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CAnaAA Starts Soon:Here's How Canadians received a 10- per-cent income tax cut last July but it will disappear Jan. 1 when they begin con- tributing .to .the ,Canada Pension Plan. How the plan = ds discussed in this story. By STEWART MacLEOD Canadian Press Staff Writer Most Canadians will fecl the pinch in their pockets Jan. 1 when payments into the Can- ada Pension Plan begin. The immediate effect will be to wash out the benefit of last July's 10-per-cent cut in income taxes. The long-term effect will be to provide most Canadians with a relatively good pension when they reach 65. e At this stage, it's unlikely that the start of compulsory contributions to the plan will hit many by surprise. The govern- ment has been bombing house- holds with information since the plan became law last May, and 200 revenue department asses- sors now are carrying the mes- Sage to the 400,000. employers in Canada. Full-page newspaper advertisements have been car- ried from coast to coast, partment, which will administer benefits, has until Jan. 1, 1967, before -payouts begin. Both departments have estab- lished special pension plan sec- tions to handle the extra work. Computers will play a large part. The revenue department will gather in 3.6 per cent of all in- come between $600 and $5,000 a year from all employed, per- sons 18 and over. Half will be paid by employees, half by em- ployers. Self-employed persons must pay the entire 3.6-per-cent contribution. They: enter the scheme when they earn $800 or more a year. Most employees will have their contributions deducted by their employers and forwarded to the government. The self- employed will make direct pay- ments to the revenue depart- ment. The minimum and maximum limits of $600 and $5,000 for the employed mean that persons earning less'than the minimum will not make any contributions or receive any benefits, and persons earning more than the eULL provincial border without changes in contributions or ben- efits. be But one important change was made in over-all benefits. The qualifying age for old-age security payment, which had been 70, is being reduced by one year annually so that by 1970 all persons aged 65 will qualify. By 1976, the maximum benefits. available from the plan, when added to the old-age payment, will total $179.17 a month, Both benefits are geared to the cost of living. Government actuaries have said that by the 1980s it is prob. able the rate of contributj will have to be increased. The: have been no firm predictions of what might happen. COVERS SPECIAL CASES A basic principle of the bill is that everyone who contrib- utes is eligible for a benefit. If a girl works for five years he- fore she marries, and then quits permanently, she will get bene- fits at age 65, from a five-year income averaged over the en- tire period. It wouldn't be a for-| jmaximum will not make any jtune. | So when most working Cana-|contributions on income above! 'There are other complicated dians begin shelling out 1.8 per) cent of their incomes--self-em-| ployed persons get hit for 3.6 per cent--it will scarcely be! without warning. ~ Probably few people miss the prolonged controversy ar countless conferences that brought the plan to the statute books. It's doubtful whether any other piece of legislation re- quired so much effort to bring it from conception to comple-| tion. And the plan is bound to raise new problems for the na- tional revenue and health de- partments which will adminis- ter it. DETAILS EXPLAINED The health department has) $5,000. RANGES WIDELY For average yearly earnings of $600 a contributor would re- eq) ceive a pension of $150 a year,,| nq.and the maximum pension on) $5,000 income would be $1,250. This maximum pension of $104.17 a month is separate from the $75 old-age security pension which, by 1970, will be available to everyone at 65. Pension payments begin Jan. 1, 1967, but they will be on a graduated scale until the plan reaches maturity in 1976. While it is basically wage-re- lated, in its early years it will provide "windfalls" far beyond contributions. This is because it |formulas covering those be- Itween 65 and 70 who earn in- come although retired, those |who become disabled, and wid-| ows of contributors. | For instance, if a widow is| lover 45 and has dependent chil- |dren, she could receive the full pension her husband would have received. Or she could get precisely nothing if she is under 35 without children. There is |provision for a $25-a-month ben- lefit' for children of deceased| {contributors. | | A contributor who becomes |disabled after 1970, after pay-| ling into the plan for five years, | |will get 75 per cent of what he would have received at 65, plus/ $25 monthly payment. iwith_the Canada Pension Pian |S0" the" enu fesui was oo the Sntributions and _hene.