we wanted to see if the same is true among seniors,” she says, adding that additional measures of economic insecurity were studied, including housing, inability to afford prescription medication, food insecurity, access to home care and other supports, to get a fuller view of senior poverty than one simply tied to the poverty line.
In Canada, that official poverty line, according to Statistics Canada’s Low Income Measure, is below $21,773, after tax, for singles and $30,792 for families.
And while a senior in Canada is less likely to have a very low income that places him/her below the poverty line, because of OAS/GIS income supports, an alarming 44 per cent of single seniors cluster just above the poverty line, compared to 17 per cent of working-age singles in that income bracket.
“This suggests that many single seniors have little income above the basic public pension provided by OAS/GIS and a modest CPP,” Ivanova writes in the report.
While technically not living in poverty, many seniors are at risk of dropping below the poverty line if their expenses, including housing and healthcare, increase.
“There is evidence that in B.C. a lot of seniors can’t afford prescription medications because we changed our provincial pharmacare plan in 2003 … the old one used to be aged-based, and now it is income-tested. But it has considerable deductibles and co-payments, even for very low incomes,” says Ivanova.
“So people who have a lot of medications and a lot of health needs face many out-of-pocket payments and deductibles.”
Seniors living just above the poverty line are missed in policy debates about the provision of adequate retirement income, with the focus mainly on those below the official income measurement. And, says Ivanova, the clustering around the poverty line is something not seen among working-age singles, or seniors not living alone.
“I think it is very important because if you have programs for people who live below the poverty line, they are going to miss a large number of people who are struggling and who are just above the poverty line.”
Research shows pay inequity that impacts women while working follows them into retirement. All Canadians receive OAS and GIS if eligible, but pension income, including CPP, is connected to years worked, and women are at a disadvantage here, says Ivanova.
“About the same number of men and women are eligible to receive income from the CPP, but the amount of income they receive is very different. Women get about 21 per cent less than men from CPP and that’s directly a reflection of the fact that women face a gender pay gap when they are working.”
As well as a pay gap, women are more likely to take time off from work to care for family, and that impacts how many pensionable years they accumulate.
“And if you look at private savings, because women earn so much less than men, they are less able to save for retirement. If you look at access to employer-sponsored pension plans and RRSP income, you see that women get about 45 per cent less than men.
“That’s why you see inequality in retirement income, because of inequality in the workforce … and that’s a problem because even though the gender wage gap has been reduced, we still have a very big gap in Canada.”
The availability of affordable housing also factors in the equation when exploring senior poverty rates. It’s a common assumption, says Ivanova, that seniors own their homes, and while many of them do about one in five seniors B.C. are renters, and across Canada it’s slightly more.
“Among seniors who rent, they really struggle with the housing market, especially in expensive places like B.C. If you look at CHMC’s core housing need … if you pay more than 30 per cent of your family income for your housing, that’s considered being in core housing need.”
Among senior renters in B.C., 42 per cent are in core housing need, says Ivanova. And if seniors have special needs, such as mobility issues, the lack of affordable and suitable housing becomes more of a concern.
As well as identify the problems, the report also suggests solutions:
• the introduction of a poverty reduction plan
• more home and community care
• reducing retirement income insecurity by further enhancing the CPP and other income supports for low-income seniors
• tackling income and gender inequality across all generations.
• developing more affordable housing
• launching a universal pharmacare program.
Without policy action, senior poverty rates are set to worsen as the boomer generation moves into the retirement years, says Ivanova.
“If we don’t address these issues, then women are going to continue to earn less and have less pensionable income, and then when they are older they are going to be the low-income seniors. We need to stop this cycle.”
This story originally appeared on ARIA (Alliance for Adequate Retirement Income)