Top 10 questions we are asked about: Old Age Security (OAS)

Michael Callahan
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At Edward Jones, we know that retirement is an important life event with many considerations. One of the most common sources of retirement income for Canadians is Old Age Security (OAS).

What is OAS?

The Old Age Security (OAS) retirement pension is a taxable monthly benefit intended to provide seniors with a modest pension. If you qualify, you’ll receive the OAS pension for the rest of your life.

An Edward Jones advisor can

1. How do I qualify for an OAS pension?

To qualify for an OAS pension, you must be 65 years or older and meet certain residency criteria, which differs depending on where you currently live. If you currently live in Canada, you must be a Canadian citizen or legal resident when your application is approved and have resided in Canada for at least 10 years since you turned 18. If you are living outside of Canada, you must have been a Canadian citizen or legal resident of Canada the day before you left Canada and you must have resided in Canada for at least 20 years since you turned 18.

OAS eligibility is not related to your employment history, and you may qualify for an OAS pension even if you have never worked or are still working.

2. How much OAS pension will I receive?

The OAS pension amount you receive depends on several factors including the number of years you’ve been a resident of Canada, the age at which you start receiving your OAS pension and net income from the previous year.

For help determining how much you could receive, talk to an Edward Jones advisor.

3. What is the OAS Clawback?

The OAS clawback, also known as the OAS recovery tax, is a tax that reduces your OAS benefit if your annual income exceeds a certain threshold. As your income increases above the threshold, your OAS benefit is gradually reduced. The recovery tax is 15%. In other words, for every dollar of income above the threshold, you lose 15 cents of your OAS pension benefit.

For the period July 2025 to June 2026, the clawback starts if your 2024 income is over $90,997. Your benefit is fully clawed-back if your income reached $148,451 (for those aged 65 to 74 inclusive) or $154,196 (for those aged 75 and over).

For the period July 2026 to June 2027, the clawback starts if your 2025 income is over $93,454. Your benefit is fully clawed-back if your income reached $152,062 (for those aged 65 to 74 inclusive) or $157,923 (for those aged 75 and over).

4. Are OAS benefits taxable?

Yes, OAS pension benefits are taxable as regular income with no preferential tax treatment. Taxes are not automatically deducted from your payments, but you can request for the federal income tax to be deducted from your benefit payments. If you live outside of Canada and/or are a not considered a Canadian resident for income tax purposes, a 25% non-resident tax is deducted from your OAS payments. The Guaranteed Income Supplement (GIS), Allowance and Allowance for the Survivor benefits are tax-free.

Concerned about how OAS taxes affect your retirement income? Speak with an Edward Jones advisor to explore tax-efficient strategies.

5. When can I start to receive OAS pension benefits?

The normal start date for receiving an Old Age Security (OAS) pension is age 65. Although an early start is not permitted, you can begin as late as age 70. However, if you postpone receiving OAS until after age 65, your payments will increase by 0.6% each month (7.2% per year), up to a maximum increase of 36% at age 70. The maximum monthly amount you can receive is reached when you turn 70. There is no advantage in waiting until after age 70 to start receiving your pension. Further, there is no requirement to stop working to receive your OAS pension.

6. When should I start to receive my OAS pension?

There are many factors to consider when deciding when to start receiving OAS. Although many may advise deferring to a late start date, the optimal time for you to begin receiving benefits depends on your personal situation. Some items to consider include:

  • Your tax rate – OAS is taxable as regular income, so if you’re already in a high tax bracket (for example, if you are still working or if you have received a severance or other retirement type package), it may be beneficial to defer.
  • Your total income – OAS pension is subject to a recovery tax or ‘clawback’, which means that your OAS benefits are reduced (and eventually eliminated) as your income increases beyond a certain threshold.
  • Your need for income – If you need OAS at age 65 in order to achieve your desired level of retirement income, postponing to a later date may not be a suitable option.
  • Your health – If you’re healthy and expect to live a long life, it may make sense to start receiving your OAS pension later. On the other hand, if you believe you have a shortened life expectancy, it may be more beneficial to start as soon as possible.
  • Your lifestyle – Remember, it’s not just about the numbers. While the math may dictate one course of action, your lifestyle may dictate another as there’s real value in having the money while you’re still able to make good use of it.

An Edward Jones advisor can help determine an optimal date for your situation.

7. Are there any additional benefits available to low-income individuals?

Yes, there are additional benefits available for low-income individuals, including the Guaranteed Income Supplement (GIS) for those 65 and older, and the Allowance, and Allowance for the Survivor for individuals age 60 to 64. These supplementary benefits for low-income individuals are received tax-free.

  • Guaranteed Income Supplement (GIS) – a monthly payment to low-income seniors aged 65 and older. In order to qualify, you must receive an OAS pension, must live in Canada, and your income must be below $21,624 (2024). Depending on your personal situation, you could receive an amount up to $1,065.47 permonth (2024), with reduced amounts available depending on your household income and personal circumstances.
  • Allowance – a monthly payment to low-income individuals aged 60 to 64 inclusive. In order to qualify, your spouse or common-law partner must be eligible to receive the GIS, you must live in Canada, and your combined household income (you and your spouse or partner) must be below $39,984 (2024). Depending on your personal situation, you could receive an amount up to $1,354.69 per month (2024), with reduced amounts available depending on your household income and personal circumstances.
  • Allowance for the Survivor – a monthly payment to low-income individuals aged 60 to 64 inclusive. In order to qualify, your spouse or common-law partner must be deceased and you must not have re-married or entered into a common-law relationship, you must live in Canada, and your income must be below $29,112 (2024). Depending on your personal situation, you could receive an amount up to $1,614.89 per month (2024), with reduced amounts available depending on your income and personal circumstances.

8. What happens to my OAS pension when I die?

There is no survivor benefit or death benefit. Benefits are payable for the month in which the death occurs, but any benefits received after that will have to be repaid. OAS pension benefits must be cancelled upon death by contacting Service Canada by phone or by sending the required documentation to the nearest Service Canada Office by postal mail.

9. Can I split my OAS pension with my spouse or partner?

No, the OAS pension is not eligible for pension income splitting with a common law partner or spouse.

10. How do I apply for OAS?

In some situations, Service Canada will automatically enroll you for the OAS pension. When this happens, Service Canada will inform you if you have been automatically enrolled. If Service Canada does not have enough information to enroll you automatically, you will need to apply for your OAS pension.