Wondering about the Old Age Security (OAS) payment dates for 2021? You don’t have to wonder anymore!
Welcome to Money Reverie’s page that discusses the OAS Payments Dates for 2021!
Here we will discuss what OAS entails, eligibility, how much you may be entitled to and the application process.
In the end, you should have a better understanding of the OAS payments 2021 and what you need to do before and after the payment dates.
So are you ready to join me in this journey? Great!
Let’s go there!
What is OAS?
The Old Age Security (OAS) is a monthly payment administered by the Canada Revenue Agency to eligible retirees aged 65 and above. Like Canada Pension Plan (CPP), OAS provides a taxable benefit to retirees to help them offset the cost of living in Canada.
More so, you can receive the OAS payment alongside other benefits such as the Guaranteed Income Supplement (GIS) and allowance for the survivor.
However, your OAS payments can increase, reduce or cease based on your annual net income.
Who is Eligible for OAS?
To be eligible for the OAS payments, you must meet the following requirements:
- Reach 65 years old or older.
- Be a citizen or legal resident of Canada.
- Lived in Canada for not less than ten years after attaining the age of 18.
However, Canadian citizens or legal residents that are not currently in Canada can still receive the OAs payment but must meet the following requirements:
- Be 65 years old or older.
- Must have lived in Canada as a Canadian citizen or a legal resident.
- Have lived in Canada for not less than 20 years, beginning at the age of 18.
How Much OAS Will I Get?
From July to September 2021, you may get up to $626.49 per the OAS payments 2021.
How much you get on OAS payments 2021 depends on the years you spent in Canada after 18, your level of income and marital status.
Each January, April, July and October, the OAS payment is reviewed according to the Consumer Price Index.
So the more the cost of living increases, the more your OAS amount increases.
However, if your 2020 income exceeds $79,054, your OAS amount will reduce as you have to repay all or part of it.
However, delaying your first payment is one of the ways of maximizing your OAS amount.
But, you should bear in mind that your other benefits will be delayed once you delay your OAS pension.
When to Start Collecting the Old Age Security Payment?
Due to the implication of receiving the OAS payment when you have a high income that exceeds the OAS limit, it’s essential to plan on when to start collecting the OAS payment.
Even though you’re allowed to start receiving the OAS pension the following month after reaching 65 years, you can delay it to your advantage.
More so, you’re entitled to a higher amount per month you delay your initial payment.
By determining the best time you need the OAS payment, you will also maximize your income during your retirement days.
How long can you delay your OAS pension payment? Up to five years following the year you reached 65.
However, once you exceed the age of 70 without applying for the OAS payment, you will lose benefits.
Thus, you need to consider your personal circumstances before delaying your OAS payment. This includes your finance, health and retirement plans.
As a result, you need to ask yourself the following questions when making this decision:
- Do you plan to continue working in retirement?
- Is your spouse/common-law partner eligible for OAS pension?
- Are you entitled to any allowance?
- Do you have health-related costs?
- What are your retirement goals?
OAS Additional Payment
There are two additional payments administered on the OAS payments 2021 based on income and age criteria.
1. One-Time $500 Additional Payment
Senior Canadian citizens are entitled to a one-time $500 additional payment in August OAS payments 2021.
To qualify for this additional payment, you must meet the following requirements:
- Meet the requirements of the Old Age Security pension (in June 2021).
- Your date of birth is on or before June 30, 1947.
Thus, even if you applied for the OAS payment but are not yet approved, you will get this one-time payment if you are retroactively approved earlier or in June 2021.
2. Guaranteed Income Supplement
On the OAS payments 2021, you may also receive Guaranteed Income Supplement (GIS) alongside the OAS pension amount on the OAS payments 2021.
However, to qualify for the Guaranteed Income Supplement amount, you must meet the following requirements:
- Reach the age of 65 or above
- Live in Canada
- Be entitled to the OAS payment
- Have less than $18,984 and are widowed, divorced or single.
- Your income combined with your spouse or common-law partner income is less than $25,104 (if they are entitled to the full OAS amount), $45,504 (if they are entitled to a partial OAS amount) or $45,504 (if they’re entitled to the Allowance).
Moreover, the GIS application is processed at the same time as the OAS application.
OAS Payments Dates for 2021
OAS payment dates vary annually. The OAS 2021 payment dates are:
- January 27, 2021
- July 28, 2021
- February 24, 2021
- August 27, 2021
- March 29, 2021
- September 28, 2021
- April 28, 2021
- October 27, 2021
- May 27, 2021
- June 28, 2021
- July 28, 2021
- August 27, 2021
- September 27, 2021
- October 27, 2021
- November 26, 2021
- December 22, 2021
Depending on your choice, you can receive the OAS payments through direct bank deposit or cheque.
As mentioned previously, you may have to repay in full or in part your OAS payment if your previous year’s income exceeds the OAS limit.
This is referred to as OAS clawback or OAS recovery tax.
For example, if your income exceeds $79,054 for the 2020 tax year, you will have to repay in full or in part your OAS payments for 2021.
How much will you have to repay? 15% of the excess income up to the maximum OAS amount you received.
