Old Age Security
Old Age Security (OAS) is a taxable monthly pension available to most residents of Canada 65 years of age or older with individual income less than $122,843. As of January 2018, the basic amount is C$586.66 per month. At tax time, recipients with a 2017 income of over $74,788 must pay back a portion of their Old Age Security at a rate of 15% of net income. This is often referred to as the "OAS clawback". OAS amounts are indexed to the Canadian Consumer Price Index and are adjusted every calendar quarter if the 3-month average CPI has increased.
A person must apply to Employment and Social Development Canada (ESDC) and meet the eligibility criteria to receive benefits.
To receive a full OAS pension, a person must meet these conditions:
- Category 1 – Lived in Canada for at least 40 years after turning 18, or
- Category 2 – Born on or before July 1, 1952, and between the time the applicant turned 18 and July 1, 1977, the applicant lived in Canada for some period of time, and the applicant lived in Canada for the 10 years immediately before the application was approved.
If an applicant has not lived in Canada for all of the last ten years because they gave up residence in Canada at some time, an applicant may still qualify for a full pension if they meet both conditions below:
- Lived in Canada for the year immediately before the application was approved, and
- Prior to these last 10 years, the applicant lived in Canada after age 18 at least three times as long as the total of absences during the last 10 years.
If an individual does not qualify for a full pension, he/she may qualify for a partial pension if he/she meets these conditions:
- Age 65 or older, and
- Canadian citizen or permanent resident who is living in Canada, and
- Lived in Canada for the last 10 years or, if not resident in Canada, for 20 years after the age of 18. (Some totalization agreements allow using years of residence in other countries for meeting the 20 years requirement.)
The partial pension is calculated as 1/40 per year of residency in Canada.
Social security agreements
Canada has social security agreements with a number of countries. These agreements may allow a person who has lived in Canada and another country (for example, the U.S.), to count years spent in the other country to qualify for the OAS pension. Note that this is to qualify, and that only time actually spent living in Canada will be counted in determining the amount of the pension.
For low income pensioners who earn little or no other income, the Old Age Security is supplemented by a Guaranteed Income Supplement (GIS), which is considered non-taxable income. The amount of the Guaranteed Income Supplement depends on income, marital status, and the age of the spouse in married couples. As of April 2018, the maximum supplement for a single individual with no other source of income is $880.61 per month, and $530.12 per month to each spouse of a married couple. Therefore, as of April 2018, a single individual would get a maximum of $1,467.27 a month (basic pension plus max single supplement) and each spouse of a married couple would get a maximum of $1,116.78 a month (basic pension plus max spouse supplement).
Old Age Security should not be confused with the Canada Pension Plan, which is a contributory, earnings-related pension paid in addition to the OAS to those who have contributed to it.
Comparison to other nations
Canada is the only G7 nation (and one of the few OECD nations) that does not have a plan to adapt to rising life expectancy by raising the age of eligibility of its public retirement program. According to the government's own estimates, raising the age of eligibility by two years would reduce federal expenditures in 2030 by $10.8 billion.
- Clemens, Jason; Parvani, Sasha (November 2017), The Age of Eligibility for Public Retirement Programs in the OECD (PDF), Fraser Institute, ISSN 2291-8620, retrieved 26 November 2017