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The Retirement Income System in Canada

The purpose of the retirement income system is to provide retired persons with sufficient income to allow them to live with dignity, regardless of their income during their working years, and to maintain their income after retirement so there is not a dramatic decrease in their standard of living.[1] Since poor Canadians over 65 derive 90% of their income from government transfers,[2] it is important to have a basic understanding of the retirement income system in Canada. The following information is from the National Council of Welfare’s Pension Primer 1999.[1] Only the most significant programs are discussed. Refer to the document for more information.

The retirement income system is divided into three levels.

Level One: Income Security Programs


 What it is

 What it provides

Old Age Security - OAS

 A federal source of income for Canadians over 65 with incomes below a generous cut-off point.

 In 1998, annual payment was about $4900, indexed for inflation.

Guaranteed Income Supplement - GIS

 A federal source of income for pensioners who have little or no income other than OAS.

 The maximum payment in 1999 was $490/month for a single and $640 for a couple. Payments decrease with increasing outside income.

80% of single individuals who receive the Guaranteed Income Supplement are women, indicating their lack of outside income.

For single individuals and couples, the maximum OAS and GIS payments add up to less than the low income cut-off. The gaps between these government transfers and the low income cut-offs range between $500 and $5000 across Canada.[1]

For women, Old Age Security and Guaranteed Income Supplement payments represent almost half of their income on average, whereas for men, these payments represent only 25% of their income.[3]


1. National Council of Welfare. Pension Primer 1999. Ottawa, Minister of Public Works and Government Services Canada, 2002.

2. National Council of Welfare. Poverty profile 2001. Ottawa, Minister of Public Works and Government Services Canada, 2004.

3. Baines, C, Evans, P, Neysmith, S, Editors. Women's Caring: Feminist Perspectives on Social Welfare. Toronto, McClelland and Stewart, Inc. 1991.

All references for this section