Economic Status of Seniors

Research Highlights

• There is a rising proportion of seniors who are working
• In Ontario, 16.4% of elderly women and 9.8% of elderly men live in poverty. This trend is decreasing
• Unattached women aged 65 and over have the lowest income, assets and net worth of all senior family types
• Seniors in Guelph-Wellington who live in poverty face numerous challenges obtaining food, housing, transportation and community support services, as well as accessing social and recreation programs

Working Seniors
With increasing life expectancy and continuing medical advances, many Canadians live for two or more decades after retirement, and more of these years are spent in good health. This appears to be reflected in the rising proportion of working seniors.

A study on working seniors conducted by Statistics Canada found that 8.4% of Canadians aged 65 and over (305,000) were employed in 2001, up from 7.4% (255,000) in 1996.¹ This was a 19.6% increase, nearly twice the 11% growth in the total senior population during the same period.

In Guelph-Wellington, 8.7% of the elderly population is employed (2001 Census).²

Income, Assets & Net Worth
Senior families have lower average incomes than younger families, given that most are no longer in the labour force and have no employment income. The average after tax income ³ of elderly families in 2002 was $43,400, compared to $60,500 for all economic family types.⁴

There are considerable differences in economic circumstances depending on family status and sex. In 2002, unattached elderly women had an average after tax income of $21,900; compared to $24,600 for unattached elderly men.

The income of a senior family is much more likely to go further than that of a young family still saving for retirement, paying off a mortgage, or supporting children. For this reason, considering income alone is not sufficient when examining the financial well-being of seniors.

The largest asset of most seniors is their home. According to the 1999 Survey of Financial Security, two-thirds of senior families owned their own home. Of these, 90% owned their home mortgage-free. In 1999, the average estimated home equity of home-owning senior families was $138,000, of which $83,000 (60%) was appreciation from the original purchase price. ⁵

Nearly half of seniors are still saving, and only 1 in 10 are dipping into investment capital to make ends meet. Almost three-quarters (73%) of families headed by a senior reported having no debt in 1999.⁶ For the 610,000 senior families in Canada carrying debt, the median value was about $6,500, compared with about $32,000 for younger families.

As in the case of younger families, large unforeseen expenses can be crippling for seniors. About 8% of senior families felt that they would be unable to pay for an unexpected expense of $5,000, about the same as the proportion of 9% among younger families.⁷

Seniors and Poverty
Over the past couple of decades, there has been a decline in Canadian poverty rates for elderly persons, from 34% in 1980 to 17% in 2001.⁸ This decline is due in large part to government income transfers, such as Old Age Security (OAS), Guaranteed Income Supplement (GIS), Spouse’s Allowance (SPA), and Canada Pension Plan (CPP). In 2000, two-thirds of the income of Canada’s low income seniors came from OAS benefits and GIS.⁹

Table 1: Sources of Income for Poor Seniors in Canada, 2001 ¹⁰

Despite these gains, the number of seniors who live in poverty remains high. Latest available figures put it at 21.2% of women and 11.1% of men over the age of 65 years in Canada (2001).¹² Substantial differences vary from province to province. Alberta has the lowest rate, while Quebec has the highest one. Ontario’s rate is below the median – 16.4% of senior women and 9.8% of senior men.

As illustrated in the graph below, poverty among seniors has a pronounced gender bias. Many older women do not have pensions because they had only limited participation in the labour market, on average received lower rates of pay, and/or often had jobs without benefits. Furthermore, since men's life expectancy is lower, many more elderly women are widowed than men. As a result, their husband's pensions may be cut off or drastically reduced. And senior women are almost twice as likely as men in the same age group to be living alone.

What are the Social Service Issues in Guelph-Wellington?
Individuals and families who live in poverty face numerous challenges obtaining basic needs, such as food, housing, transportation. Seniors who live in poverty are an especially vulnerable group.¹³

Lack of community support services
The additional supports that seniors may require are not always covered under government programs and benefits. A senior living in poverty must try to find the money within a limited income or do without.

Living on fixed incomes
Persons 65 years of age and older generally have retired from the labour force, often as a result of mandatory retirement policies. Or, where a senior wishes to participate in the labour force, their age can prove to be a barrier. In either case, seniors can be extremely limited in their ability to supplement their income.

Cost of institutional care
Elderly couples who are able to manage on their pensions while living together in the family home can face hardship when one of the partners must enter a long-term care residence. Essentially, their income now must cover the costs of maintaining two residences. The partner still living at home may be left living in poverty.

Access to social and recreational opportunities
Although there are a number of social and leisure opportunities for seniors in the community, most charge a fee. Transportation costs and recreation fees can be barriers for seniors who have limited disposable incomes.

1. Statistics Canada (2004). The Daily. Wednesday, February 25, 2004.
2. Statistics Canada defines elderly as people aged 65 years and over.
3. Average income after tax is total income, which includes government transfers less income tax.
4. An economic family is a group of individuals sharing a common dwelling unit who are related by blood, marriage (including common-law relationships) or adoption.
5. Statistics Canada (2004). The Daily. Friday, July 23, 2004.
6. Statistics Canada (2003). The Daily. Monday, November 17, 2003.
7. Statistics Canada (2003). The Daily. Monday, November 17, 2003.
8. National Council on Welfare (Autumn 2004). Poverty Profile 2001.
9. CCSD (May 16, 2003). Census Analysis – Census Shows Growing Polarization of Income in Canada.
10. National Council on Welfare (Autumn 2004). Poverty Profile 2001, table 6.3, p. 84.
11. QPP = Quebec Pension Plan.
12. National Council of Welfare (Autumn 2004). Poverty Profile 2001.
13. The Urban Poverty Consortium of Waterloo Region (October 25, 2000). Let’s Talk About Poverty.