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, you don’t have to pay into OAS in order to receive it, 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 you must have lived in Canada 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 you 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, enrolment in OAS is automatic. You will receive a letter about your eligibility for OAS by mail in the month after you turn 64 years old.

If you do not receive this letter, you should contact Service Canada to learn more and find out if you need to apply for OAS.

Representatives are available Monday to Friday, 8:30 a.m. to 4:30 p.m. local time, at 1-800-277-9914. You can check current wait times and request a callback on the Government of Canada’s website.

Deferring OAS

If you don’t want to receive your pension when you turn 65, you can choose to defer it for up to five years (60 months). 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: 60 months, or until you turn 70.

Deciding whether to defer OAS is a personal decision and should be based on your unique financial situation. The Government of Canada recommends considering factors like:

Whether you plan to keep working after age 65.
Your health.
Your retirement plans.
Whether your spouse or partner wants to apply for the Guaranteed Income Supplement Allowance.

🤓 Nerdy Tip: If you are over age 70 or eligible for the Guaranteed Income Supplement (GIS), there’s no advantage in deferring OAS — and you may even be missing out on benefits.

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 each month depend on your age, your income, where you live, and how long you lived in Canada after you turned 18.

Full OAS pension

To receive a full pension, you must have lived in Canada for at least 40 years after turning 18. You would also 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.

Partial OAS pension

If you’ve lived in Canada for less than 40 years, you may qualify for a partial OAS pension. 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.

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.

Frequently asked questions about OAS

From July to September 2024, the maximum OAS monthly payment amount was $718.33 for people aged 65 to 74, and $790.16 for those aged 75 and older. For up-to-date OAS benefit payment amounts, visit Old Age Security payment amounts.

If you qualify for a partial pension, you’ll need to multiply those amounts by the number of years you lived in Canada after age 18 divided by 40. In our example above, you’d multiply the full pension amount by 31/40. You can use the Government of Canada’s OAS Benefits Estimator to help you estimate your monthly payments.

🤓 Nerdy Tip: OAS 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.

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

Yes, your OAS payment is taxable income. Taxes aren’t automatically deducted each month, but you can request that they are if you prefer. You can file this request online through your My Service Canada account or by mail. If you don’t request that taxes be deducted each month, you may have to pay income tax each quarter.

At tax time, you will receive a T4 slip (or an NR4 slip if you live outside of Canada) that shows the amount you received. You’ll need to include this amount on your tax return each year.

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

For 2024, the minimum income recovery threshold is set at $90,997. If you earn more than $90,997 in 2024, you will be subject to the recovery tax. To calculate how much you’ll need to repay, first figure out the difference between your income and the threshold by subtracting your income from the threshold. You’ll repay 15% of that difference.

For example, if you make $100,000 in 2024, the amount over the threshold is $9,003. Multiply it by 0.15 to get the amount you’ll need to repay: $1,350.45.

There’s also a maximum income recovery threshold. 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 2024, the amounts are:

$148,065 for ages 65 to 74
$153,771 for age 75 and older

If your income exceeds either of these thresholds, you’ll receive an OAS Return of Income form and an NR4 OAS information slip that must be submitted to the Canada Revenue Agency (CRA). If you don’t submit the Return of Income form by the April 30 tax deadline, you’ll stop receiving OAS benefits.

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. You can notify Service Canada of the death by mail or phone. Either way, you’ll need the person’s full name, dates of birth and death, address and Social Insurance Number (SIN).