| tegrate" 'ihe ~ privaie same, The only' difference will be that instead of receiving one pension cheque they will get two -- from their private com- pany and from the government plan. How this integration is handled is strictly between em- ployer and employee. Some may decide to "deck" the Can- ada Pension Plan on top of the private scheme and thus in- crease contributions and bene- fits, As contributions begin pour- ing into the pension plan fund Jan. 1, they will far exceed benefit payments for many. years. A reserve, which will be made available to the provinces in the form of loans, will reach an estimated $4,900,000,000 by 1976. While the plan is completely separate from the old-age se- curity payments, the total ben- efits to be réceived in 1976 with the, government's initial venture into the fieid of seciabadl nacupity : r-to-1908 there..was th-| ing nr tat Sort: Tie ss frid Laurier's government brought in legislation to estab- lish government annuities, which still exist, and Canadians could, if they wished, contribute to their own retirements. STARTED AT $20 Direct government assistance didn't come until 1927. The Old Age Security Act, providing a $20-a-month pension at age 70 with a stiff means test, received royal assent March 31, 1927. At first the provinces .paid half of the cost, but in 1931 Ottawa took over 75 per cent of the burden. , In 1937, pensions of: $20 a month were introduced for blind persohs over 40. The means test was less severe in these cases. The first increase in old-age pensions came in, 1943 when they were raised? to $25 a month, but the total- income ceiling of $365 was refained so many pensioners co' not qual- make an interesting comparison ify for the increase. A year later, the ceiling was raised by Sitio aliow- for ths Increase... Tn. 1947, the pension was raised to $30 with a correspond- ik in. the Incame cail- ing. At the same time, the quali- fying age for blind persons was lowered to 21. In 1949, the pension was raised to $40--along with the blind pension--and in 1951 the means test was removed. At the same time, the old-age as- sistance program was_intro- duced to provide the pension at 65 with a means test. INCREASED $6 In 1954, the Disabled Persons Act was passed, so that persons unable to work could get the A year later, blind pensions became available to everyone over 18. Just before the 1957 general election, the Liberal government raised the pension to $46. The Conservatives, campaign- ing against "the six-buck boys," raised the pension to $55 when they: assumed office. In 1962, they again raised it, to $65, | After the Liberals returned to office in 1963, another $10 in- the pension io erm of thatthe quallfying-ege-¥ " Owetes 2 Sar Sh nie are by 1970 the pension will be available to everyone at 65. Both the Conservative. and New Democratic parties pledged a $100-a-month pension if they formed the government after the Nov. 8 general elec- tion. The Liberals promised that under their Canada Assistance Plan, which is still to come be- fore Parliament, bigger benefits will be available to those need- ing them. DON'T SEE TAXES Only about seven per cent of the Soviet Union's revenue is collected in direct taxes. dN To Remember Goo james To igengh rnee When Buy REAL ESTATE Aker--President Bil Feeters----Vice Pres. Schofield-Aker Ltd. 723-2265 | SAVINGS GALORE DURING THE OSHAWA TIMES, Mondey, December 27, 1965 1] Dalanad ANuecte An officiai of ihe Pelish toe. eign minwity charset Hates OUS and Uircnsvo SSperts ana of continued hostility towards Poland. Se Ulu Viiiespolucit WARSAW (Reuters) .