As recently as 40 years ago, old age meant living in poverty for more than a third of Canadian seniors. Thankfully, public programs like the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement changed this, cutting BC’s seniors’ poverty rate to a low of 2.2% in the mid-1990s, among the lowest in the western world.
Instead of building on this social policy success, however, we have let it lapse, and seniors’ poverty rates are on the rise again – now 13%. Nearly 100,000 BC seniors were living below the poverty line in 2014 (the latest data available), and many more have incomes only marginally above the poverty line.
The challenges faced by these seniors are largely invisible in our society. We tend to think of seniors as a homogenous group of well-off retirees, but such generalizations ignore a bigger picture of deep income and wealth inequality across generations.
While most seniors (particularly those living with their spouse) are doing okay, a disturbingly large number of single seniors—44%—have incomes between $15,000 and $25,000. Many of them are not technically considered in poverty but they struggle to cover basic living expenses and pay for the additional costs that come with declining health, reduced mobility and loss of spousal and community support in older age.
Single women face a particularly high risk of economic insecurity in old age and a staggering one-third of single senior women live below the poverty line. This is largely the result of gender inequality in the job market, which translates into unequal pension income in old age.
The typical senior woman in BC receives 21% less income from the Canada Pension Plan than the typical man. Senior women are also less likely to have access to private retirement income, including employer-sponsored pensions and RRSPs, and those who do receive 45% less on average than men.
Seniors have higher average wealth and are more likely to own a home than working-age families, largely because they have had more time to earn income and save. However, a closer look at how wealth is distributed reveals that a significant number of Canadian seniors have very little. In 2012, the median wealth of the poorest 20% of senior families in Canada was $15,000 compared to over $1.6 million for the richest 20%.
While many seniors own their homes mortgage-free, others face unaffordable rents. One in five senior households in BC rents and therefore faces the same challenges associated with low vacancy rates and an increasingly unaffordable rental market that working-age renters do. In fact, senior households who rent are much more likely than non-senior renters to be in ‘core housing need,’ meaning they spend more than 30% of their income on housing or live in units that require major repairs.
The hardships faced by lower-income seniors are worsened by gaps in access to health services. Our public health care system does not adequately cover home support, residential care, prescription medications, community mental health, vision or dental care. Instead of fully paying for these essential services together as a society, the way we pay for doctors’ visits and hospitals, we have largely shifted the burden of costs to the sick and elderly, and their families.
Seniors are paying more out-of-pocket for prescription drugs after BC replaced its age-based drug plan with the so-called Fair PharmaCare program, which includes considerable deductibles and co-payments even for low-income families. As another recent CCPA report found, access to subsidized home support and residential care services has declined, and the number of private-pay assisted living and seniors’ residences has grown rapidly. Higher-income seniors can afford to purchase the services they need privately but many others cannot.
In the face of inadequately funded home and community health services, the burden of caring for frail elderly parents falls on family members, predominantly women, who are working to support their families and often caring for children too.
We can’t afford to stay complacent about the economic security of seniors at a time when people are living longer and the population in our province is aging.
Addressing the gaps in public supports for seniors need not detract from or mask the serious and growing economic insecurity experienced by younger generations. BC must develop more effective ways to support vulnerable members of our community no matter their age. Without broader efforts towards poverty reduction, reforms that curb income and wealth inequality, and measures to close the gender gap in our economy, today’s struggling working-age adults will become tomorrow’s struggling seniors.
Iglika Ivanova is a Senior Economist with the Canadian Centre for Policy Alternatives and author of Poverty and Inequality Among British Columbia’s Seniors.