Canada Old Age Pension
Updated on February 17, 2025
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Table of Contents
What is the Old Age Security pension in Canada?
The Old Age Security or OAS is a government pension for Canadian seniors aged 65 and older. The payment is given on a monthly basis to most Canadians, so it’s an integral piece of the country’s social safety net.
It’s all about lending a helping hand to seniors and providing a steady income source to make retirement more comfortable. The OAS pension is bankrolled by the general taxes we all pay as Canadians.
Am I eligible for the OAS Pension?
Here’s a handy bullet-point guide to help you out with the eligibility criteria for an OAS pension:
- Age: First things first, you need to be 65 years of age or older.
- Residency: You must have lived in Canada for at least 10 years after age 18.
- Legal status: You need to be a Canadian citizen or a legal resident when your OAS pension application is approved.
- Current residence: Unless you meet certain exceptions, you need to be residing in Canada when you receive approval for your OAS pension application.
What if I’ve been living outside Canada?
Don’t worry! You can still claim the OAS pension if you lived in Canada for at least 20 years after turning 18. Plus, Canada has social security agreements with many countries that could work in your favor.
You can receive your OAS abroad but keep in mind that payments may be affected by tax treaties with your country of residence.
The rules can seem a bit tricky, but feel free to contact official resources or a professional advisor to ensure you understand the OAS pension eligibility criteria.
Is OAS automatically given, or do I need to apply?
It depends. Some people are automatically enrolled, while others need to apply for OAS. Generally, Service Canada will send you a notification letter if you are automatically enrolled, then, you just need to wait until you’re 65 to receive your payment.
If you didn’t receive an enrollment letter, you can manually apply to Service Canada to receive the pension.
How do I apply for the OAS pension?
Here’s a simplified version of the application process for the OAS pension to guide you:
- Fill out an application form which you can find on the Service Canada website. Alternatively, you can visit a Service Canada center in person for the application.
- Gather the necessary documents to confirm your eligibility. Common documents are a birth certificate or passport for your proof of age, then a citizenship certificate or permanent resident card for your legal status and residency.
Double-check the official government website for the most up-to-date list of requirements. Also, never underestimate the power of a well-organized file; keep a copy of all your documents and the applications you send.
Need help regarding your Canada Old Age Pension? Contact us.
When should I apply for the OAS pension?
Ideally, you should apply for your OAS pension during the six months before you turn 65. If you’ve missed that window, don’t stress; you can apply after turning 65, but remember that payments can only be backdated for a maximum of 11 months.
How much can I receive for the OAS pension?
The amount you receive will actually depend on several factors. First, the length of your residency in Canada after the age of 18 is a significant factor. Those who have lived in Canada for at least 40 years after turning 18 will generally receive the full pension.
The maximum monthly OAS pension amount is reviewed quarterly and can change based on the cost of living in Canada as measured by the Consumer Price Index, so it’s important to check the most recent figures.
For those with less than 40 years of residency, you should have resided in Canada for at least 10 years to receive a partial pension which will be based on the number of years you’ve resided in the country.
What is the OAS pension amount for 2025?
Here’s a table of the maximum OAS amount for the 1st quarter of 2025:
|
Age |
Amount |
Annual net world income in 2024 |
|
65 to 74 |
CAD$727.67 |
Less than CAD$148,451 |
|
75 and over |
CAD$800.44 |
Less than CAD$154,196 |
What is the OAS Pension payment schedule?
Typically, they hit your account during the last three business days of each month. However, for those who prefer a smoother, worry-free process, opting for direct deposit is an excellent choice. It ensures the payments land straight into your bank account, saving you from the fuss of lost checks or postal delays.
You also have the choice to receive your pension as a single lump-sum payment at the beginning of each month or four weekly payments.
Can I defer my OAS pension payments?
Yes, there is a greater benefit in deferring your payments if you can. Because if you decide to defer, you can beef up your monthly pension amount by up to 36%.
However, you will allow yourself to have no payments coming in right away. You miss out on the assured income the OAS pension offers during the deferral period, which can be a crucial factor, especially if you have no other source of income during this time.
So, how exactly does deferral inflate your monthly benefit amount? Well, each month you defer your OAS pension after you’re eligible, your monthly payment swells by 0.6%. That means if you’re patient enough to defer for 5 years (that’s the maximum deferral period), your OAS pension payment could see a hearty 36% hike.
Are OAS payments taxable?
Yes, OAS benefits are subject to taxation in Canada, so they must be reported on your Canadian tax return. However, you can request voluntary tax withholding from your OAS payments to reduce the amount owed at tax time.
Be ready to receive a T4A (OAS) slip from Service Canada each year, showing your total OAS benefits.
Can I receive OAS pensions with other retirement benefits?
Here is how OAS pensions work with other financial assistance mediums:
- Guaranteed Income Supplement (GIS): This is specifically designed for low-income seniors. It’s an additional benefit you receive on top of your OAS pension if your income falls below a certain level.
- Allowance: For low-income individuals aged 60 to 64 who are not yet eligible for OAS. They are the spouses or common-law partners of GIS recipients.
- Allowance for the Survivor: Also for people aged 60 to 64 who have lost their spouse or common-law partner, providing additional financial support during this challenging transition period. Once they turn 65, the allowance stops and the OAS pension begins.
What is the OAS Clawback?
Officially known as the OAS pension recovery tax, it kicks in when your annual income exceeds a certain threshold. In short, this is for high-income seniors.
If a senior citizen’s annual income exceeds a certain threshold, they will have to repay part or sometimes all of their OAS pension. It’s progressive, which means that the more their income exceeds the threshold, the more their OAS pension is clawed back until it reaches 100% at a maximum income level.
Can I minimize the OAS clawback?
Yes, when it comes to minimizing the OAS clawback, there are a few strategies you could consider:
- Income Splitting: This involves transferring a portion of income from the higher-earning spouse to the lower-earning spouse. This could lower the higher-income spouse’s net income, reducing the amount of OAS clawed back.
- Deferring OAS or CPP: You could defer your OAS pension, which might allow you to balance your income more effectively across your retirement years. This way, you could keep your annual income below the clawback threshold.
- Managing RRIF Withdrawals: By controlling how much you withdraw from your Registered Retirement Income Fund (RRIF) each year, you could also manage your annual net income to avoid crossing the clawback threshold.
Is my OAS taxable if I live abroad?
Yes, if you’re a non-resident receiving OAS, your pension is subject to a 25% withholding tax. However, this rate could be lower if there’s a tax treaty between Canada and your country of residence. Double-checking the current tax treaty is always a good idea, as this can significantly impact your net pension.
Do I still have to worry about the OAS clawback if I live abroad?
Yes, you are still subject to the OAS clawback even if you’re abroad. This time, you have to check your worldwide income not reaching the income threshold in order to avoid it.
How do I update my information with Service Canada while living abroad?
You can update your information through your My Service Canada Account (MSCA) or you can also call the OAS International Service at 1-800-277-9914 (or +1-613-957-1954 from outside Canada).
Keeping your personal information up-to-date is crucial to ensuring a smooth OAS pension experience. If there are changes in your life, like moving house, getting married, or changing your banking information, you should report them to Service Canada as soon as possible.
