Old Age Security (OAS): What It Is and How It Works

What Is Old Age Security and How Does It Work?

Canada’s Old Age Security (OAS) is a benefit paid to seniors. Enrollment is often automatic, and the amount you receive depends on age, income and how long you lived in Canada as an adult.

The Old Age Security (OAS) pension is a taxable monthly benefit available to most Canadians 65 years or over who meet the eligibility requirements. Much like the Canada Pension Plan (CPP), it’s designed to help bolster senior Canadians’ retirement income. However, recipients of the OAS pension don’t have to pay into the program as it is funded by tax revenues.

Who is eligible for OAS?

To be eligible for OAS you must be at least 65 years of age. Other requirements depend where you live.

If you live in Canada: You must be a Canadian citizen or a legal resident and must have lived in the country for at least 10 years since you turned 18.
If you live outside of Canada: You must have been a Canadian citizen or a legal resident when you left the country and must have lived in Canada for at least 20 years from age 18.
If you lived outside of Canada while working abroad for a Canadian employer, such as the Armed Forces or a bank, you may be able to count that time toward your residency requirement if you:
- Returned to Canada within six months of your employment ending, or
- Turned 65 while still employed and maintained residence in Canada for tax purposes while working outside of the country.

How and when to apply for OAS

In general, enrollment in OAS is automatic. You will receive written notification by mail in the month after you turn 64 years old.

If for some reason you do not receive written notification, you should contact Service Canada to learn more and find out if you need to apply. Representatives are available Monday to Friday, 8:30 a.m. to 4:30 p.m. local time, at 1-800-277-9914, and you can check current wait times on the Government of Canada’s website.

Deferring OAS

If you don’t want to receive your pension when you turn 65, you can voluntarily defer it so you don’t start receiving it until a later date. The longer you defer OAS, the more money you will receive each month. For every month that you defer receiving the OAS, the monthly amount increases by 0.6% up to a maximum of 36% if you delay for the maximum length of time: 5 years, or until you turn 70.

Deciding whether to defer OAS is a personal decision and should be based on your unique financial situation, such as whether you plan to keep working after age 65.

How OAS works

OAS recipients can qualify for a full pension or a partial pension. The pension you’ll qualify for and the amount of money you’ll receive monthly depends on your age, your income and how long you lived in Canada after you turned 18.

To receive a full pension, you must have lived in Canada for at least 40 years after turning 18. Alternatively, you would qualify for a full pension if you were at least 25 years old and lived in Canada or had a valid Canadian immigration visa on or before July 1, 1977. You can contact Service Canada with any qualification questions.

To be eligible for a partial pension, you must have lived in Canada for at least 10 years after turning 18. If you no longer live in Canada, you must have lived there for at least 20 years since turning 18 to receive a partial pension.

Nerdy Tip: The percentage of the pension you’ll receive is calculated by dividing the number of years you lived in Canada after turning 18 by 40. For example, if you lived in Canada for 31 years after turning 18, you’ll receive 31/40ths of the full monthly pension amount.

Your Old Age Security payment is taxable. The payment rates are reviewed every year in January, April, July and October to ensure they keep up with the cost of living. Monthly payments will increase if the government determines that the cost of living has gone up, but they can never decrease.

Since July 2022, OAS recipients over age 75 have received a 10% increase in monthly payments. You’ll see this increase in the month after your 75th birthday.

From October to December 2023, the maximum OAS monthly payment amount was up to $707.68 for people aged 65 to 74, and up to $778.45 for those 75 and older. For up-to-date OAS benefit payment amounts, visit Old Age Security payment amounts.

Low-income Canadians who receive the OAS may also be eligible to receive monthly non-taxable benefits like the guaranteed income supplement (GIS) and Allowances.

What is the OAS recovery tax?

Your OAS pension could be subject to a recovery tax, commonly referred to as the “OAS clawback,” if your net annual income exceeds the income threshold set for the year by the government.

For 2023, the minimum income recovery threshold is set at $86,912. If you earned more than $86,912 in 2023, you would have to figure out the difference between your income and the threshold by subtracting your income from the threshold. Then you’d repay 15% of that difference.

There’s also a maximum income recovery threshold, and if your income is greater than this amount, you’ll have to pay back all of the OAS payments you received for the year. The maximum income recovery threshold depends on your age. For 2023, the amounts are:

$142,609 for ages 65 to 74.
$148,179 for age 75 and older.

If you exceed either of these income thresholds, you’ll receive an Old Age Security Return of Income form and an NR4 OAS information slip that must be submitted to the Canada Revenue Agency (CRA).

What happens to OAS if the beneficiary dies?

If the beneficiary of an Old Age Security pension dies, their benefits must be cancelled as soon as possible. The estate may receive payments for the month of death, but all payments received after that month must be repaid. Notify Service Canada by mail or phone and include the person’s social insurance number (SIN).