How much will your OAS payments be?
While most Canadians will qualify for the Old Age Security (OAS) pension when they retire, not everyone understands how the benefits work, or how much is paid out. If you're still wondering what you're entitled to when you retire, this article explains the basics.
What is Old Age Security?
Launched in 1927, OAS is designed to provide seniors with a modest monthly pension to cover basic living expenses. It is a taxable benefit.
Who is eligible for OAS?
As soon as you turn 65, you are eligible to receive OAS. The month after you turn 64 you should receive one of two letters from Service Canada:
- A notification that you were selected for automatic enrolment
- A notification that you could be eligible for OAS and that you must apply as soon as possible
To qualify for OAS, you must be a Canadian citizen or legal resident, and have resided in Canada for 10 years after age 18. Or, if you are a Canadian and you are working outside the country for a Canadian employer, your working time abroad can qualify as residence if you return to Canada within six months of ending employment or if you turned 65 while still employed.
You may also qualify for an OAS pension or a pension from another country if you have been living in a country that has a social security agreement with Canada or if you’ve contributed to the social security system of a country which Canada has an agreement with. Learn more at the Government of Canada website.
How much will your OAS payments be?
The amount of OAS payment you could receive is determined by your income and how long you have lived in Canada after the age of 18. Payment amounts are adjusted quarterly (in January, April, July and October) according to the cost of living in Canada, as measured by the Consumer Price Index (CPI).
As you can see from the chart below, the 2022 average monthly amount paid by OAS is $648.67, which comes out to just under $7,800 a year.
|Average monthly amount for 2022||OAS reduction starts with income over||OAS eliminated when income reaches|
|OAS pension benefit||$648.67||$81,761.00||$133,527.00|
The amount you're eligible for also depends on the income you receive. If you receive OAS payments and your annual income exceeds the threshold (in 2022, $81,761), you’ll be required to pay a recovery tax of 15% for each dollar you earn over $81,761. Any OAS pension is eliminated if you earn over the maximum threshold, which in 2022 is $133,527 per year
New in 2022: increases to OAS payments at age 75
The Government of Canada will increase OAS payments at age 75 in July 2022. Those who receive OAS and are age 75 or over will see their payments increase by 10%. Those who are turning 75 after July 1, 2022 will see a permanent increase of 10% to their payments following their 75th birthday.
When can I start receiving OAS payments?
OAS payments generally begin the month after you turn 65 years old.
OAS payment dates for 2022
Monthly OAS payment dates change each year, but typically are made in the last week of each month. OAS payments in 2022 are as follows:
- January 27, 2022
- February 24, 2022
- March 29, 2022
- April 27, 2022
- May 27, 2022
- June 28, 2022
- July 27, 2022
- August 29, 2022
- September 27, 2022
- October 27, 2022
- November 28, 2022
- December 21, 2022
How to increase your OAS payments
Like with Canada Pension Plan payments, you can also defer receiving OAS pension payments for up to five years, or until you turn 70. By deferring, your monthly OAS pension will increase by 0.6% (or 7.2% annually) for each month that you delay receiving benefits, up to a maximum of 36%. If you are automatically enrolled in OAS, you can request your deferment through your My Service Canada account or by completing and returning your automatic enrolment letter. Learn more about applying at the Government of Canada website.
Are there spousal benefits?
Surviving spouses and common-law partners of OAS recipients are entitled to a survivor pension. Like the OAS pension itself, this benefit can be offset by recovery tax if your surviving spouse or partner is earning an income and eliminated if their earnings exceed $25,968. Spousal benefits can differ significantly based on your individual situation. Please refer to the Government of Canada website for more details.
What is the Guaranteed Income Supplement?
Based on your income and marital status, you may also be eligible for the Guaranteed Income Supplement (GIS) if:
- you are a resident of Canada aged 65 or older
- you receive OAS payments
- your income is below the maximum annual income threshold for the GIS based on your marital status
Some Canadians are automatically enrolled for the GIS at the same time as OAS payments based on their income, but you can also apply for the GIS. Learn more about how to apply at the Government of Canada website.
Do I need to apply for OAS payments?
In many cases, Canadians don’t need to apply for OAS payments. You should receive a letter from Service Canada if you have been automatically enrolled.
If you do need to apply (usually if the Government doesn’t have enough information to automatically enrol you, or if you’ve elected to start your OAS payments later than age 65), or you do not receive a letter, you can complete your application online through your My Service Canada account, or mail a paper application to Service Canada. Learn how to apply at the Government of Canada website.
Often, OAS goes hand-in-hand with Canada Pension Plan (CPP) benefits. You can learn more in our article about CPP.