Thousands of Canadians missing out on pension benefits
While it’s not Greece, Canada is still fairly comfortable place to retire.
A working couple who is retiring today at age 65 after earning the average industrial wage throughout their careers will receive a combined annual Canada Pension Plan and Old Age Security pension of about $36,000, indexed for life.
That’s a significant amount of retirement income – which makes you wonder why so many people never get around to collecting so much of it, says consumer advocate Richard Shillington.
Here are some startling statistics from a research paper he authored commissioned by the Task Force on Financial Literacy:
- 160,000 seniors are not getting the OAS benefit they’re entitled to receive (representing almost $1 billion in lost pre-tax income);
- 150,000 seniors are not getting the Guaranteed Income Supplement benefit even though they qualify; and
- 55,000 Canadians are not getting the CPP benefit they’d actually paid into.
Shillington also suggests that a significant number of others are getting less than they should from these programs, largely because they don't know the rules.
Taxpayers have to apply for these benefits, which are not paid automatically as soon as you become eligible for them.
Moreover, if you apply too late, you won’t get all the benefits you missed. Retroactive payments are limited to 11 months for OAS, GIS and CPP under federal law.
Shillington believes the federal government should do more to ensure everyone is getting his or her fair share but that would be an expensive exercise.
Do you know anybody who's been missing out? Where they eventually able to set things right?
By Gordon Powers, MSN Money