Understanding Old Age Security (OAS)

Old Age Security (OAS) is a pension program funded by the Government of Canada. It provides a base level of retirement income to Canadian seniors who meet the eligibility requirements. The OAS pension is a taxable monthly payment for seniors 65 and older. Unlike the Canada Pension Plan (CPP), Old Age Security benefits are not tied to your employment history. You may be eligible to receive the OAS pension even if you have never worked or are still employed.

To be eligible for the OAS pension, you must meet the following criteria:

• You must be 65 years of age or older.
• When applying for the OAS pension, you must be a Canadian citizen or a legal resident.
• You must have resided in Canada for at least ten years after age 18.

The amount of OAS pension you receive depends on how long you have lived in Canada after age 18. In 2023, the maximum monthly OAS pension amount is $626.49. This amount may be reduced if your income is above a certain threshold.

In addition to the OAS pension, you may be eligible for the Guaranteed Income Supplement (GIS) if your income is below a certain threshold. The GIS is a monthly non-taxable benefit that provides additional income to seniors with little or no other income. You can apply for the GIS simultaneously as you apply for the OAS pension.

Overall, the OAS program is an important source of retirement income for Canadian seniors. If you are approaching retirement age, it is important to understand the eligibility requirements and how the program works to ensure you receive the benefits you are entitled to.

Eligibility Criteria for OAS in 2023

Applicants must meet certain eligibility criteria to be eligible for Old Age Security (OAS) pension in Canada. These criteria include age, residency, and legal status requirements.

Age Requirement

Applicants must be 65 to receive the full OAS pension in 2023. The age requirement for OAS has gradually increased from 65 to 67 years old since 2013. If an applicant is between 60 and 64, they may be eligible for the OAS pension with a reduced payment amount.

Residency Requirement

To be eligible for OAS, applicants must have been a Canadian resident for at least ten years after turning 18. Applicants who have lived outside of Canada for an extended period may still be eligible for OAS if they meet certain requirements. For example, if an applicant has worked abroad, they may be able to count that time towards their residency requirement.

Legal Status Requirement

To be eligible for OAS, applicants must have legal status in Canada. This means they must be a Canadian citizen, a permanent resident, or a protected person. Canada’s temporary visa or work permit applicants are not eligible for OAS.

In summary, to be eligible for an Old Age Security pension in Canada in 2023, applicants must be at least 65 years old, have been a Canadian resident for at least ten years after turning 18, and have legal status in Canada.

OAS Amounts in 2023

As of 2023, the Old Age Security (OAS) pension is a monthly payment available to Canadians at least 65 years of age who have lived in Canada for at least ten years since turning 18. The amount of OAS pension you receive depends on several factors, including your income, residency status, and marital status.

Basic OAS Pension

The maximum monthly payment for the basic OAS pension in 2023 is $626.49. However, this amount is reduced if your income exceeds a certain threshold. For example, if your income exceeds $129,075, you will not be eligible for the basic OAS pension.

Guaranteed Income Supplement

The Guaranteed Income Supplement (GIS) is a monthly payment to low-income seniors receiving the OAS pension. The maximum monthly GIS payment in 2023 is $919.12 for single seniors and $1,189.29 for couples.

Allowances

The Allowance is a monthly payment available to low-income spouses or common-law partners of OAS pensioners between 60 and 64 years of age. The maximum monthly Allowance payment in 2023 is $524.23 for single seniors and $1,045.45 for couples.

In summary, the OAS pension, GIS, and Allowances are important sources of income for many Canadian seniors. The amount of each payment depends on various factors, including income, residency status, and marital status. If you are nearing retirement age, it is important to familiarize yourself with these programs to ensure you receive the maximum benefits.

Application Process for OAS

To apply for the Old Age Security (OAS) pension, you must determine if you need to apply. Service Canada will inform you if you have been automatically enrolled. If you receive a letter from Service Canada asking you to apply, or if the information in the letter they sent you is incorrect, you will need to apply for the OAS pension.

The application process for OAS is straightforward. You can apply online, by mail, or in person. Before you start your application, you must gather some information and documents, including your Social Insurance Number (SIN), date of birth, and banking information.

If you apply online, you must have a My Service Canada Account. You can create one on the Service Canada website. Once you have your account, you can log in and start your application.

If you prefer to apply by mail or in person, you must download and complete the application form from the Service Canada website. You can mail it to the address on the form or bring it to your nearest Service Canada office.

After you submit your application, Service Canada will review it to ensure all the information is complete and accurate. They may contact you if they need additional information or documents. Once your application is approved, you will start receiving your OAS pension.

You can apply for OAS up to 11 months before you turn 65, but your pension will not start until you turn 65. If you apply after you turn 65, your pension may be backdated for up to 11 months, but you will not receive any retroactive payments beyond that.

Impact of Income on OAS Benefits

Old Age Security (OAS) benefits are available to seniors 65 and older who meet the eligibility requirements. However, the amount of OAS benefits you receive depends on your income.

