What is Old Age Security?

Old Age Security (OAS) is Canada’s largest pension program that gives eligible residents and citizens a taxable monthly payment once they reach the age of 65. The government’s general tax revenues fund it so you don’t have to pay into it directly. Unlike the Canada Pension Plan (CPP) and employee pension plans, OAS benefits are not connected to your employment history so you can still receive them even if you’re still working or have never been employed.

  • Jump to Payment Dates
  • Jump to OAS Clawback
  • Who is eligible for OAS?

    You need to be aged 65 or older to qualify for the OAS pension. There are also other eligibility requirements depending on where you live.

    If you’re living in Canada, you must:

    • be a Canadian citizen or legal resident when your OAS application is approved
    • have resided in Canada for at least ten years since the age of 18

    If you’re living outside of Canada, you must have:

    • been a Canadian citizen or legal resident when you left Canada
    • resided in Canada for at least 20 years since the age of 18

    If you don’t fit into either of these scenarios, it’s still possible to obtain an OAS pension, a pension from another country, or pensions from both Canada and the other country as long as you:

    • resided in a country where Canada has a social security agreement, or 
    • contributed to a social security system in a country where Canada has a social security agreement

    Canadians working outside the country for Canadian employers (i.e. military and banks) may have their time aboard counted as residence in Canada. To qualify for this, you must have turned the age of 65 while still employed or returned to Canada within six months of ending employment.

    How much can I get from OAS in 2020?

    From April to June 2020, the maximum monthly payment you can receive from OAS is $613.53. This amount is adjusted quarterly in January, April, July, and October based on changes to the Consumer Price Index.

    How is the OAS pension calculated? 

    OAS pension amounts are determined by how long you’ve lived in Canada after turning 18. You’re entitled to a full pension if you’ve lived in Canada for at least 40 years. If you haven’t, you can still get a partial OAS pension which is 1/40th of the full OAS pension for every year you’ve resided in Canada since age 18. Let’s say you lived in Canada for 30 years since you were 18. In this case, you may qualify for 30/40ths or 75% of the full OAS pension. Once approved, partial pension amounts don’t increase with extra years of residence in Canada.

    You can also defer your OAS pension for up to five years in exchange for larger monthly payments later. If you choose this option, your monthly pension payment will increase by 0.6% every month you delay receiving OAS, up to a maximum of 36% at age 70. Keep in mind you won’t be eligible for other OAS benefits like the Guaranteed Income Supplement and Allowance during the pension deferral period.

    How do I apply for OAS?

    Service Canada will automatically enroll you for OAS if you’re eligible. You can expect a notification letter from the government agency the month after you turn 64. If you receive a letter stating you may be eligible for OAS or don’t get a letter at all, you’ll need to apply for OAS online through your My Service Canada Account or by mailing in an application

    When can I expect my first OAS payment?

    If you set up direct deposit, OAS payments will be sent to your bank account every month on the following dates:

    January 29, 2020

    July 29, 2020

    February 26, 2020

    August 27, 2020

    March 27, 2020

    September 28, 2020

    April 28, 2020

    October 28, 2020

    May 27, 2020

    November 26, 2020

    June 26, 2020

    December 22, 2020

    Need cash today?

    OAS qualifies as income and can help you get approved for a cash advance personal loan. If you need money today, apply with Fresh Start Finance (in just 3 minutes!) to get quick funds transferred to your bank account in hours, not days!

  • The Guaranteed Income Supplement (GIS) is a non-taxable monthly benefit for low-income seniors living in Canada.
  • The Allowance is for low-income individuals between the ages of 60 to 64 who have a spouse or common-law partner that’s a GIS recipient.
  • The Allowance for the Survivor is available to low-income individuals aged 60 to 64 who are widowed and residing in Canada. 
  • Payment amounts for these benefits depend on your marital status and previous year’s income. Just like the OAS pension, the maximum monthly payment for the GIS, Allowance, and Allowance for the Survivor are adjusted four times per year based on the Consumer Price Index. Current benefit rates are listed here.

    What is the OAS clawback?

    Also known as the OAS recovery tax, the OAS clawback is when you have to repay a portion or all of your OAS pension if your annual income exceeds the threshold amount. Repayments are calculated based on the difference between your net income and the threshold amount for the year.

    Recovery Tax Period

    Income Year

    Minimum Income Threshold

    Maximum Income Threshold

    July 2019 to June 2020

    2018

    $75,910

    $123,386

    July 2020 to June 2021

    2019

    $77,580

    $126,058

    July 2021 to June 2022

    2020

    $79,054

    $128,137

    If your income is over the minimum threshold, you’ll need to repay 15% on the additional income up to a maximum of the total amount of OAS collected. Your OAS benefit is reduced to zero if your income exceeds the maximum threshold.

    Here’s an example of how the OAS clawback works: 

    In 2019, you earned $90,000 and the threshold is $77,580. Your repayment would be 15% of the difference between $90,000 and $77,580. 

    $90,000 - $77,580 = $12,420

    $12,420 x 0.15 = $1,863

    $1,863 / 12 months = $155.25 per month

    In this scenario, your monthly OAS benefits would be reduced by $155.25 from July 2020 to June 2021.

    How do I minimize OAS clawback?

    You can minimize OAS clawback with the following strategies:

    • Split income with your spouse: Reduce your income by giving your spouse up to 50% of your pension. Income splitting applies to Registered Retirement Income Funds (RRIFs) and annuity income too.
    • Take advantage of a TFSA: Investment income generated in a tax-free savings account is non-taxable and therefore doesn’t count towards your net income.
    • Contribute to an RRSP: Registered Retirement Savings Plan contributions lower your net income. The last day you can contribute to your RRSP is December 31 of the year you turn 71.
    • Defer OAS and CPP: If you’re planning on working past age 65, it may be a good idea to defer OAS and CPP benefits. Doing so will prevent clawbacks for up to five years and result in larger payments in the future.
    • Be cautious of capital gains: Capital gains are considered taxable income so you may want to sell assets that could result in higher capital gains before turning 65. 
    • Invest wisely: Not all investment income is taxed the same. For example, interest income from term deposits and Guaranteed Income Certificates (GICs) are 100% taxed, while mutual fund corporations can convert income into capital gains which are taxed at a better rate than interest income.

    Can I get a loan while on OAS?

    Yes – just like CPP disability benefits, OAS payments count as qualified income and can increase your chances of getting approved for a personal loan. Apply with Fresh Start Finance (in just 3 minutes!) to see how much you could be eligible for.