LONG READ: Why data-based measures of poverty are not capturing the vulnerability of older adults

Different data-based measures of poverty in Canada are capturing vastly different pictures of financial insecurity among older adults, according to a new report by Maytree. 

The think tank, which focuses on “advancing systemic solutions to poverty through a human rights-based approach,” found that the Market Basket Measure (MBM) and the Low Income Measure (LIM) are measuring income adequacy using different data points, which “present very different stories.” 

In the report, Maytree researchers say the MBM, the official measure of poverty in Canada, “shows that seniors are doing well – they are less likely to live in poverty than the general population. However, the LIM shows the opposite — seniors are likelier to have low incomes than the general population.”

The MBM is calculated based on the cost of essential goods and services for each of the 61 regions, and equivalized based on household size.

The LIM, on the other hand, is a relative measure based on half the median household income of the general population.

“As we were doing this research, we wondered: What if the LIM was chosen as Canada’s official poverty line instead?” said Mohy Tabbara, a policy advisor at Maytree who works on income security. 

“We’d be having different conversations and seeing different narratives about seniors. The choice of measure has an impact on how certain groups have been seen, and the amount of investment made in supporting them.” 

“The fact that the MBM poverty rate has shown that seniors are living more adequately has probably encouraged inaction [among policymakers],” added Paloma Griffin, a policy researcher at Maytree.

“We don’t actually know how many seniors are living in poverty or how deep that poverty is. Having the right data is paramount to making informed decisions about our populations,” she added. 

Tabbara and Griffin, the primary researchers who worked on the report, said the federal government should develop a new seniors-specific measure of poverty.

They suggest the LIM be used alongside the MBM to offer a wider perspective on financial insecurity among older adults and in developing policies for seniors.

Financial security and stability are critical pillars of seniors’ overall wellbeing, added Laura Tamblyn Watts, CEO of CanAge, a national organization that advocates for older adults in Canada. 

“If you’re not financially well, your housing and care challenges become profound,” she said. “That also means you become more excluded from society and are more vulnerable to forms of exploitation.”

What kinds of data do we need to understand seniors’ financial security better?

Audio Caption: Laura Tamblyn Watts, CEO of the senior advocacy organization CanAge, explains the differences between MBM and LIM.

The MBM is developed based on the needs of a standard nuclear family: two parents and two children. It is then adjusted based on household size and where the home is found in Canada. For seniors, the household size is usually a couple or a single person living alone. 

However, policymakers make assumptions about seniors who have different needs than a nuclear family of four so the MBM does not capture their reality, Griffin said.

These conditions aren’t true for low-income seniors, but based on the MBM, “you’d even congratulate yourself [that] in Canada, we’ve done a good job of making sure that older families are doing well,” Watts added.

In reality, the assumptions that the MBM makes don’t factor in additional costs that older adults face, which affect their financial stability. Without these data points, the MBM’s view of income adequacy for seniors in Canada is skewed: 

• Income: Many seniors are likely on fixed incomes in the form of pensions, Tabbara said. However, certain groups of people often don’t qualify for the full Canada Pension Plan (CPP) – this could include women, who might have been in the workforce for less time than their male partners, or immigrants to Canada, who only qualify for the full CPP if they’ve lived and worked in Canada for 40 years, Watts said.

• Debt: The new cohort of older adults is “the most indebted cohort we’ve ever had,” Watts said. While the generations that came before had lots of savings and a “high resistance to debt,” the baby boomer generation has experienced both “cheap debt” and inflationary prices, she added. They’ve also seen their investments earn less over time. As this generation is more likely to use loans and credit cards, she has seen people no longer able to afford their debt.

• Health costs: “Most seniors are not working, and when we lose employment, we also lose extended health benefits,” said Derek Cook, director of the Canadian Poverty Institute. Services such as vision care, hearing aids, and prescription medication are usually not covered by public healthcare. At the same time, the federal government announced this month that they’d be covering dental care costs for seniors above the age of 87 who meet certain income criteria. Spending $5,000 to $10,000 on hearing aids is quite common, as is needing a new set of hearing aids, Watts added. “But you won’t see that in the [MBM] basket.”

• Long-term care costs: If older adults aren’t already cared for by family and friends, they will likely have to pay out-of-pocket for long-term care. Watts estimated the total cost of a support worker who is not qualified is already $100,000, while for qualified carers, older adults are likely looking at a total price of $300,000. 

