Offsetting your cost of living is one of the smart things to do as a Canadian senior.
Fortunately, Canadian seniors have different options of offsetting their cost of living during retirement.
The Old Age Security (OAS) pension is one of the federal government’s government benefits administered to Canadian seniors.
However, not every Canadian senior is eligible for the OAS, and the maximum payment amount varies annually.
So who is eligible for the OAS pension? How much will you get? When are the payment dates?
This article answers all your questions about the Old Age Security in Canada.
What is Old Age Security Pension?
The Old Age Security (OAS) pension is a federal government benefit administered monthly by the Canada Revenue Agency to seniors aged 65 and above.
This benefit is aimed to offset a percentage of Canadian seniors’ costs of living across all the provinces and territories of Canada.
In most cases, the federal government enrolls eligible seniors to the program automatically once they reach the age of 65. However, some need to apply for it.
While there’s a maximum OAS monthly payment annually, the amount varies by individual situation.
Also, the OAS payment is taxable and subject to recovery tax for seniors with more than the annual income threshold income.
That said, not all Canadian seniors are eligible for the Old Age Security payment in Canada. This begs the question: Who is eligible for the OAS pension? Let’s find out.
How Old Age Security Work in Canada
Like other benefits, Old Age Security in Canada works on an eligibility basis. Once you meet the program’s requirements, you’re qualified to receive monthly benefits toward offsetting a portfolio of your cost of living as a Canadian senior.However, not all eligible individuals receive the same benefits on OAS pension. How much you get depends on your annual income, age and how long you have lived in Canada or overseas since the age of 18.
In most cases, the federal government will enroll you in the program automatically once you meet the requirements. You will start receiving benefits the month after reaching the age of 65.
But when the government has insufficient information about you, you may need to apply for the program yourself through any of the two application processes discussed in the subsequent parts of this article.That said, it’s not compulsory to start receiving the OAS benefits months after you clock 65. You can choose to delay it to enjoy a higher amount per every delayed year. However, you must not delay your benefits beyond 70 years of age; else, you lose benefits.Unlike other government benefits, the OAS pension is taxable and subject to recovery tax if your income exceeds the annual income threshold.
Who is Eligible for an Old Age Security Pension in Canada?
While the Old Age Security pension is available to all Canadian seniors, not every senior is eligible for it due to the following requirements:
- Reach 65 years old or above
- Have a Social Insurance Number (SIN)
- Be a citizen, permanent resident, or landed immigrant of Canada.
- Lived for at least 10 years old in Canada since the age of 18.
The federal government will automatically enrol you in the program once you meet the above requirements. However, you may need to apply yourself in some cases.
Old Age Security Benefits in Canada
As mentioned previously, the OAS is administered monthly by the Canada Revenue Agency to Canadian seniors aged 65 and above.
Your first OAS payment will be administered the following month after reaching the age of 65.
However, you can delay your first payment to receive a higher OAS benefit per every delayed month.
For example, those that delayed their first payment till the age of 75 will have a 10% increase on their payment in July 2022.
On the other hand, you will receive a retroactive payment if you apply to the OAS payment while you’re already over 65. This will last up to 11 months of submitting your OAS application.
The retroactive payment doesn’t apply to the duration of delaying the OAS payment.
That said, the higher your income against the income threshold, the lower your OAS payment. The income threshold is set annually, and it’s $79,054 for 2020.
Once you exceed the income threshold, you must pay a portion or the complete OAS amount.
Moreover, the OAS payments are distributed through cheques and direct deposit to bank accounts in Canada, the US, or supported countries.
How Much Does Old Age Security Pay?
The OAS payment varies annually. The amount depends on your annual income, age and how long you have lived in Canada or overseas since the age of 18.
That said, you can receive up to $642.25 maximum monthly amount from January to March 2022. There will be a 10% increase for seniors aged 75 and above on July 2022 payment.
However, you must have less than $133,141 annual income to receive the OAS monthly payment in 2022.
The Canada Revenue Agency reviews the payment amount every January, April, July and October according to the latest Consumer Price Index (CPI).