-- The Polish government today prith- drew accreditation facilities from David Halberstam, 31, correspondent of the New York Times, and requested him to --_ the country' in about a week. DEORATED WITH HOLLY * Ancient Britons decorated sling the chil of their homes wit wood spirits feeling the winter, legend says. * - VADIANT | CLEANERS NOW HAS 2 CONVENIENT LOCATIONS @ 1120 Simcoe St. N, 728-2361 @ Oshawa Shopping Centre 725-1023 for pick-up and delivery call 728-2361 GIANT} ae ol becomes fully matured in 10/? | '55 @ | Those exempted from the plan} mere, ae eel ee Person include provincial government | t/employees --until such time as) \their provinces agree to enter the federal scheme; members lof the armed forces and the) |RCMP, who have their own! spent some $2,000,000 informing | Canadians about the plan, the) money coming from the pension |whd contributes during those 1 fund as part of administration) years'and then retires will ge costs. the same benefit(as though he This cost of 44 cents per con-|had contributed 40 years, tributor included sending out a| Assuming he earns more bane pamphlet to all 4,000,000 house-|$5,000, he would contribute | holds, followed up by a thick!$79.30 a year--1.8 per cent of| Plans; those who are _ ~ booklet -- the Canada Pension|earnings between $600 and |than $250 cash for working less Plan--which outlined all the de-|$5,000--for a total of $792 and|than 25 days a year for one em-| tails, including the contributions| he would then draw.a pension of|Ployer_in farming, logigng. or and benefits. Then there was a/$104.17 a month, Within eight|!umbering, fishing or hunt: rt series of nine newspaper ads. {months of retirement he would/@2y woman employed vi ery The revenue department, re-|be ahead of the game. |husband or vice versa, and em-) sponsible for collecting the con-| This relatively short maturity |! loyees of Pie hag big pul tributions, sent out two book-| period was one of the more con-|izations, including foreign gov- lets to all employers--Contrib-|troversial clauses in the mas-|ernments. ution Tables and Information )sive pensions bill. It means, in| pay aRG NS for Employers. In addition, tieletfect, that future contributors|CAN MERGE PMANS 200 assessors, hired early in the will subsidize those receiving private pension plans there may summer, are following up with | windfalls. be no difference in their total Shop Wednesday & Thursday Night Until 9 P.M. ESPAY 'TIL 6 P.M. personal calls. It was the biggest such blitz ever sponsored by the govern-| ment. With much of the litera-| ture coinciding with the general |introduced it aroused|Changes w n made in its format. Nearly two Several Conservatives Years of exhaustive actuarial election campaign, criticism parties, said the information booklet for householders, carrying a pic- ture of Prime Minister Pearson, | was designed to influence vot-) ers, Judy LaMarsh, then health) among. opposition) THIRD PLAN WINS Actually, the pension plan as it now exists was the third one in Parliament, as ere constantly being and economic studies went into it, along with countless confer- ences, wearying federal-provin- cial negotiations, 26 days of Commons debate, 51, sittings of a Senate-Commons committee, FEATURE EVENT DIRECTORY | FOR YOUR ENTERTAINMENT PLEASURE IN ed MEN'S SUITS Buy One... and Get A Pair of SUITS FOR THES PRICE OF ONE minister, said the publicity| campaign was planned months | ahead of the election. 3 The federal plan was compli- FACES DEADLINE jcated by the fact that Quebec Because contributions begin! was planning its own. Negotia- this Jan. 1, the revenue depart-|tions between the two govern- ment had the toughest assign-|ments finally meshed the plans ment in gearing itself for col-|into an identical structure so jection duties» The health de-"persons can transfer across the ane neath and three days in the Senate it- elf. With Purchase of Any Suit Priced at 59.50 or More ! | These fine Topcoats are all wool mater- TORONTO mer 1,00M shatsrr yt veeennagnevanest penne ATMA TEE ML SLACK spe 4 ore | @ Imported and domestic wool tweeds in Glen laids, bold checks, windowpane checks, oundstooths and nailheads. @ Carefully tailored in easy-fitting two-and three-button styles, many natural-shoulder jackets included ! Shades-of-brown, grey, olive and blue. 36 to 46. ns 1 -00 eo, we) Shape retaining. Yarn Dyed Wool Worsted in disting- uished stripes, checks, nailhead weaves. Vibrant new shodes of Grey, Blue,Brown and Olive. O'KEEFE CENTRE Dec. 26 - Jan. 1 Nationa! 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