For instance, your net income in 2020 was $90,000, with $79,054 as the OAS limit for that year, That’s:
$90,000 – $79,054 = $10,946.
$10,946 x 0.5 = $5,473
Thus, you will be required to repay $5,474 for the payment period of 2021.
So how do you minimize your OAS clawback? To this, we now turn.
3 Practical Tips to Minimize Your OAS Clawback
Now that you know the implication of OAS clawback, it’s essential to learn how to minimize their chances.
Here are three practical tips that can help you minimize your OAS clawback and maximize your payment.
1. Split Your Income
One of the practical ways of minimizing your clawback is to split your income to your spouse or common-law partner.
How much you can split depends on your net income and retirement benefits.
It could be up 20%, 30% or even 50%. The aim is to have your income below the OAS threshold.
By investing in different securities and building your portfolio, your income is likely to meet the OAS threshold.
Also, investing in a tax-free savings account and registered retirement accounts will reduce your net income while also helping you maximize your retirement income.
Thus, even if you can’t invest in other securities, you should consider investing in TFSA and RRSP accounts while receiving the OAS payment.
3. Delay Your OAS Payment
Another smart way that you can reduce the OAS clawback is to delay your first OAS payment.
As mentioned previously, you can start collecting the OAS payment the following month you turn 65, but delaying up to 5 years can maximize your benefit.
However, you shouldn’t delay your OAS payment beyond 70 years; else you lose a great deal. This is because the more you exceed 70 years, the more your benefit reduces.
How to Apply for OAS Payments 2021
You may be contacted by the CRA about your eligibility ahead of the OAS payments 2021 or other payments.
However, if you’re not contacted, you can apply for the benefit once you meet the requirements.
But before then, you should ensure that you’re starting at the right time to avoid OAS clawback.
Once you’re convinced that it’s the right time to apply for the OAS payment, you can submit your application in either of the following ways:
You can apply for the OAS payment online by meeting the following requirements:
- Be 65 years old.
- Not currently enrolled in OAS pension.
- Not yet applied for the OAS and your application is not currently under assessment with the CRA.
- Currently reside in Canada.
- Not using an authorized third party on your account.
However, you must have a My Service Canada Account (MSCA) to apply for the OAS online. But if you don’t have one, click here to register.
Furthermore, ensure that you have all the required information before starting the registration. This is because there’s no option for pausing or saving it to continue later.
Additionally, each registration session elapses after 20 minutes of inactivity.
You can also apply for the OAS pension payment through the following process:
- Filling the Application for the OAS and the GIS (ISP-3550) form.
- Providing valid copies of the required documents
- Mailing the filled forms or submitting them in person to the nearest Service Canada office.
You can use the Reference Guide (ISP-3550A) as a guide to complete the Application for the OAS and the GIS (ISP-3550) form.
What next after submitting the OAS application? You should wait for a couple of days, and the CRA will mail you a decision letter or request more information from you.
Accordingly, the decision letter will stipulate:
- How much you are entitled to per month.
- Your first payment date.
- Your previous eligible payments.
However, you may disagree with the CRA decision. In this case, you can request a review in written form within 90 days of the day you received the decision later.
Finally, you can view your OAS application status by:
- Visiting My Service Canada Account (MSCA).
- Reaching out to Service Canada
Summary of the OAS 2021 Payments
There you have everything about the OAS payments 2021.
What have you learnt? We can summarize this post in the following points:
- OAS is a taxable benefit to Canadian seniors aged 65 and above.
- How much benefit you get depends on your age, marital status and level of income.
- You can get additional benefits such as GIS and allowance and one-time $500 benefits under the OAS payments 2021.
- Exceeding the OAS income threshold attracts 15% of the excess income.
- You can maximize your OAS payment by delaying your paying and reducing your net income.
- You can apply for the OAS online or through the mail.
But why settle for OAS alone while there are other retirement benefits you may be entitled to?
You can do better by identifying and applying for other benefits you may be entitled to, such as Canada Pension Plan (CPP), and the Goods and Services Tax (GST) or Harmonized Sales Tax (HST).
FAQs OAS Payments 2021
How Much is OAS in 2021
The OAS maximum amount in 2021 is $626.49 monthly. This is the result of the 1.3% increase of the previous $618.45 maximum amount.
How Much is Old Age Pension in Canada?
There’s no a fixed amount on the Old Age Security (OAS) pension amount. How much you get depends on your marital status, income and how long you have resided in Canada upon reaching 18 years.
For OAS payments 2021, you may receive up to $626.49 monthly.
What is the Income Limit for OAS?
The income limit for OAS refers to the maximum income you’re eligible to have to receive the OAS payment.
If you exceed the OAS income limit, you will have to repay 15% of the excess amount. $79,054 is the income limit of OAS for the 2020 tax year.
Is the OAS Taxable?
Yes. The OAS payments are taxable, so you’re expected to include the amount when filing your taxes.
Thus, you can notify the CRA to deduct taxes per your OAS monthly payments or file your income tax per quarter. To learn more, reach out to the Canada Revenue Agency (CRA) Tax Services Office.
If you have more questions about the OAS payments 2021, let me know in the comment section.