• Housing: In addition, focusing on housing affordability doesn’t consider whether that housing suits older people’s needs. “Are homes accessible and in good repair?” asked Cook. “Are they in a place with easy access to shops, amenities and services? Are seniors able to upgrade their homes for accessibility or relocate to places that are more accessible?”

• Work: Cook is increasingly seeing seniors working beyond the average retirement age to supplement other forms of income. This isn’t reflected in measures of poverty. While additional income might push seniors above a poverty threshold, it’s also important to note that these forms of employment are likely precarious, he said, and not necessarily what older people want to be doing. 

According to Cook, the government has landed on a “broad, complex and multidimensional” definition of poverty: a “condition of a person who is deprived of the resources, choices and power to maintain a decent standard of living and to facilitate participation and integration in society.” 

However, when the government measures poverty, it focuses solely on income. 

“The other challenge with cutoffs and thresholds is they’re rather arbitrary,” Cook said. “If we look at the data, we see that 5 per cent of seniors are below the MBM, but that ignores the fact that 12 per cent of seniors in Canada have incomes just above it. So if we combine those in poverty and those at risk of poverty, it’s actually around 17 per cent.”

Is more data enough to understand the situations that seniors are facing?

A lack of data-backed evidence can lead to holes in policymaking, and for older adults, “economic security is a key social determinant of health,” said Zannat Reza, Future of Aging leader at Saint Elizabeth Health. 

“Older adults with low incomes are less likely to be physically active, less likely to access health services, and are more likely to develop unhealthy behaviours, which results in higher healthcare costs.” 

To tackle this information gap, Maytree has recommended that the federal government develop a seniors-specific poverty measure, which can factor in the additional costs and income stressors that older adults have to deal with. However, the development of that poverty measure will have to cover the lived experiences of a broad spectrum of older adults, Griffin said. 

“This group is not exclusively middle class, but also the difficult-to-reach: migrants, minorities, low-income folks, folks with disabilities,” she said. 

“Reaching those populations and understanding their needs will be crucial to creating a more inclusive basket for seniors and making sure we’re getting a representative sample rather than a narrow one.”

This would not be the first time the MBM has been adjusted based on new context. For example, the federal government has distinguished thresholds for renters and homeowners and the different costs that each incurs, Tabbara said. 

In 2022, the government also published the Northern Market Basket Measure (MBM-N) for Yukon and the Northwest Territories, and they are planning to publish another for Nunavut. 

“You could see that they were thoughtful in what they included, especially when it comes to areas with higher Indigenous populations,” Tabbara said, pointing out that the MBM-N has more traditional foods included. 

An MBM specific to seniors also risks seeing seniors as a homogenous mass. Along with collecting information about healthcare expenses, long-term care expenses and seniors’ housing situations, Reza pointed out that “any data collected should include health inequality variables, e.g. age, sex at birth, gender, income, racialized group, education, geographic location [and] Indigenous identity.” 

Older women are a particular category to pay attention to, especially as women typically tend to outlive their male partners, and there is “profound discrimination” against solo seniors, Watts said. 

“Elderly women are often in very precarious financial situations,” Cook added.

“Often they’ve had less attachment to the labour force, so they don’t necessarily have their own CPP, or their own financial savings accumulated.” 

Watts points out that we now have better data on LGBTQ+ seniors in Canada and how those family compositions might look in comparison to the nuclear family that the MBM is based on. LGBTQ+ seniors might be estranged from biological families and have chosen families, she said. 

“They may have been impacted by AIDS, or trans communities might be facing additional costs for gender confirmation surgeries.” 

A data point that leads to direct exclusion is how we define an older adult, said Watts. In Canada, an individual over 65 is considered a senior citizen. 

“The average age of death in Canada is around 83 or 84 years old, and the average age of death for an Indigenous person is 63,” she said. 

“You could design seniors-based programming but never capture an Indigenous person if you use that number.”

For Watts, a National Seniors Strategy is as important as a Poverty or Housing Strategy, considering these gender and Indigenous identity lenses. As Canada “modernizes” its understanding of aging, “we need to make sure elected officials are asking questions to understand not just how something affects older people differently, but also how it affects older people with different lifestyles,” she said.

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