Should You Delay Your Old Age Security Pension?
As mentioned previously, your first OAS payment will be administered the following month after reaching the age of 65. However, you can delay your payment to receive a higher amount each month you delay.
That said, the federal government allows you to delay your payment up to 5 years after reaching the age of 65. However, you will lose your benefits when you delay your payment after the age of 70.
Furthermore, you can’t get other benefits when you delay your OAS payment. This includes the Guaranteed Income Supplement (GIS) and your spouse’s application for Allowance.
So when deciding to delay your OAS payment, consider your:
- Financial situation
- Retirement plan
Old Age Security Payment Dates For 2022
The Old Age Security pension is administered monthly to eligible seniors. Below is the schedule for the 2022 payment:
- January 27, 2022
- February 24, 2022
- March 29, 2022
- April 27, 2022
- May 27, 2022
- June 28, 2022
- July 27, 2022
- August 29, 2022
- September 27, 2022
- October 27, 2022
- November 28, 2022
- December 21, 2022
The payment is administered through cheques and direct deposits. However, direct deposit is convenient and secure as you will receive your payment faster than cheques.
Visit your My Service Canada Account or call 1-800-277-9914 to set up direct deposits. If you use a foreign bank account, fill the foreign direct deposit enrolment form.
Old Age Security Application Processes
As mentioned previously, the federal government will automatically enrol you to the OAS pension once you qualify. However, you may need to apply if the CRA lacks sufficient information to enroll you automatically.
But before applying for the OAS pension, ensure you have information about your:
- Social Insurance Number (SIN)
- Where you have lived since age 18 in Canada or overseas.
- Spouse or common-law partner information (optional)
- Employment or pension income reduction (optional)
- Preferred OAS payment date
- Banking information (to set up a direct deposit)
That said, the following are the two methods of applying for the Old Age Security in Canada.
1. Apply Online
All you need is to log in to your My Service Canada Account (MSCA) to apply for the OAS pension online.
Click here to register for the My Service Canada Account (MSCA) if you don’t have one.
However, you must meet the following requirements to apply for the OAS pension online:
- Be one month after your 65 birthday
- Live in Canada currently
- Don’t be an OAS current beneficiary
- Have no OAS application
- Have no authorized third party on your account.
That said, you can ask someone to help you apply for the OAS pension through your My Service Canada Account. But the person can’t:
- Apply for benefits on your behalf
- Submit the application
- Modify your payment address
- Request or modify your withholding of tax
2. Apply By Mail
You can also apply for the OAS pension by filling the Application for the OAS and the GIS (ISP-3550), mailing or taking it to the Service Canada office together with certified true copies of the required documents.
The Reference Guide (ISP-3550A) contains all the information you need to fill your OAS application.
That said, you can also ask someone to help you apply for the OAS pension by filling the Consent to Communicate Information to an Authorized Person form (ISP-1603).
However, you have to mail or take the application to the Service Canada office yourself. But the person can’t:
- Apply for benefits on your behalf
- Submit the application
- Modify your payment address
- request or modify your withholding of tax
Old Age Security Regulations
The Old Age Security Regulations spell out the entire procedures of the OAS program as instituted by the Old Age Security Act. The current regulations were amended on November 27, 2017, and remained valid until December 13, 2021.That said, the regulations were divided into two major parts, each having subparts. The following is a highlight of the provisions of the current regulations.
- PART I – Applications: This section explains the application process of the OAS program. It covers all the working processes of the program, such as payments, supplement, suspension and cancellation of benefits.
- PART II – Reconsiderations: This section explains the processes of requesting an extension on the program. It also describes the program’s procedures of a tax court in Canada.
For in-depth information about the current Old Age Security Regulations in Canada, download the PDF version here.
Old Age Security Supplement and Other Benefits
The federal government of Canada also offers Old Age Security supplements and other benefits, namely: Guaranteed Income Supplement (GIS); Allowance; and the Allowance for the Survivor.
These non-taxable payments are based on your level of income, age and marital status.
