Seniors' discounts should be scrapped, study suggests

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kombat
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Seniors' discounts should be scrapped, study suggests

Post by kombat »

Most seniors are no longer poor like in the 1960s and '70s when the discounts started, says economist

I'm surprised I don't see a thread on this here already (if there is and I missed it, I apologize, please feel free to merge/delete this thread). A CBC article describes a very compelling argument for scrapping seniors' discounts, at least at the municipal level.
Harry Kitchen, the report's author, says a lot of the seniors' discounts offered by municipalities are unfair because most seniors don't need them.

"A lot of these discounts and special programs were introduced back in the 1960s, 1970s when a vast percentage of the seniors were poor," said the professor emeritus in the department of economics at Ontario's Trent University.

"Forward that through to 2008 [to] 2010, the percentage of poor in the seniors groups is smaller than any other age group in the country."

But he says municipalities giving a break to seniors are creating a situation where poorer younger people are subsidizing wealthier seniors.
It makes perfect sense - why should you get a discount based solely on your age? Shouldn't such subsidies/welfare be based on income/wealth, rather than something as arbitrary as your age demographic?
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Re: Seniors' discounts should be scrapped, study suggests

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I think it really just highlights how the tax system discriminates against those in real need. What is really needed is a universal aid system to those who truly are in need. From assistance to pay for university (through low interest loans) through to assistance with property taxes and transit fares, all these programs ought to be means-tested by some consistent standard.

e.g. we get half price ferry rides Mon-Thurs. Why not give everyone a lower discount then until the load is balanced. Same on the buses. Don't give us the discount at rush hour! Make OAS/GIS and welfare a continuous/seamless assistance system.

(In Mexico, if your are over 60, you can apply for a seniors card that gives you half price on buses if you are over 60. So a bus ride drops from 7 pesos to 3.5! Not many snowbirds take advantage of this when the minimum wage is 70 pesos a day and 14 of it goes to transit.)

But it will be done piecemeal like everything else, each change hurting some segment in ways that politician could never anticipate.
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Re: Seniors' discounts should be scrapped, study suggests

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We have many programs that discriminate against the young. Some are based on government monetary benefits, like the discounts you name, but also CPP (huge intergenerational transfers), age-independent financing of health care, seniors`community centres. Others are based on work rules, such as seniority in unionized jobs, tenure in colleges and universities, over-lengthy apprenticeships in some trades. Yet others are regulations that stop new businesses from starting up, e.g. the need to purchase quotas to produce milk, eggs or chickens, fierce opposition to Uber and its drivers.

The reason... Well, one reason is that seniors vote much more frequently than the young. As well, older people are more active in political parties and community groups, and so on. It is partly a function of free time. But it is also largely a function of cynicism toward politics, the establishment`, and anything outside one`s in group.

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Post by Davis »

+1 on seniors voting. I think that motivates a lot of the benefits provided by governments.

we should be careful to distinguish between subsidies being provided for seniors on public services, and price discrimination by business (including government businesses). Businesses use price discrimination to maximize their revenues - get more out of those willing to pay more. Businesses recognize that seniors are price sensitive, so they offer discounts accordingly - not as a social policy, but as a business strategy.

On the matter of government subsidies, I think it is more effective to subsidize people than goods or services. If a senior doesn't have enough money to take the bus, or pay for recreational facilities, give that person money, rather than subsidizing those things for all seniors.

And then you have to ask the question of whether non-seniors should be getting the same income support.
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Re: Seniors' discounts should be scrapped, study suggests

Post by brucecohen »

ghariton wrote:but also CPP (huge intergenerational transfers)
That was fixed prospectively in the 1997 CPP reform. Past cross-subsidies are being phased out as those recipients die off. If you go to the OSFI website you can find the CPP actuarial report. That report includes a table of the internal rates of return for age groups. You'll see strong correlation between age and IRR with a marked decline in IRRs for those entering CPP post-reform.

That said, I have been astounded by how well I am treated by both govt and business based only on my advanced age. Yes, govt should cull our perqs but won't, especially as US-style targeted tax breaks become the norm.
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Re: Seniors' discounts should be scrapped, study suggests

Post by AltaRed »

kombat wrote:I'm surprised I don't see a thread on this here already
We have discussed it, but more ad hoc in various threads pertaining to a specific program, etc. I am with those that think there is huge age discrimination in favour of seniors and have made my comments known from time to time in Letters to the Editor AND feedback to my MPs (which is obviously dutifully ignored). Fortunately I have yet to receive threats as a result of such Letters. OAS is my pet peeve but my views have already been vented too many times.

