New Federal Budget Makes Structured Settlements Even More Attractive for Seniors

April 27, 2021

Among other things, last week’s federal budget proposed legislation to boost Old Age Security (OAS) payments for seniors aged 75 and older by 10 percent, annually, beginning July, 2022. This is in addition to a one-time payment of $500.00 this August. This increases the benefit of structured settlements for senior plaintiffs who rely on their OAS payments to continue to fund their ongoing expenses.

The rationale for this increase as described in the budget is that “[M]any seniors are living longer and relying on monthly benefits to afford retirement … they deserve a secure and dignified retirement. That is why the government is committed to increasing Old Age Security (OAS) benefits for seniors age 75 and older.”

This signals a recognition by the federal government of the fact that seniors are living longer, but with increased needs, and speaks to the value of reliable, guaranteed, long-term security.  This is exactly what a structured settlement offers.

The OAS and the Guaranteed Income Supplement (GIS) (the second of which is available only to low income seniors) are both income tested benefits. That means any other visible income could cause these valuable benefits to be reduced.

This means the investment of any personal injury settlement funds should be very carefully considered.

Many times, structured settlements are overlooked for seniors when, in cases where a personal injury plaintiff is in receipt of OAS, the structured settlement should always be front of mind.

Any income earned from investing personal injury funds outside of a structure could result in OAS payments being clawed back, either in part or entirely. If, like one third of all seniors, your client  is receiving GIS payments, any visible income earned from a personal injury settlement would reduce their GIS payments by 50% or more!

A structured settlement, on the other hand, will preserve OAS and GIS payments in their entirety. Guaranteed tax-free payments that do NOT affect valuable seniors’ benefits AND can often continue, tax-free, to a loved one on death, make a structured settlement, hands down, the best investment for your senior clients.

If you haven’t before, it’s time to talk about structured settlements for seniors.



Nathan is an Associate at McKellar Structured Settlements. Nathan’s big picture thinking and mathematical proficiency play an important role in his daily tasks that ultimately help to further McKellar’s reputation for being the best in the business. To learn more about Nathan, check out his bio here , or contact him directly here.