Canada's Seniors. Take-up and Application Rates improve

More Canadian seniors who are eligible for Guaranteed Income Supplement (GIS) benefits are actually receiving them, as both take-up rates and application rates have improved.

The GIS was established in 1967 as an additional benefit for low-income seniors receiving the Old Age Security pension.

In 2006, about 1.4 million seniors received the GIS. At the same time, roughly 159,400 seniors eligible for the GIS did not receive any benefits, but this was down from 191,700 in 2000. This decline occurred as the ranks of Canada's seniors rose to over 4 million.

Between 2000 and 2006, the take-up rate for the GIS among eligible seniors rose from 87% to 90%. The largest increases occurred among the two lowest benefit groups (less than $500 and $500 to $999 annually).

Take-up rates also increased for individuals aged 70 and over, with both men's and women's rates going up. While women had a higher take-up rate in 2006, the increase between 2000 and 2006 was slightly greater for men (4.1 percentage points for men compared with of 2.2 percentage points for women). Increases were also seen for those with good or fair health, homeowners and immigrants.

Changes in other sources of income can move seniors above or below the GIS eligibility threshold. Prior to 2007, those who fell below the threshold were required to re-apply for benefits, but many failed to do so. In 2000, about 45% of all eligible seniors required to apply for the GIS submitted an application. By 2006, this application rate had increased to almost 57%.

One of the most significant increases occurred among individuals with annual GIS benefits of less than $500. Between 2000 and 2006, their application rate increased by more than 20 percentage points. It was no longer significantly different from the rate for those with benefits of $2,000 or more.

In both 2000 and 2006, the application rate was highest for seniors aged 65 to 69. However, seniors 80 and over made the largest gains during the period, followed by those aged 70 to 79. Application rates for men and women also increased significantly.

Between 2000 and 2006, the probability of not applying when eligible decreased for those aged 70 and over, as well as for those who would receive relatively small payments. The rates of non-application for the older groups no longer differed significantly from other seniors once automatic applicants were excluded.

Increases in both the GIS take-up rate and application rate during this period coincided with a number of reforms by the federal government to simplify the application process. Since 2007, seniors have needed to apply only once to receive GIS payments for all years of eligibility, provided they file tax returns. This marks a significant change from the study period, when eligible seniors were required to re-apply if they lost eligibility during one or more years because of an increase in income.

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