How Does Old Age Security (OAS) Pension Work?

To have a comfortable retirement, there are many financial considerations you need to plan for. Canada has a system that provides people, once they turn 65, with a monthly income to offset the costs of no longer working. The system includes the Canada Pension Plan (CPP), an individual’s savings or employer’s pension, and Old Age Security (OAS). 

Check out these tax considerations for seniors.

What Is OAS And How Do You Qualify? 

Old Age Security (OAS) 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 indiscriminately in their old age, so your employment history and current residence do not necessarily affect your eligibility. Here’s what you need to qualify for Old Age Security: 

For more information on requirements, visit the Government of Canada’s Old Age Security webpage. 

How Much Can You Recieve With OAS?

Your OAS payment amount is dependent on your income when you decide to start collecting OAS, and general living costs measured by the Consumer Price Index, as reviewed by the Government of Canada every January, April, October and December. OAS amounts are also dependent on how long you’ve lived in Canada.

Check out how an RRSP can help with retirement. 

The maximum monthly pension amount for OAS was $685.50 monthly, and the maximum income for eligibility to receive OAS is $129,757. If you make more than the indicated maximum, you will be subject to the OAS Clawback, which mandates Canadians to pay all or some of their OAS back to the government. 

Check out how your income is taxed in Canada.

What Are The OAS Payment Dates 2024?

The OAS payment schedule varies from year to year. Here are the dates on which you can expect to receive OAS and CPP this year:

For more information on payment dates for various benefits, visit the Government of Canada’s Benefits Payment page. 

Process Of Obtaining OAS

To obtain OAS payments, you need to follow these 6 steps:

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. 
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 on a year when your income is lower. 
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. 
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. 
5. Review your application status: You can either contact Service Canada or log into your My Service Canada account to review your application. 
6. Act if you disagree with the decision: You’ll need to request a decision review within 90 days of receiving your decision letter. If you are still unhappy with this subsequent review. You can appeal the decision with the Social Society Tribunal.

Do you qualify for Guaranteed Annual Income System (GAINS) Program?

Additional Reading

What To Do When You Owe Money To The CRA?

What To Do If You Over-Contribute To Your RRSP?

Why You Need Both Passive and Active Income

Old Age Security FAQs

Final Thoughts

Old Age Security is one financial support Canada has made available to people in retirement. Although it isn’t enough to live off alone, you can supplement it with your personal savings,  CPP and/or Canada’s Guaranteed Income Supplement.