Paul Delean: Old-age pensioners getting a 2.8 per cent cost-of-living boost

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The newest cost-of-living improve for Outdated Age Safety recipients and wait occasions for demise certificates in Quebec had been among the many matters raised in latest reader letters. Right here’s what they needed to know.

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Q: Are old-age pensions going up once more in October?

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A: They’re. The newest cost-of-living improve for Outdated Age Safety (OAS) and Assured Revenue Complement (GIS) recipients might be 2.8 per cent for the three-month interval from October to December, reflecting common Shopper Worth Index (CPI) numbers from Might by means of July relative to the earlier three-month interval. It follows a bump in OAS of two.8 per cent in July and leaves the pensions greater than seven per cent increased than a yr in the past.

The newest CPI numbers point out costs are up seven per cent for the 12-month interval resulted in August, down from 8.1 per cent for the 12 months resulted in June. The utmost month-to-month OAS pension is now $685.50, up from $666.83 in September, for individuals who began receiving it at 65 and are youthful than 75. Canadians 75 and older bought an extra, everlasting increase of 10 per cent in July.

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Q: How lengthy ought to it take to get a demise certificates from the federal government? It’s been months.

A: Quebec’s register of civil standing had problem issuing demise certificates promptly previous to the pandemic, which it corrected considerably with further staffing after a pledge to do higher by Labour, Employment and Social Solidarity Minister Jean Boulet, however issues seem to have surfaced once more, based mostly in your expertise and that of others.

Delays of a number of weeks and even months after the paperwork has been submitted are extra frequent than distinctive, in accordance with Jane Blanchard, an aftercare counsellor on the Kane & Fetterly Funeral House who has helped households with the paperwork to settle estates for the previous 17 years. Followup calls used to hurry up the method, however they’re not as efficient, she stated. “I don’t know what’s occurring there.”

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The ministry responded that its August numbers present the common wait interval for a demise certificates utilizing the common stream was 8.3 working days after the demise had been registered. But it surely additionally stated 27.23 per cent of all submissions for registration required supplementary evaluation and verification, including unspecified time to the method. Delays within the issuance of demise certificates can drag out and add prices and stress to the settlement of estates. 

Q: The federal government has introduced so many issues to assist lower-income individuals in these tough occasions. What about one thing for seniors who aren’t wealthy, however have watched the worth of their RRIFs (Registered Retirement Revenue Funds) lower like loopy this yr? My minimal RRIF fee for this yr was calculated utilizing the 2021 year-end worth, and that might be a giant chunk of the present worth. Lots of people are on this place. Would it not not make sense for the federal government to scale back or possibly even waive the compulsory withdrawal price? You don’t need seniors to make use of up their saved capital shortly after which have to depend on authorities applications sooner or later.

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A: It’s too late to do something this yr, however the federal authorities might ease the ache for seniors by decreasing the necessary withdrawal charges from RRIFs for 2023, because it did in 2020 (by 25 per cent) when the inventory market briefly tanked at first of the pandemic.

For Canadians whose RRIFs have important inventory positions, this might be a a lot worse yr than 2020, with double-digit drops on each Canadian and U.S. fairness markets by means of September. That decline in worth, coupled with the necessary annual withdrawals (that are calculated in accordance with the age of the plan-holder or their partner or common-law accomplice and the worth of their plan on Dec. 31 of the previous yr), has considerably eroded many RRIFs in 2022. A break on the necessary withdrawals would give them an opportunity to get well a few of that misplaced floor.

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As issues stand, the annual RRIF withdrawal minimums — which rise progressively as you age — are 4 per cent at 65, 5 per cent at 70, 5.40 per cent at 72 and 6.82 per cent at 80. You may defer changing an RRSP to a RRIF as late as Dec. 31 of the yr you flip 71.

The Montreal Gazette invitations reader questions on tax, funding and private finance issues. You probably have a question, please ship it by e mail to Paul Delean at gazpersonalfinance@hotmail.com.