How Does Old Age Security (OAS) Pension Work?

To ensure a comfortable retirement, many financial considerations need to be planned for. The federal government has a system that provides Canadians over a certain age with a monthly income to offset the costs of no longer working. The system includes Old Age Security (OAS), a monthly benefit paid out to those aged 65 and over.

Key Points

• The OAS is a monthly benefit paid out to qualifying seniors aged 65 and over.
• OAS payments are based on your income when you start collecting OAS, how long you’ve lived in Canada, and current general living costs.
• Current maximum OAS payment amounts are $727.67 for those aged 65 to 74 and $800.44 for those aged 75 and over.

What Is Old Age Security (OAS)? 

Old Age Security is a taxable, monthly payment that you can receive from the Canadian government if you are 65 years of age or older. The payment is meant to help Canadians transition into retirement, so your employment history and current residence do not necessarily affect your eligibility. Instead, the benefit is financed through federal tax revenues.

How Does OAS Work In Canada? 

The OAS program provides monthly payments to seniors aged 65 and older who are Canadian citizens or legal residents of Canada and have lived here for at least 10 years after turning 18. Recipients may be eligible for either a partial or full pension, depending on age, income, and place of residence. Higher payments are made to those aged 75 and over. 

For the most part, eligible Canadians are automatically enrolled in the OAS program if there is enough information available. If you’re automatically enrolled, Service Canada will notify you. If you’re not notified about an OAS pension the month after you turn 64 years of age, you may have to apply.

OAS Payment Amounts: How Much Can You Get?

Your OAS payment amount is dependent on the following:

• Your income when you decide to start collecting OAS
• General living costs are measured by the Consumer Price Index (CPI), as reviewed by the Government of Canada every January, April, October, and December
• How long you’ve lived in Canada

Maximum OAS pension amounts (from January to March 2025) are as follows:

Can I Defer OAS For Higher Payments?

If you want to maximize your OAS payments, you may choose to wait a few more years after you turn 65. You can defer your OAS payments up until you turn 70. For each month you delay, your monthly OAS payment increases by 0.6%. That means if you wait until you’re 70, you’ll see a 36% increase in OAS payments. 

This may be a suitable strategy if you plan to continue working past the age of 65 or expect to require higher income when you’re in retirement.

What Are The OAS Payment Dates In 2025?

The OAS payment schedule varies from year to year. Here are the dates on which you can expect to receive OAS and Canada Pension Plan (CPP) for 2025:

How Do You Qualify For OAS?

To qualify for OAS, you must meet specific requirements:

• Age 65 years or older
• Canadian citizen or permanent residence at the time of OAS application approval
• Resided in Canada for at least 10 years since the age of 18

How To Apply For OAS

To obtain OAS payments, follow these steps:

Step 1: Determine If You Need To Apply 

You’ll receive a letter in the mail from the Government of Canada letting you know that you’ll be receiving OAS payments. Make sure to contact them if you haven’t received a letter a month after your 64th birthday.

Step 2: Decide When You Want To Start Collecting OAS

You may choose to delay receiving OAS payments to receive a larger payment, or to ensure your eligibility by beginning collection in a year when your income is lower. 

Step 3: Submit An Application

You can apply online or by mail. Make sure you apply a month after your 64th birthday and ensure you have all the necessary information and documents required for your application. 

Step 4: Look Out For A Response From The Government Of Canada

The Government of Canada will send you a decision letter, or a request for more information. Your decision letter will tell you how much money you’ll collect each month, any past payments owed to you, as well as the date you’ll start collecting.

Is OAS Taxable?

Yes, OAS pension payments are considered taxable income and are therefore are subject to income tax. As such, you’ll need to report your OAS payments when you file your income tax return each year. The amount of tax you owe will depend on your total income from all sources and your tax bracket.

What Is OAS Clawback?

If you make more than the indicated maximum, you will be subject to the OAS Clawback, which mandates Canadians to pay some or all of their OAS back to the government. 

The income threshold for the clawback changes every year. For 2024, it’s $90,997. With the clawback in place, 15¢ of your OAS payments are withheld for every dollar over the threshold.

Learn more: How To Avoid The Old Age Security (OAS) Clawback

OAS Supplementary Benefits

In addition to the base OAS pension, qualifying seniors in Canada may be eligible for other benefits, such as the following:

Guaranteed Income Supplement (GIS)

The GIS provides additional financial support to low-income seniors who are 65 years and older who receive OAS. The amount you receive depends on your income level and marital status.

GIS — Allowance

This benefit supports low-income Canadians between the ages of 60 and 64 whose spouses or common-law partners receive GIS.

GIS — Allowance for the Survivor

This benefit is for widowed Canadians between the ages of 60 and 64 who earn an annual income that’s less than the maximum annual income threshold for the Allowance for the Survivor.

Learn more: GIS Payment Dates

CPP

While not considered an OAS supplementary benefit, CPP also plays a role in your retirement income. The CPP provides eligible Canadians with partial replacement of earnings during retirement. This pension is paid out monthly, and the amount you receive depends on how long and how much you’ve contributed to the plan during your working years.

Learn more: Canada Pension Plan (CPP) Payment Dates

Additional Reading

Tax Benefits and Credits For Seniors

How To Start Preparing For Retirement Success In 2025

How Does Pension Income Splitting Work?

Final Thoughts

Old Age Security is one financial support Canada has made available to retired Canadians. Although it may not be enough to live off alone, you can supplement it with your personal savings, CPP, and/or Canada’s Guaranteed Income Supplement, among other financial arrangements.

Old Age Security FAQs