I agree with Bruce how grotesque it is that I can take advantage of senior's discounts from a wide range of goods and services. Some I take advantage of (e.g. property tax discounts) but most retail ones I don't.

The bus fare system issue came up periodically in Calgary and ultimately some necessary changes were made circa 2012 or so under huge protest from senior's advocates. Beyond the seniors' propensity to vote more often than younger lower income folk, it also seems too difficult to administer means tested systems versus simple age based systems without some Privacy concerns. If the logjam in this area is to be broken, something needs to give in terms of easily defining means tested individuals. Something akin to the status card system used by our First Nations folk is a convenient, but perhaps humiliating, way to do it.
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ghariton
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Re: Seniors' discounts should be scrapped, study suggests

Post by ghariton »

AltaRed wrote:it also seems too difficult to administer means tested systems versus simple age based systems without some Privacy concerns. If the logjam in this area is to be broken, something needs to give in terms of easily defining means tested individuals. Something akin to the status card system used by our First Nations folk is a convenient, but perhaps humiliating, way to do it.
I've run across that red herring in many other contexts. Simply make seniors' advantages, whether discounts or direct benefits, either (1) taxable, i.e. an addition to net income for tax purposes, or (2) subject to clawback, like the OAS.

FWIW, the U.S. has had decades of experience with means-tested subsidy programs, whether food, telephone service, or now Internet broadband. They don't work perfectly -- there will always be some abuse -- but in my opinion they are a step in the right direction.

The truth is, as you say, that we simply can't afford to give benefits to those who don't need them, especially as those benefits continue to grow.

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Re: Seniors' discounts should be scrapped, study suggests

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ghariton wrote:I've run across that red herring in many other contexts. Simply make seniors' advantages, whether discounts or direct benefits, either (1) taxable, i.e. an addition to net income for tax purposes, or (2) subject to clawback, like the OAS.
The trouble with both is the paperwork required to make it work. Every organization providing such a subsidy would have to submit all kinds of paperwork to both individuals and government, e.g. tax slips. That said, I suppose it would be somewhat self-correcting. Some organizations would cease providing subsidies due to the paperwork involved (which however doesn't then help those in need), and secondly, wealthy taxpayers would perhaps avoid such subsidies due to reduced benefits and/or tax time paperwork required.
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Re: Seniors' discounts should be scrapped, study suggests

Post by Insomniac »

The breaks are available, but many don't use them.

https://www.seniorsadvocatebc.ca/wp-con ... elease.pdf
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Re: Seniors' discounts should be scrapped, study suggests

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AltaRed wrote:Some organizations would cease providing subsidies due to the paperwork involved (which however doesn't then help those in need), and secondly, wealthy taxpayers would perhaps avoid such subsidies due to reduced benefits and/or tax time paperwork required.
In BC, they use the seniors health card. All they would have to do is add a means test.

But this will not happen in my lifetime. Plus all my friends say "What? Are your crazy?" so I lay down and let it happen!
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Re: Seniors' discounts should be scrapped, study suggests

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kcowan wrote:In BC, they use the seniors health card. All they would have to do is add a means test.
The BC health card (or driver's license which is on the same card for me) would only work for age test (or in the case of First Nations ethnic origin). The means test would/could vary each year depending on T1 tax return filings. Don't see how a card could work for that unless they were issued annually.
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Re: Seniors' discounts should be scrapped, study suggests

Post by Bylo Selhi »

kcowan wrote:In BC, they use the seniors health card. All they would have to do is add a means test.
The real impediment in these sorts of schemes, at least in ON, is privacy legislation. Here they issue separate health cards and drivers license cards because health cards are generally only to be used as ID for healthcare related purposes. It got so bad that ON residents who don't have a DL can apply for a third card type to use as photo ID in all other situations. And then there's the LCBO issued BYID cards for young drinkers.

Now imagine if ID cards also bore some sort of distinctive mark to indicate the holder had passed (or is it failed?) a means test? The PC crowd would compare that to the indignity of wearing a scarlet letter or yellow badge.

The OP talks about municipal discounts. Municipalities would either have to administer local means tests or have to convince Ottawa to share income tax data with them. Good luck with that.

