How Does Old Age Security (OAS) Pension Work?

How Does Old Age Security (OAS) Pension Work?

Written by Chrissy Kapralos
Fact-checked by Caitlin Wood
Last Updated August 30, 2021

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 personal 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: 

If You’re Living in CanadaIf You’re Living Outside of CanadaIf You’re Working Outside of Canada for Canadian Employers
Age 65 years or olderAge 65 years or olderReturned to Canada within 6 months of ending employment
Canadian citizen or permanent residence at time of OAS application approvalCanadian citizen or permanent residence on the day before you left CanadaTurned 65 while employed and maintained residence in Canada while outside Canada
Resided in Canada for at least 10 years since the age of 18Resided in Canada for at least 20 years since the age of 18Provide proof of employment from the employer 

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

In January 2021, the maximum monthly pension amount for OAS was $615.37 monthly, and the maximum income for eligibility to receive OAS was $129,075. 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 2021 Payment Dates?

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:

Old Age SecurityCanada Pension Plan
January 27, 2021January 27, 2021
February 24, 2021February 24, 2021
March 29, 2021March 29, 2021
April 28, 2021April 28, 2021
May 27, 2021May 27, 2021
June 28, 2021June 28, 2021
July 28, 2021July 28, 2021
August 27, 2021August 27, 2021
September 28, 2021September 28, 2021
October 27, 2021October 27, 2021
November 26, 2021November 26, 2021
December 22, 2021December 22, 2021

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 submit an application 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

Old Age Security FAQs

Will I qualify for a higher OAS if I wait past 65?

The longer you delay your OAS payments, the larger the payments will be. You can delay your OAS by a maximum of 5 years to maximize your payments; however, there is no benefit to waiting past the age of 70, as you actually risk losing some of your benefits. 

What’s the difference between OAS and CPP?

CPP is available to Canadians who have contributed to it throughout the course of their employment, making it dependent on one’s employment history. OAS is available to most Canadians over the age of 65, regardless of their employment history. 

Is OAS taxable?

Yes, OAS is taxable. 

What is the OAS clawback?

The OAS clawback is a casual term used for the Old Age Security Pension Recovery Tax. If your annual income passes a certain threshold, you may have to pay some or all of your OAS pension back to the government. To calculate how much you might need to pay back, use this calculator. There are ways to avoid the OAS Clawback so that you can keep as much of your OAS as possible. 

IS OAS enough for retirement?

In most cases, OAS is not sufficient for retirement, especially if you live in a city with high living costs like Vancouver or Toronto. OAS is a supplement to your income, not an income in and of itself. If you’re eligible for OAS, you might consider applying for Canada’s Guaranteed Income Supplement as well. 

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 of alone, you can supplement it with your personal savings,  CPP and/or Canada’s Guaranteed Income Supplement. 


Rating of 5/5 based on 2 votes.

Chrissy is a Toronto-based communications advisor. With an English degree from the University of Toronto and editing courses under her belt from Ryerson University, she has continued her lifelong passion for writing and editing. In addition to working for Loans Canada on a variety of financial topics, Chrissy has a few years of resume writing and editing under her belt, and takes great pleasure in helping people find work that fits with their experience and passions. When she isn't working, you can find her practicing yoga, hanging out with her dog, reading up on financial and real estate news, or planning her next trip abroad.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Industry Spotlight

What's happening with Canada's credit industry?

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer — Helping Consumers Achieve Financial Freedom by Connecting Canadians Looking For Financing With Canadians Looking to Invest

goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...

Read Post
Locator
Find The Best Rate
In Your Region
OR
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.