Understanding the Allowance for the Survivor
The Allowance for the Survivor is one of the supplementary benefits payable under the Old Age Security (OAS) Act.
In my opinion, there is no valid policy rationale for this benefit. It happened more by accident than by design, and is a good example (in my mind) of how some well-intentioned government programs evolve into something else.
Who is eligible for the Allowance for the Survivor?
In order to be eligible for the Allowance for the Survivor:
- You must be between 60 and 65 years old.
- You must have had a spouse or common-law partner who has died, and you must not have remarried or entered into a common-law relationship after their death.
- Your income must be lower than the maximum allowed income level. For example, for the period of January through March 2018, your annual income for 2016 must normally have been less than $23,952.
- You must be a Canadian citizen or a legal resident of Canada.
- You must reside in Canada now, and have at least 10 years of residence in Canada since turning age 18.
How is my Allowance for the Survivor calculated?
All of the same rules regarding what is considered as income for GIS purposes apply to the Allowance for the Survivor.
Related article: Understanding Guaranteed Income Supplement (GIS)
For the most part, the Allowance for the Survivor payment is reduced from the maximum payable by 50 cents for every dollar of other income that you have, but there are some income levels where this reduction is 75 cents for every dollar.
The actual amount of the Allowance for the Survivor payment is determined using rate table 5.
What is the policy rationale for the Allowance for the Survivor?
As I said, simply stated, there is no valid policy rationale for the Allowance for the Survivor and it is a good example of how some well-intentioned government programs evolve into something else.
The story begins in 1975, with the creation of a new benefit under the OAS Act, called the Spouse’s Allowance. The Spouse’s Allowance was payable only to an age 60 to 65 spouse of an OAS/GIS pensioner.
The Spouse’s Allowance worked fine for the most part, but created a very difficult situation if the OAS/GIS pensioner died while the spouse was still under age 65. Not only did that mean that the younger spouse ceased to be eligible for the Spouse’s Allowance, it often meant recovering one or more months of overpayment from them, especially if there was a delay in notifying the department of the pensioner’s death.
Thus, around 10 years later, the Extended Spouse’s Allowance was created, whereby when an OAS/GIS pensioner spouse died, the surviving spouse would continue to be eligible for the Spouse’s Allowance for six months after the pensioner’s death. This eliminated most of the overpayment situations, and it provided a short bridge benefit to help the younger spouse after the death of the pensioner.
It wasn’t an ideal solution though, and it didn’t address the situation that occurred when the older spouse died shortly before turning age 65, but after the couple had already applied for and been approved for their OAS/GIS and the Spouse’s Allowance. In those cases, there was no entitlement to the Spouse’s Allowance for the month of death, so there was no entitlement to the Extended Spouse’s Allowance either.
To resolve this situation, a few years later the Widow(er)’s Allowance was created, whereby someone whose spouse had died at any age could be eligible for a benefit when they turned age 60.
Finally, under the Modernization of Benefits and Obligations Act in the year 2000, this benefit was extended to survivors of same-sex and common-law partner relationships, and the current Allowance for the Survivor benefit was created.
This new benefit solved all of the problems with the previous Spouse’s Allowance and the Extended Spouse’s Allowance, but it created a new policy dilemma.
The policy dilemma
Is there any true policy objective that is being met by providing a benefit to someone whose spouse or common-law partner died possibly 40 years earlier? And if so, would that policy objective really cease to exist if that person had a short-term marriage or common-law relationship subsequently?
Are such individuals somehow more needy or more deserving than someone the same age (and who meets the same residency and income criteria) who either never had a spouse or common-law partner, or where that relationship ended due to separation or divorce instead of due to death?
Where will it go from here?
I see the current Allowance for the Survivor as a temporary benefit, enroute to the day when anyone over age 60 will qualify, provided that they meet the income and residence requirements.
The impetus for this next change could come from public pressure; it could be a single appeal case where someone convinces the courts that the current legislation violates the Charter or it could be something that one of the parties adopts as an election issue.
If I’m right, what should this new benefit be called? How about something like the Allowance for anyone not married or living common-law benefit, or the AANMLCL benefit for short?
For the current maximum allowed income levels for the Allowance for the Survivor.