The Old Age Security (OAS) pension is one of three main retirement income sources for seniors in Canada. It is designed to help seniors meet their income needs in retirement.
OAS is a monthly benefit available to anyone age 65 or older.
If you happen to be a senior whose income is below a certain amount, the OAS will also include the Guaranteed Income Supplement (GIS).
As part of your retirement income with the Canada Pension Plan (CPP), it’s important to understand how much OAS you’ll receive so you can be confident you’ll have enough retirement income.
Like the Canada Pension Plan (CPP), OAS is paid out to eligible recipients once every month, with direct deposits hitting your bank account on specific dates.
Unlike the CPP, you don’t need to make any contributions during your working years to qualify for the OAS pension.
To qualify for the OAS, you must be at least 65 years of age and resident in Canada at the time when your application is approved. You must also have lived in Canada for at least 10 years.
OAS recipients who currently live abroad may qualify if they meet the age requirement and were citizens or legal residents before leaving Canada.
They must also have lived in Canada for at least 20 years since the age of 18.
If you don’t meet these requirements, you may still qualify for OAS if you lived in a country that has a social security agreement with Canada and made contributions to that country’s social security system.
You receive the full OAS pension amount if you have lived in Canada for at least 40 years since turning 18.
If you have lived in Canada for less than 40 years as an adult, you get a partial benefit based on how long you have resided in Canada.
For example, if you lived in Canada for 30 years after age 18, you get 30/40th of the maximum benefit which is equivalent to $481.87 (i.e. $642.25 x 75%).
You can increase the OAS pension amount you qualify for by delaying your first payment past age 65.
OAS pension can be deferred for up to 5 years until age 70. For every month you delay, your pension payment increases by 0.60% for a maximum increase of 36% by age 70.
The maximum monthly OAS payment in 2024 is $778.45.
This amount is revised every quarter in January, April, July, and October to account for increases in the cost of living.
For example, the OAS amount increased in the January to March 2024 quarter to reflect an increase in the Consumer Price Index (CPI).
Your OAS pension benefit is paid into your bank account on these dates in 2024:
If you haven’t yet set up a direct deposit and currently get your benefits by cheque, it may arrive on or after these dates.
Note that the Federal government is switching from cheques to direct deposit for all payments and benefits.
You can set up direct payments to a bank in Canada by calling 1-800-277-9914 or online through your My Service Canada Account.
For foreign banks, complete the foreign direct deposit enrolment form
Service Canada may automatically enroll you for OAS or send you a letter asking you to apply.
If you haven’t received notification that you are enrolled after turning 64, you can apply online through My Service Canada Account or complete the paper application (Form ISP-3550) and mail it to the nearest Service Canada Centre.
For questions about your OAS benefit, contact Service Canada at 1-800-277-9914 or TTY at 1-800-255-4786.
In some cases, Service Canada will be able to automatically enroll you for the OAS pension. In other cases, you will have to apply for the Old Age Security pension. Service Canada will inform you if you have been automatically enrolled.
In most cases, you do not have to apply to get this benefit.
OAS pension benefits are taxable, and you should report them on your annual income tax return.
The tax you pay depends on your income tax bracket.
You can ask the CRA to withhold taxes at the source every month or pay quarterly. You can have income tax automatically deducted from your OAS payments to help eliminate big surprises at tax time.
Lower-income seniors may also qualify for the Guaranteed Income Supplement (GIS). This tax-free monthly benefit increases their income so they can afford day-to-day living expenses.
The maximum monthly GIS amount in 2024 is $1,057.01 and GIS payments vary based on your marital status and income.
Seniors ages 60-64 years who are married (or common-law partners) to a GIS recipient may qualify for the Allowance benefit.
The maximum Allowance amount in 2024 is $1,292.61.
Lastly, if you are a low-income senior between ages 60 and 64 and your partner or spouse has died, you may qualify for the Allowance for the Survivor benefit.
The maximum Allowance for the Survivor amount in 2024 is $$1,524.70.
You can receive your first payment the month after you turn 65.
OAS pension payments are usually paid to your bank account in the last week of each month, except for December. OAS cheques are sent out a bit earlier so you receive them around the same time.
GIS payments are deposited in your bank account in the last week of each month. The GIS payment dates for 2022 are:
The maximum OAS payment amount in 2022 is $642.25. If you defer OAS past age 65, your OAS benefit increases by 0.60% each month, for a maximum increase of up to 36%.
Both CPP and OAS are paid on the same dates each month to your bank account via direct deposit.
The OAS payment amount is increasing in 2022.
Seniors who are 75 years and older in July 2022 will see a permanent increase of 10% to their Old Age Security pension.
There was also a 1.1% increase in the monthly OAS pension based on quarterly indexation to the CPI (for January-March).
Professional accountants at Filing Taxes can help you
If you have more concerns about the Old Age Security Program don’t hesitate to contact the Filing Taxes team of professional accountants today at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.