What is the Old Age Security (OAS) Pension?
The OAS pension is a monthly taxable income that you may receive from the government if you’re 65 and older. In most cases, you do not have to apply to get this benefit because Service Canada will be able to automatically enroll you for the OAS pension.
However, if Service Canada doesn’t have sufficient information to automatically enroll you for the benefit, you will have to apply to be enrolled. If this is your situation, apply ASAP because you will only get a retroactive payment for up to a maximum of 11 months from the date your application was received.
Your first OAS payment is usually the first month after you turn 65. Hence, if a payment is not received at that time, and you didn’t apply for the benefit, chances are, Service Canada did not automatically enroll you to get the benefit, so you have to apply.
To keep up with cost of living, the OAS pension is reviewed 4 times each year, in January, April, July and October. The monthly payment from January to March is as follows.
The maximum OAS monthly payment is $615.37. But you may receive a larger payment for each month you delay receiving your benefit. You may delay payments up to 5 years. It doesn’t make sense delaying beyond that because your payments will cease to increase at age 70 .
Also, only retirees with income less than $77,580 may receive this maximum. If your income exceeds $77,580, there’s a clawback. You will have to repay part or your entire OAS pension. 😱😱
Everyone doesn’t receive the same amount of OAS pension payment, because it depends on how long you have been living in Canada and other criteria that are covered below.
Who is Eligible to Receive the OAS Pension?
While you don’t have to work in Canada to receive the OAS pension, you must satisfy certain criteria to be eligible to receive the benefit. The information below was taken from the Government of Canada website.
If you are living in Canada, you must:
- be 65 years old or older
- be a Canadian citizen or a legal resident at the time your OAS pension application is approved
- have resided in Canada for at least 10 years since the age of 18
If you are living outside Canada, you must:
be 65 years old or older
- have been a Canadian citizen or a legal resident of Canada on the day before you left Canada
- have resided in Canada for at least 20 years since the age of 18
Although your Old Age Security pension is a taxable income, the taxes aren’t automatically deducted each month. If you want the tax to be deducted from your monthly payment click HERE to learn how.
If you’re out of the country for more than 6 months and you’re not eligible to receive OAS pension outside of Canada, your payments will stop. Visit the Government of Canada website to learn more.
What is the Guaranteed Income Supplement (GIS)?
The GIS is a monthly non-taxable income from the government that is available for low-income Old Age Security pensioners. Not every OAS pensioner with low income is entitled to the GIS however, it is based on your income and some specific criteria listed below that I took from the Government of Canada website.
You may qualify if:
- you are 65 or older
- you live in Canada
- you get the Old Age Security (OAS) pension
- your income is below $18,648 if you are single, widowed, or divorced
- your income plus the income of your spouse/common-law partner is below:
- $24,624 if your spouse/common-law partner receives the full OAS pension
- $44,688 if your spouse/common-law partner does not receive an OAS pension
- $44,688 if your spouse/common-law partner receives the Allowance
Like the OAS pension, the GIS benefit is also reviewed 4 times each year, in January, April, July and October to keep up with cost of living. The monthly payment from January to March is as follows.
If you’re a single, widowed, or divorced pensioner earning less than $18,648 your maximum monthly GIS payment will be $919.12.
If your spouse/common-law partner receives the full OAS pension and your joint income is less than $24,624, your maximum monthly GIS payment will be $553.28.
If your spouse/common-law partner does not receive an OAS pension and your joint income is less than $44,688, your maximum monthly GIS payment will be $919.12.
If your spouse/common-law partner receives the allowance and your joint income is less than $44,688, your maximum monthly GIS payment will be $553.28.
Do keep in mind that if you qualify to receive the GIS after your OAS review, the government won’t just send it to you automatically, you still need to apply for it. Government is never eager to give you any money if you don’t ask for it!
And you must file your taxes by April 30th each year to avoid disruption in your GIS payment. And if you’re out of the country for more than 6 months, your GIS payment will stop.
There’s another benefit for low-income individuals aged 60 to 64 called the Allowance. Click Allowance to learn more about eligibility.