(Remember too that the OAS with clawback system was enacted in order to spare seniors from the indignity of undergoing a means test to prove they needed welfare from Ottawa.)
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Re: Seniors' discounts should be scrapped, study suggests

Post by DenisD »

I think, in Calgary, they ask for a previous year Notice of Assessment for some low income programs.
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Re: Seniors' discounts should be scrapped, study suggests

Post by kcowan »

Yes even the feds are not permitted to share information with the provinces. So if you have been leaving the province to go abroad, how are they going to prove you were gone more than 180 or 212 days? Apparently they put the onus on you to prove you were here because of that.

I know it is troublesome, but, aside from using age, how do you propose they do it? I can see a universal ID card where the owner chooses what is divulged. But who would issue it and control it?
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Re: Seniors' discounts should be scrapped, study suggests

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Big Brother, of course. :wink:
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Re: Seniors' discounts should be scrapped, study suggests

Post by OhGreatGuru »

I think the key piece of information in this study is: "Thanks to aggressive pension and guaranteed-income programs, the poverty rate among seniors has fallen from 36 per cent in the 1970s to about 12 per cent — lower than the rate among younger people."

This eliminates the rationale for many seniors' "discounts". With regard to discounts for municipal services, I would be happier about doing so if property taxes were based on income instead of property value.
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Re: Seniors' discounts should be scrapped, study suggests

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We were just trying to recall what kind of senior discounts we benefit from. Only ones that come to mind:

BMO don't charge us service fees.
We get eyes tested free in Ontario.
Our pharmacy gives us a 10% discount on non-prescription items. But not on Globe & mail :)
Coffee down here in SC is 75c at McDonalds instead of $1.00 (any size) but it is awful.

What are we missing out on?
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Re: Seniors' discounts should be scrapped, study suggests

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Many retail outlets have one day a week, or one day a month, where seniors get 10-15% off. I can think of haircutters, the Bay, Rexall, etc.

Then there are standing discounts for movie tickets, aquariums, museums, hotels, certain restaurants, etc, etc. I think I even get an age discount on my BCAA home and auto insurance. It is this latter group that I watch for.... not the retail stores themselves (I dislike going into any retail outlet at any time).

You would be surprised where one can get seniors discounts, many of which are not well advertised. I think they should all be scrapped.
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Re: Seniors' discounts should be scrapped, study suggests

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Springbok wrote:We were just trying to recall what kind of senior discounts we benefit from. Only ones that come to mind:

BMO don't charge us service fees.
We get eyes tested free in Ontario.
Our pharmacy gives us a 10% discount on non-prescription items. But not on Globe & mail :)
Coffee down here in SC is 75c at McDonalds instead of $1.00 (any size) but it is awful.

What are we missing out on?
Off the top of my head....
Ontario Drug Benefit plan (this is a big one which you're surely not missing out on)
I can ride publicly subsidized GO Transit for 50% off. Local transit agencies like Toronto's TTC also grant senior discounts
Ontario Senior Homeowner's Property Tax Grant (for those with up to $50,000 of income)
City-provided snow shoveling in many Ontario municipalities
Income tax age credit
Income tax pension income credit
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Re: Seniors' discounts should be scrapped, study suggests

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brucecohen wrote:Off the top of my head....
Ontario Drug Benefit plan (this is a big one which you're surely not missing out on)
I can ride publicly subsidized GO Transit for 50% off. Local transit agencies like Toronto's TTC also grant senior discounts
Ontario Senior Homeowner's Property Tax Grant (for those with up to $50,000 of income)
City-provided snow shoveling in many Ontario municipalities
Income tax age credit
Income tax pension income credit
I never thought of the tax credits as discounts ;) And, Property tax grant has never applied.

Of the others, we have no public transit, and I pay $$$ while away for driveway clearing. I don't think I benefit from the ODB plan. Neither my wife nor I have much need for prescription drugs. And when we do, I think we have to pay because costs are below the first $100.

We may have got a discount on Movie tickets here in USA, but hardly ever go to movies back home. When travelling, we ask for senior discount, but it seems it is same as CAA/AAA at most hotels. We mostly use air miles anyway and just pay a nominal amount. Not sure about the insurance. May be something because we are retired and not driving every day to work. My "senior" cars do get their own insurance discount :)
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Re: Seniors' discounts should be scrapped, study suggests

Post by ghariton »

Here's the big senior's discount. Seniors pay the same for health care, via taxes, as younger people, standardizing for income levels. Yet they consume between five and ten times as much health care resources. That's a huge discount from what seniors should be paying for health care.

