The Old Age Security (OAS) pension is a Canadian government program providing monthly payments to eligible seniors. It is designed to support individuals in their retirement years, and payment amounts are regularly reviewed to keep pace with inflation.
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Table of Contents
How Much Could You Receive?
The amount you receive depends on your age, income, and years of residency in Canada. For the January to March 2025 period:
- Ages 65 to 74: Maximum monthly payment of $727.67 if your annual net world income (2024) is less than $148,451.
- Ages 75 and over: Maximum monthly payment of $800.44 if your annual net world income (2024) is less than $154,196.
Payments are reviewed quarterly to reflect changes in the cost of living, as measured by the Consumer Price Index. Importantly, your payment will never decrease even if the cost of living declines.
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Increased OAS Pension at Age 75
Seniors aged 75 and over benefit from a 10% automatic increase in their OAS payments. If you turned 75 after July 1, 2022, this increase takes effect the month after your 75th birthday. Note that this boost does not affect your Guaranteed Income Supplement (GIS) calculation.
Your OAS Payments
If your income exceeds $90,997 (2024), you may need to repay part or all of your OAS pension through the pension recovery tax. Payments can be made via direct deposit or cheque, with direct deposits available in Canada, the United States, and certain other countries.
Retroactive Payments
If you apply after turning 65, retroactive payments may be available for up to 11 months prior to your application date. However, retroactive payments are not available during deferral periods if you delay receiving OAS.
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Additional Benefits
You may qualify for extra payments based on your income, including:
- Guaranteed Income Supplement (GIS)
- Allowance
- Allowance for the Survivor
Should You Delay Collecting OAS?
While you can start receiving OAS the month after you turn 65, delaying your first payment can increase your monthly pension amount. For each month you delay, your payment will rise, up to a maximum deferral of 60 months (5 years).
After age 70, delaying no longer offers any advantages, and you risk losing benefits if you haven’t applied. If you’re eligible for GIS, delaying OAS does not provide additional benefits.
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Factors to Consider
When deciding when to start collecting OAS, consider:
- Health: Your life expectancy and current health condition.
- Financial Situation: Your income needs and financial resources.
- Retirement Plans: Whether you plan to continue working.
- Spousal Benefits: Your spouse’s eligibility for the Allowance or GIS.
Working While Receiving OAS
If you continue working and your income exceeds $90,997 (2024), part of your OAS payment may be clawed back. Delaying OAS can help retain more of your pension.
Impact on Other Benefits
If you delay receiving OAS, you cannot:
- Receive GIS.
- Allow your spouse to apply for the Allowance.
These benefits do not increase when you delay your OAS pension.
Applying to Delay Your First Payment
If you receive a letter about OAS eligibility and wish to delay payments, you can:
- Sign in to your My Service Canada Account and follow the instructions.
- Complete and return the enrollment letter by mail.
Examples of Delaying OAS
- Delaying 1 Year: Receive a higher monthly payment than starting at age 65.
- Delaying 5 Years: Maximize your monthly pension amount.
- Starting Earlier Than Planned: Apply retroactively if circumstances change.
Partial OAS for Less Than 40 Years of Residency
If you’ve lived in Canada for fewer than 40 years after age 18, you may qualify for a partial OAS pension. To be eligible, you must have lived in Canada for at least 10 years. Your payment is proportional to the number of years you resided in Canada, calculated as:
You can still delay receiving partial OAS to increase the monthly amount.
Final Thoughts
Maximizing your OAS benefits requires careful consideration of your circumstances, including health, income, and retirement plans. By understanding your options and planning strategically, you can make the most of this essential retirement program.
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