The Conservatives' planned changes to Old Age Security will save Canada anywhere from $10 to $12 billion, Finance Minister Jim Flaherty said Monday.
He let slip the number after a question period in which his colleague, Human Resources Minister Diane Finley, refused to answer questions about the estimate.
Flaherty's officials also refused to provide the estimate at a briefing to parliamentarians at the end of April, although they did give it to reporters covering the federal budget on March 29.
Speaking to reporters after question period, Flaherty allowed that he has heard an estimate of $10 billion.
"I've heard that number, I've heard $12 billion also. Something in that area," he said.
He repeated the government's contention that the cuts are necessary.
"It is very important our largest social program will be available for [Canadians currently under 54 years old] when and if they need that program."
The budget lays out a planned change to OAS that will gradually increase the age at which Canadians are eligible to collect OAS from 65 to 67. The change won't start taking effect until 2023.
Finley wouldn't reveal estimate
Neither Finley, the minister in charge of the OAS file, nor her spokeswoman, would answer a question about what the planned changes are expected to save.
Earlier in the day, Liberal MP Scott Brison said the House was likely to vote on changes to the program before they knew what the government expects to save by increasing the eligibility age.
Finance officials told MPs at a briefing that they would have to wait for a report by the government's chief actuary, Brison said. The chief actuary reports after changes are made to the law, so the report won't be available until after the budget implementation bill becomes law
MPs voted Monday evening on second reading of the budget implementation bill, C-38, which is more than 400 pages long. It includes changes to environmental regulations, OAS, fisheries, immigration and other laws.
Once the bill passes second reading, it moves to the House finance committee. The NDP spent more than a day negotiating with the Conservatives to split the bill into seven parts to make it easier to study, but the government refused, arguing the NDP would vote against it anyway.
Brison pointed to a number of reports, including from the Department of Finance and Parliamentary Budget Officer Kevin Page, that say OAS is already sustainable.
"This is an attack on Canada's most vulnerable. And at a time when Canadians are concerned about income inequality, it's an attack on some of Canada's poorest families," Brison said.
"Until Canadians wake up and understand that they have a government in Ottawa that's trampling democratic freedom... the Conservatives will continue to abuse the system."
NDP finance critic Peggy Nash echoed Brison's concern Monday.
Can't do the math
"The OAS cuts are perhaps the single-most important measure in this budget and they can't even say what it will cost," Nash said.
"How does the minister know that her cuts will make OAS sustainable, when she can't even calculate, can't even do the math to tell us how much these cuts will cost?"
Finley didn't answer the question, instead accusing the NDP of fear-mongering.
"No one who is [currently] receiving OAS or GIS will see cuts," Finley said.
A spokeswoman for the chief actuary said the next required report is expected in about two years and referred questions about any report "reflecting changes currently being debated in Parliament in Bill C-38," to Finley's office.
OAS vs CPP
Here is a look at OAS and the CPP and how they differ. (Getty) <em>With files from CBC</em>
What is OAS?
The Old Age Security pension is a monthly payment available to Canadians aged 65 and older who apply and meet certain requirements. Unlike CPP, it is not dependent on a person's employment history and a person does not need to be retired from a job to qualify. The government adjusts the OAS payment every three months to account for increases in the cost of living according to the Consumer Price Index. The average monthly amount was $508.35 in the last quarter of 2011. The maximum payout for the first quarter of 2012 is $540.12. There are also supplementary programs, including the Guaranteed Income Supplement, which provide additional income to low-income seniors. The government claws back OAS payments from high-income Canadians. In 2011, for example, if you were retired but had an income of more than $67,668 (from things like pensions and personal investments), the government would reclaim part of your OAS payment - 15 cents for every dollar of income that you had above the $67,668 threshold. That means that if you were retired with an annual income of around $110,000 or more in 2011, your OAS payout would be reduced to zero. (alamy)
Who Is Eligible?
OAS is available to Canadian citizens and legal residents living in the country who have spent at least 10 years in Canada after they turned 18. It is also open to people outside of the country who were Canadian citizens or legal residents on the day they left the country, as long as they spent at least 20 years of their adult life in Canada. (Getty)
When Should You Apply?
A person should apply for OAS six months before they turn 65. If you have not lived in Canada continuously or were not born in Canada, the government requires a statement containing all the dates when you entered and left the country. It may also ask for supporting documentation. If a person applies after age 65, they can receive up to 11 months in retroactive payments along with a payout for the month in which a person applies to receive OAS. So if a person applied after their 66th birthday, they would receive 12 months of OAS payments. (<a href="http://www.flickr.com/photos/elwillo/" target="_hplink">Flickr:Keith Williamson</a>)
How Is The Rate Calculated?
In order to qualify for a full pension, a person must have lived in Canada for at least 40 years after turning 18. People also qualify if they reached the age of 25 on or before July 1, 1977, and either lived in Canada, had some residency in the country after age 18, or held a valid Canadian immigration visa and spent the 10 years immediately before appying in Canada. For those who do not qualify for a full pension, a partial amount is paid out based on the number of years spent living in Canada. For instance, if a person has spent 36 years of their adult life in the country, they will earn 36/40th of the full OAS amount. Based on the eligibilty requirements, the minimum payout is one-quarter of the total, to account for a total of 10 years spent in Canada. Once a partial pension has been approved, the percentage of the total OAS pension received will never increase even if a person spends more years in Canada. (Matt Cardy/Getty Images)
What Is CPP?
The Canada Pension Plan is a form of retirement income that is open to all Canadians who have worked and paid into the system through deductions from their paycheques. The amount a person receives under the system depends on how much and for how long a person contributed, along with the age at which a person started receiving CPP payments. There are three types of CPP benefits: disability benefits, retirement pension and survivor benefits. For the purposes of clarity, this article focuses on retirement pension form of CPP. The average monthly CPP benefit in 2011 was $512.64. The maximum payment in 2012 is $987.67. The government adjusts the CPP rate every January to account for changes in cost of living as measured by the Consumer Price Index. According to Service Canada, "If you have lived and worked in Canada most years between age 18 and 65 and earned about the average Canadian wage ($39,100 in 2002), at age 65 you would receive a CPP retirement pension of about $788 a month." (Getty)
Who Is Eligible?
Anyone who has made a payment to CPP is eligible for full retirement pension benefits once they reach the age of 65. A person can begin receiving CPP anytime after age 60 if they stop working or reduce their income, although they incur a financial penalty by doing so. In 2012, a person receiving CPP early will be subject to a 0.52 per cent reduction for each month before the age of 65 that they received payments. That number is slated to rise to 0.6 per cent each month in 2016. On the other hand, if a person chooses to delay CPP payments they receive a similar increase for each month they wait between the age of 65 and 70. In 2012, that increase works out to 0.64 per cent per month and will rise to 0.7 per cent next year. (alamy)
When Should You Apply?
This is really up to the individual and whether they want to receive a smaller or larger CPP benefit. However, the government recommends applying six months before a person wants their pension to begin. Canadians can apply online or print out an application and deliver it to a Service Canada location. Similar to OAS, a person can receive retroactive payments covering up to 12 months if they delay applying for CPP until after their 71st birthday. (alamy)
How Much Do I Contribute To CPP?
A person contributes 4.95 per cent of of their total pensionable income -- set at a maximum of $50,100 in 2012 -- to a total of $2,306.70 in contributions per year. Their employer contributes an equivalent amount. Self-employed people, on the other hand, must contribute both portions. Anyone earning less than $3,500 is automatically exempt from CPP contributions. At age 70, a person stops contributing to CPP even if they continue working. (alamy)