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Re: Seniors' discounts should be scrapped, study suggests

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ghariton wrote:Here's the big senior's discount. Seniors pay the same for health care, via taxes, as younger people, standardizing for income levels. Yet they consume between five and ten times as much health care resources. That's a huge discount from what seniors should be paying for health care.

George
Are you not discounting that seniors have been paying taxes and medicare fees for years, well decades, before actually commencing to consume those health care resources in their now senior years? Did their payments not afford health care for other seniors and less fortunate individuals in the late 1960's and thereafter? It is not the consumption of services that is problematic but rather the cost and administration of those services I suggest.

Do you think all seniors are wealthy just because they are seniors?

Also I wonder how the little bus-pass subsidies and similar senior incentives at community centers and department stores stack up against the loss of tax revenue from the wealthy squirreling away their money in off shore havens as well as large tax benefits to corporations?

It would be grand and noble of you to refuse any senior's benefits offered or passed your way but please don't take it upon yourself to deny such benefits to many seniors who may very well need and depend on such.

No offense intended.
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Re: Seniors' discounts should be scrapped, study suggests

Post by Bylo Selhi »

ghariton wrote:Here's the big senior's discount. Seniors pay the same for health care, via taxes, as younger people, standardizing for income levels. Yet they consume between five and ten times as much health care resources. That's a huge discount from what seniors should be paying for health care.
Here's the big junior's discount. Juniors pay the same for education, via taxes, as older people, standardizing for income levels. Yet they consume between five and ten times [probably an even larger multiplier] as much education resources. That's a huge discount from what juniors should be paying for education. ;)
Shine wrote:Are you not discounting that seniors have been paying taxes and medicare fees for years, well decades, before actually commencing to consume those health care resources in their now senior years? Did their payments not afford health care for other seniors and less fortunate individuals in the late 1960's and thereafter? It is not the consumption of services that is problematic but rather the cost and administration of those services I suggest.
Health care is funded as an insurance scheme. Good (or lucky) drivers pay into auto insurance schemes on a similar basis. Some pay into the scheme for decades without making a single claim. Those premiums subsidize bad drivers (and generate profit for the insurers.)

How is that "fair"? ;)
Also I wonder how the little bus-pass subsidies and similar senior incentives...
A good economic argument can be made to justify many seniors' discounts. Because seniors are retired they are more flexible about when they need goods and services. For example they're more likely to use public transit and taxi services outside of rush hour when facilities are operating under capacity. Likewise with stores that would otherwise be mostly empty during normal business hours. Restaurants may offer a senior's "early bird" discount for meals consumed before the evening rush. This is a resource balancing argument that can be win-win for both parties.
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Re: Seniors' discounts should be scrapped, study suggests

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Shine wrote:Do you think all seniors are wealthy just because they are seniors?

Also I wonder how the little bus-pass subsidies and similar senior incentives at community centers and department stores stack up against the loss of tax revenue from the wealthy squirreling away their money in off shore havens as well as large tax benefits to corporations?

It would be grand and noble of you to refuse any senior's benefits offered or passed your way but please don't take it upon yourself to deny such benefits to many seniors who may very well need and depend on such.

No offense intended.
This argument has nothing to do with seniors, i.e. age. It has to do with means. Why should a low income senior be treated better than a low income 35 year old, as an example?
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Re: Seniors' discounts should be scrapped, study suggests

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AltaRed wrote: This argument has nothing to do with seniors, i.e. age. It has to do with means. Why should a low income senior be treated better than a low income 35 year old, as an example?
Multi-millionaires pay same for services as the average Joe. Should they pay more because on means?

Senior discounts are no different from other discounts offered by vendors. They are offered in order to attract customers and make the vendor more money. This may even apply to municipal services. Communities that cater to seniors attract more retirees. And retirees do boost local economies and therefore tax revenue. And then there is the political side.

I don't see this as a big issue - tempest in a teapot.

Afterthought - Maybe retirees should be charged more for internet use. As is evident from this forum, seniors have time on their hands and clog the networks with useless posts like this one :oops:
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