Finance

Finance

Canada budget raises pensions benefit age and cuts penny

30 March 2012 10:31 (UTC +04:00)

Baku - APA-Economics. The eligibility age for Canada’s Old Age Security (OAS) benefits will rise to 67 from 65 starting in 2023, as part of the government’s new budget, APA reports citing Reuters.

The budget outlines C$5.2bn (Â£3.3bn) in cuts, with reductions across defence, health care and agriculture.

It also stops the minting of the Canadian penny, for a savings of C$11m. Pennies can still be used in purchases.

The change to the OAS will not affect Canadians who are currently above the age of 54.

Canadian Finance Minister Jim Flaherty announced the budget on Thursday, calling the OAS change an example of the government looking ahead over the next generation.

"Canadians are living longer and healthier," he told the House of Commons. "Canada has changed. Old Age Security must change with it."

The benefit is worth C$6,000 a year and the age change will also apply to a supplemental programme.

While the move has been explained as a way to deal with increasing costs of the benefit to the government because of the baby boomer generation, most boomers will not be affected by the increase.