What is the Old Age Security (OAS) Program?

The Old Age Security (OAS) pension is a vital component of retirement income for seniors in Canada, alongside other sources. Its primary purpose is to provide financial support to seniors during their retirement years.

The OAS pension is a monthly benefit available to individuals aged 65 and above. Additionally, for seniors with income below a certain threshold, the OAS may also include the Guaranteed Income Supplement (GIS).

It is crucial to have a clear understanding of the amount you will receive from OAS as part of your overall retirement income, along with the Canada Pension Plan (CPP) for Old Age Security. This knowledge ensures confidence in your financial stability during retirement.

Similar to the CPP, OAS payments are made on a monthly basis, for old age security directly deposited into recipients’ bank accounts on specific dates.

Unlike the CPP, you do not need to contribute to the OAS pension during your working years to qualify for its benefits.

Who is Eligible for OAS?

To be eligible for OAS, you must meet certain criteria. Firstly, you need to be at least 65 years old and a resident of Canada when your application is approved. Additionally, you must have resided in Canada for at least 10 years.

In the case of OAS recipients living abroad, they may still qualify if they meet the age requirement and were Canadian citizens or legal residents before leaving the country. Moreover for Old Age Security, they should have lived in Canada for a minimum of 20 years since the age of 18.

If you do not meet the standard eligibility requirements, there is still a possibility of qualifying for OAS if you resided in a country that has a social security agreement with Canada and made contributions to that country’s social security system.

How is Old Age Security (OAS) Calculated?

The calculation of your OAS pension amount depends on various factors. If you have resided in Canada for a minimum of 40 years after turning 18, you will receive the full OAS pension amount.

However, if your residency in Canada as an adult is less than 40 years, you will receive a partial benefit based on the number of years you have lived in the country. For instance, if you have resided in Canada for 30 years after the age of 18, you will receive 30/40th of the maximum benefit. This partial benefit is equivalent to $481.87 (i.e., $642.25 x 75%).

Furthermore, you have the option to increase your OAS pension amount by deferring your first payment beyond the age of 65. The OAS pension can be deferred for up to 5 years until the age of 70. By delaying your pension, your monthly payment increases by 0.60% for each month of deferral, resulting in a maximum increase of 36% by the age of 70.

How Much is OAS in 2023?

The maximum monthly OAS payment in 2024 is $642.25 (amount to be updated).

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 will increase in the January to March 2024 quarter to reflect an increase in the Consumer Price Index (CPI).

What is the OAS payment dates for 2024?

Your OAS pension benefit will be paid into your bank account on these dates in 2024:

January 27, 2024 February 24, 2024 March 29, 2024 April 27, 2024 May 26, 2024 June 28, 2024 July 27, 2024 August 29, 2024 September 27, 2024 October 27, 2024 November 28, 2024 December 21, 2024.

If you haven’t yet set up direct deposit and currently receive your benefits by cheque for Old Age Security, it may arrive on or after these dates.

Note that the Federal government is transitioning from cheques to direct deposit for all payments and benefits.

You can set up direct deposit to a Canadian bank account by calling 1-800-277-9914 or online through your My Service Canada Account.

For foreign banks, please complete the foreign direct deposit enrollment form.

Also read: Demystifying Part XIII Income Tax

How to Apply for OAS?

Service Canada will either automatically enroll you for OAS or send you a letter requesting you to apply for Old Age Security.

If you haven’t received any notification of enrollment after turning 64, you can apply online through your My Service Canada Account or complete the paper application (Form ISP-3550) and mail it to the nearest Service Canada Centre.

If you have any questions regarding your OAS benefit, you can contact Service Canada at 1-800-277-9914 or TTY at 1-800-255-4786.

Why May You Have to Apply?

In some cases, Service Canada will be able to enroll you for the OAS pension automatically. However, there are situations where you will need to apply for the Old Age Security pension. Service Canada will inform you if you have been automatically enrolled.

In most situations, you do not need to apply to receive this benefit.

The amount of tax you owe on your OAS pension depends on your income tax bracket.

To avoid any surprises at tax time, you have the option to request the Canada Revenue Agency (CRA) to withhold taxes from your OAS payments. This can be done either on a monthly basis or quarterly, ensuring that income tax is deducted automatically.

Old Age Security Supplement

Seniors with lower incomes may be eligible for the Guaranteed Income Supplement (GIS), which provides a tax-free monthly benefit to help cover their day-to-day expenses for Old Age Security.

The maximum monthly amount for GIS in 2022 is $959.26. The actual payments vary depending on marital status and income.

For seniors aged 60 to 64 who are married or in a common-law partnership with a GIS recipient, there is an additional benefit called the Allowance.

The maximum Allowance amount in 2023 is $1,219.68.

Furthermore, if you are a low-income senior between the ages of 60 and 64 and your spouse or partner has passed away, you may qualify for the Allowance for the Survivor benefit.

The maximum Allowance for the Survivor amount in 2023 is $1,453.93.

Also read: Be Prepared for Survivor Benefits from OAS and CPP

How much is the Old Age Pension in Canada?

The maximum OAS payment amount in 2023 is $642.25. If you choose to defer receiving OAS past the age of 65, your OAS benefit increases by 0.60% for each month of deferral, allowing for a maximum increase of up to 36%.

On which dates are Canada pensions paid?

Both CPP and OAS payments are made on the same set dates each month, and they are directly deposited into your bank account for Old Age Security.