Income Threshold

The maximum income threshold for Old Age Security benefits 2023 is $129,075. If your income exceeds this amount, your OAS benefits will be reduced. Fifteen cents will reduce your OAS benefits for every dollar of income above the threshold. You may not receive any OAS benefits if your income is high enough.

Recovery Tax

If your income exceeds the maximum threshold by a significant amount, you may have to pay back some or all of your OAS benefits through a recovery tax. The recovery tax is equal to 15% of the amount by which your income exceeds the threshold.

For example, if your income is $150,000 in 2023, your OAS benefits will be reduced by $3,862.50 ($21,150 – $12,075 x 0.15), and you will have to pay back an additional $3,862.50 in recovery tax. This means that your net OAS benefits will be zero.

It’s important to note that the recovery tax only applies to OAS benefits, not other government benefits such as the Canada Pension Plan (CPP) or the Guaranteed Income Supplement (GIS).

In conclusion, understanding the impact of income on OAS benefits is crucial for seniors planning their retirement income. By managing their income and staying within the maximum threshold, seniors can maximize their OAS benefits and avoid paying back any benefits through the recovery tax.

Deferring OAS Pension

If you defer your Old Age Security (OAS) pension, you can receive a higher monthly payment later. You can defer your OAS pension for up to 60 months (5 years) after you turn 65.

The longer you defer your OAS pension, the larger your monthly payment will be. However, it would be best if you kept in mind that there is no advantage in delaying your first payment after you turn 70. You risk losing benefits if you delay your first payment beyond age 70.

Here is a table that shows the increase in monthly OAS payments if you defer your pension:

Deferral Period	Increase in Monthly Payment
One year	7.2%
Two years	14.4%
Three years	21.6%
Four years	28.8%
Five years	36%

Remember that deferring your OAS pension may not be the best option for everyone. If you need the money immediately, it may be better to start receiving your OAS payments immediately.

Also, if you have a shorter life expectancy or if you have other sources of retirement income, deferring your OAS pension may not make financial sense. You should consult with a financial advisor to determine the best course of action for your specific situation.

OAS and Other Benefits

Old Age Security (OAS) is a federal government program designed to provide a basic income to Canadians who are 65 or older and meet certain eligibility requirements. In addition to OAS, other benefits are available to seniors in Canada.

Integration with Canada Pension Plan

The Canada Pension Plan (CPP) is another federal government program that provides retirement, disability, and survivor benefits to eligible Canadians. OAS and CPP benefits are not the same but are integrated in some ways.

If you receive CPP benefits, you will also receive OAS payments if you meet the eligibility requirements. Your CPP payments may affect the amount of OAS you receive, but you will not lose your OAS due to your CPP benefits.

Effect on Provincial Benefits

In addition to OAS and CPP, other benefits may be available to seniors at the provincial level. These benefits vary by province and may include prescription drug coverage, home care services, and property tax credits.

Receiving OAS may affect your eligibility for some provincial benefits. For example, some provinces have income-based programs that assist low-income seniors. If you receive OAS, your income may be higher, and you may not be eligible for these programs.

It is important to check with your provincial government to see what benefits are available and how they may be affected by your OAS payments.

Also Read: Benefits for Senior Immigrants in Canada

Frequently Asked Questions

What is the Old Age Security Supplement?

The Old Age Security Supplement is an additional benefit that provides financial assistance to low-income seniors. It is designed to help seniors with little or no income besides the Old Age Security pension. The supplement is calculated based on your income and can be up to $601.45 monthly as of July 2023.

How much will I receive from Old Age Security in 2023?

The maximum monthly Old Age Security pension you can receive in 2023 is $627.50. You may receive less if your income is above a certain threshold. The exact amount you will receive depends on several factors, including your income, residency status, and years of residency in Canada.

At what age can I start collecting Old Age Security?

You can start collecting Old Age Security when you reach the age of 65. You do not need to have worked to be eligible for the pension. If you are a Canadian citizen or a legal resident of Canada, you may be eligible for the pension regardless of your employment history.

What is the income threshold for receiving Old Age Security in 2023?

The income threshold for receiving Old Age Security in 2023 is $129,075. Your Old Age Security pension will be reduced if your income is above this threshold. The reduction is calculated based on your income and the amount of your pension. You may not be eligible for the Old Age Security pension if your income is above a certain level.

Will there be any changes to Old Age Security eligibility in 2023?

As of July 2023, no changes to Old Age Security eligibility have been announced. However, eligibility requirements and benefit amounts may change, so it is important to stay informed about any updates or changes to the program.

How do I apply for Old Age Security?

You can apply for Old Age Security online through the Government of Canada website or by calling Service Canada. To apply, you must provide personal information, such as your Social Insurance Number, date of birth, and address. You may also need to provide additional information, such as your income and residency status.