1. Guaranteed Income Supplement (GIS)
The Guaranteed Income Supplement is available for Canadian seniors that:
- Reach 65 or older
- Currently live in Canada
- Are receiving the OAS
- Have less than $19,248 (with single, widowed or divorced marital status).
Click here to learn more about the Guaranteed Income Supplement requirements.
That said, if you are a single, widowed or divorced pensioner with less than $19,464 annual income, you will receive a $959.26 maximum monthly payment amount from January to March 2022.
Moreover, you can apply for the Guaranteed Income Supplement while applying for the Old Age Security.
You or your spouse/common-law partner may receive an Allowance if you qualify for the GIS. However, your spouse or common-law partner must:
- Be between 60-64 years of old
- Be a citizen or a legal resident of Canada
- Currently live in Canada
- Lived in Canada for at least 10 years since the age of 18.
That said, your annual income plus your spouse/common-law partner’s annual income must be less than $36,048 to qualify for January to March 2022 Allowance.
If your spouse/common-law partner receives the GIS and the full OAS pension with less than $36,048 annual income, you will receive a $1,219.68 maximum monthly payment amount from January to March 2022.
3. Allowance for the Survivor
Finally, you may also be eligible for Allowance for the Survivor if your annual income is less than $26,256. However, you must be:
- Between 60-64 years of age
- A widowed/widower without a common-law relationship.
If you are a surviving spouse or common-law partner with less than $26,256 annual income, you will receive a $1,453.93 maximum monthly payment amount from January to March 2022.
Final Thoughts on Old Age Security Pension in Canada
The Old Age Security pension is ideal for every Canadian senior looking to offset their cost of living in Canada.
While the amount may be less, it can pay off some of your bills and save your dollars monthly.
However, it’s essential to think twice before applying for the OAS pension when you clock 65.
As discussed above, you can increase your OAS income by delaying it up to 5 years. But do you have other sources of income that can sustain you through these years?
While it may be beneficial to delay the OAS payment, consider your situation before doing so.
However, consider the following benefits if you’re not eligible for the Old Age Security and supplement benefits.
FAQs on Old Age Security in Canada
How Much is Old Age Security?
The Old Age Security is a taxable benefit given to eligible Canadian seniors aged 65 years and above.
However, the payment amount varies annually, but you can receive a $642.25 maximum monthly amount from January to March 2022.
How Much Old Age Security Will I Get?
You will get up to $642.25 maximum monthly amount from January to March 2022. However, how much you get depends on how long you live in Canada or overseas after the age of 18.
How OAS Payment Rates are Calculated?
The OAS payment rates are calculated every January, April, July and October based on the latest Consumer Price Index (CPI).
When the cost of living increases, the monthly payment rate increases, however, the payment rates will not increase when the cost of living reduces.
Is OAS Taxable?
Yes. The OAS pension is a taxable benefit that must be reported on an annual income tax return. How much you pay depends on your tax bracket.
How Much is Old Age Security in Ontario?
The OAS amount is the same across all provinces and territories in Canada. The maximum monthly payment is $642.25 from January to March 2022.
Can I Collect Old Age Security in Canada and Still Work?
You can work while collecting the OAS payment. However, if your income exceeds the income threshold ($79,054 for 2020), you must repay all or part of your OAS payment.
Can You Receive CPP and OAS at the Same Time?
You can receive CPP and OAS at the same time. However, you must repay all or part of your OAS payment once your income exceeds the income threshold ($79,054 for 2020).
This is a wise decision because CPP allows you to receive a pension as early as 60, while OAS kickstarts a month after you clock 65.
Can You Be Denied OAS in Canada?
Yes, you can be denied OAS in Canada if you didn’t meet the requirements. However, you can appeal to a review tribunal if you were rejected wrongly.
Does Everyone Get OAS at 65?
Only those that meet the requirements get OAS benefits at 65. However, you can delay your OAS benefits after 65 to receive a higher amount per each delayed year.
Where Can You Get Help?
Drop your questions in the comment section or contact the Canada Revenue Agency for further clarification about the Old Age Security in Canada.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
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