Old Age Security Eligibility

Old Age Security is a monthly payment available to most Canadians aged 65 and older. Unlike the Canada Pension Plan (CPP), OAS benefits are not based on your work history, and you do not need to have been employed to qualify. However, specific eligibility criteria tied to residency and income determine your qualification for receiving OAS benefits.

To be eligible for the Old Age Security pension, you must meet the following requirements:

• Age: You must be 65 years or older.
• Residency: You must have lived in Canada for at least 10 years since the age of 18 if you are still living in Canada. If you are living outside of Canada at the time of your application, you must have been a Canadian citizen or legal resident prior to leaving the country, with at least 20 years of residency in Canada since the age of 18.
• Legal Status: Applicants living in Canada must be Canadian citizens or legal residents when applying for the OAS pension. Applicants residing outside Canada must have been Canadian citizens or legal residents of Canada when they left Canada.
• Income: For the 2024 benefit year, your income must have been less than $142,609 in 2022 if you are between 65 and 74 or have an income of less than $148,179 for those aged 75 or over.

The amount of OAS pension you receive is based on your annual income. The income threshold for the 2023 tax year is set at $142,609 for those aged 65 to 74 and $148,179 for those aged 75 or over. Having an income above this amount will result in an elimination of your OAS benefits for 2024. Note that world income is considered, not just your income within Canada.

There is a minimum income recovery threshold of $86,912 for the 2023 tax year, meaning that if you have an annual income below this amount in 2023, you are eligible to receive up to your full OAS pension. If your income is between $86,912 and the maximum threshold of $142,609 aged 65 to 74 or $148,179 aged 75 or over, your OAS benefits will be reduced on a sliding scale basis.

Do RRSP withdrawals impact my Old Age Security (OAS) benefits?

Yes, RRSP withdrawals can impact your OAS benefits. Since RRSP withdrawals are considered taxable income, it may affect the amount of OAS you receive. This is because OAS benefits are subject to a clawback tax if your annual income exceeds a certain threshold. If you withdraw a significant amount from your RRSP in one year, over the maximum income threshold, you would be ineligible for OAS benefits for that tax year.

Some forms of income that can affect your OAS benefits include:

• Employment income
• Self-employment income
• Pension or retirement plan payments (excluding CPP)
• Rental income
• Investment income
• RRSP withdrawals

The money you receive that isn’t considered taxable income, such as from a reverse mortgage, TFSA withdrawals, gifts, or inheritances, will not affect your OAS payments.

If you are a Canadian citizen or legal resident living and working abroad, your time spent working for a Canadian employer outside of Canada may still count as residency in Canada towards meeting the 20-year requirement.

It is important to keep track of your time spent working while living abroad, as it may affect your eligibility for OAS benefits.

The time spent working abroad for a Canadian employer will count as Canadian residency if you return to Canada within six months of ending employment or if you turn 65 years old while employed abroad but maintained residence in Canada. You will need proof of employment and proof of returning to Canada. You do not require proof of returning to Canada if you turned 65 years old while employed abroad.

To apply for Old Age Security benefits, you can either:

• Apply online: You can apply through the Service Canada website using your My Service Canada Account.
• Apply by mail or in person: You can also print and fill out the OAS application form, then mail it or bring it to your nearest Service Canada office.

You can check your Old Age Security application status online through your My Service Canada Account or by contacting Service Canada.

If your Old Age Security application is approved, you will receive a letter that shows the amount you will receive and the date of your first payment. Old Age Security payment dates are usually within the last 3 business days of each month.

If your Old Age Security application was denied, you can submit a request for reconsideration within 90 days of receiving your decision letter by using your online My Service Canada Account, with a mailed-in form, or by written request. You may also appeal the decision with the Social Security Tribunal.

What if I haven’t lived in Canada for 40 years?

Individuals who haven’t lived in Canada for more than 40 years after the age of 18 may still qualify for a partial pension. This depends on the number of years lived in Canada after age 18, compared to the maximum payout for living in Canada for 40 years. For example, if you have lived in Canada for 20 years after turning 18, you would receive up to half of the full OAS pension amount. If you lived in Canada for 10 years, the minimum requirement to be eligible for OAS, you would receive up to a quarter of the full OAS amount.

What happens if I am still working?

You can still receive OAS payments while working. However, if your income exceeds a certain threshold, you may be subject to the OAS pension recovery tax, reducing your benefit.

Can I defer my OAS pension?

Yes, you can defer your OAS pension for up to 60 months (5 years) after age 65 to receive a higher monthly amount. Deferring your OAS pension will increase your monthly payment by 7.2% for each year that it was deferred.

Can I receive OAS benefits while living outside of Canada?

Yes, you can continue receiving OAS benefits if you retire abroad. However, there may be taxation implications, and currency conversion rates could affect the amount received. For example, depending on the country you reside in, you may face a withholding tax rate of 25% on your OAS payments. Some countries with a tax treaty with Canada may have a lower withholding rate, such as 0% in the United States and 15% in Australia.

Can I receive OAS if I have never worked?

Yes, you may still be eligible for OAS even if you have never worked in Canada. However, this is dependent on meeting the residency and other eligibility requirements.