Teaching financial dependence

Posted on April 28, 2022
Filed Under Commentary, Economic & Political Philosophy | Leave a Comment

Teaching financial dependence

I have a quandary about social assistance. On the one hand, I believe we have to provide decent shelter and care for everyone. On the other, I worry we risk teaching people they are suckers to manage their incomes and savings responsibly and prepare for their retirement.

When people need assisted living their health and their income are assessed. Some people wind up paying the full rates which run to several thousand dollars every month. They use up their life savings and even their equity in their home to pay their monthly assisted living costs. Meanwhile, others are paying nothing but a share of their government financed Old Age Security and supplement. They have no equity or independent source of income to contribute.

Some of those people were good, hardworking people with unlucky employment or health records. Some were irresponsible spendthrifts who never made any effort to provide for themselves or their families.

We can’t get judgmental about that. Just one reason is that those people often have children already suffering for their parents’ hardships. There is just no economic justice to be found or sought when it comes to the care of children or people who never had the guidance or ability to make good choices or work productively. We have to provide them healthy food and shelter.

That however leaves us with the question of how to treat those folks who denied themselves the gratifications of toys and indulgences all their lives so they could educate their kids and pay their own way in retirement. It makes their discipline and sacrifice pointless and foolish if we just take their savings when they need assisted living.

The idea of the state being responsible for care for the aged is not itself old. When I was a kid, most old folk were sheltered and cared for by their families. In many cases, the child doing that got their parents’ house in recompense.

The province has made some moves to lessen the penalties for being financially responsible. We need to do more.

I like to think a guaranteed income program like Old Age Security might be the answer. That gives every Canadian a monthly payment when they reach 65. When their income is over roughly $60,000, the feds start to claw it back at the rate of 15% of the dollars above the $60k. By the time your retirement income reaches roughly $120k, you receive no more payments from OAS.

Something like that, starting at birth or adulthood, with appropriate monthly payments and upper income limits like OAS might work.

I’d like to hear others’ thoughts on this. DAC

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