The Old Age Security (OAS) program is a monthly pension provided by the Government of Canada to eligible seniors. It is designed to offer financial support to individuals aged 65 and older, regardless of their work history. OAS is funded through general tax revenues, so you do not need to contribute to it directly during your working years.
Key Features:
- Monthly Payments: OAS provides regular, predictable income during retirement.
- No Contribution Requirement: Unlike the Canada Pension Plan (CPP), OAS benefits are not tied to your employment or contributions.
- Income-Dependent Clawback: High-income recipients may need to repay part or all of their OAS through the OAS Recovery Tax.
Who is Eligible?
To qualify for OAS, you must:
- Be 65 years or older.
- Be a Canadian citizen or legal resident at the time of application.
- Have lived in Canada for at least 10 years after the age of 18.
Full OAS Pension:
To receive the full OAS pension, you must have lived in Canada for at least 40 years after turning 18. Partial pensions are available if you have lived in Canada for at least 10 years.
How Much Can You Receive?
The amount you receive depends on:
- How long you’ve lived in Canada.
- The maximum OAS payment set quarterly (adjusted for inflation).
As of 2025, the maximum monthly OAS payment for those aged 65–74 is approximately $691.00. For individuals aged 75 and older, the payment is higher due to a 10% increase introduced in 2022.
OAS Clawback (Recovery Tax):
- If your annual income exceeds $86,912 (2025 threshold), you may have to repay some of your OAS.
- The full repayment applies when your income reaches $142,197 (2025 threshold).
How to Apply
- Check Eligibility: Ensure you meet the residency and age requirements.
- Apply Online: Use the My Service Canada Account (MSCA) portal.
- Apply by Mail: Download the application form from the Service Canada website, fill it out, and mail it.
Additional Benefits
- Guaranteed Income Supplement (GIS): For low-income OAS recipients, GIS provides additional non-taxable income. Eligibility depends on income and marital status.
- Allowance for the Survivor: A benefit for low-income individuals aged 60–64 who are widowed and meet certain income criteria.
Deferring OAS Payments
You can choose to defer your OAS payments for up to 5 years (until age 70). For each month you defer, your payment increases by 0.6%, up to a maximum increase of 36%.
OAS vs. CPP: Key Differences
| Feature | OAS | CPP |
|---|---|---|
| Eligibility | Age 65+; residency-based | Contribution-based |
| Contribution Requirement | None | Mandatory contributions during employment |
| Maximum Payment | Approx. $691 (2025, age 65–74) | Varies based on contributions |
| Clawback/Reduction | Income-tested Recovery Tax | None |
Frequently Asked Questions
Q: Is OAS taxable?
A: Yes, OAS payments are considered taxable income.
Q: Can I receive OAS outside Canada?
A: Yes, if you’ve lived in Canada for at least 20 years after turning 18 or meet special agreements with certain countries.
Q: When should I apply?
A: Apply 6 months before you turn 65. If deferring, you must indicate this on your application.
Tips for Maximizing OAS
- Minimize Income Clawbacks: Consider strategies like income-splitting or deferring RRSP withdrawals to stay below the clawback threshold.
- Combine with Other Benefits: Pair OAS with CPP and private savings for a comprehensive retirement plan.
- Defer Payments: If you can afford it, deferring payments can significantly increase your lifetime OAS benefits.
