How Much Is the Old Age Pension (OAS) in Canada?

Canada’s Old Age Security (OAS) program is a fundamental part of the country’s public pension system, designed to provide a baseline income for seniors.

Understanding Old Age Security (OAS)

The Old Age Security program serves as a cornerstone of Canada’s retirement income system, providing a monthly payment to eligible seniors. Unlike the Canada Pension Plan (CPP), which is based on individual contributions, OAS is funded through the general tax revenues of the federal government. This means an employment history or direct contributions are not prerequisites for eligibility.

The primary purpose of OAS is to offer a basic level of income support to most Canadians aged 65 or older. It acts as a foundational benefit, allowing individuals to supplement their retirement income from other sources like private savings or employer-sponsored plans. The program aims to help seniors maintain financial stability and cover essential living expenses.

Eligibility for OAS

To qualify for the Old Age Security pension, individuals must be 65 years old or older and meet specific residency requirements. Eligibility largely depends on one’s legal status and the duration of residency in Canada after the age of 18.

For those living in Canada at the time of application, the requirement is to have resided in the country for at least 10 years since turning 18. If an applicant resides outside Canada, the residency requirement increases to at least 20 years in Canada after the age of 18, and they must have been a Canadian citizen or legal resident the day before leaving Canada.

Calculating Your OAS Pension Amount

The maximum monthly Old Age Security pension amount is subject to quarterly adjustments, typically in January, April, July, and October, based on changes in the Consumer Price Index (CPI). For the period of July to September 2025, the maximum monthly payment for individuals aged 65 to 74 is $734.95. Seniors aged 75 and over receive a permanently increased amount, with a maximum monthly payment of $808.45 for the same period.

An individual’s income can significantly affect their OAS payment through the OAS recovery tax, often referred to as the “clawback.” For the 2024 tax year, this recovery tax begins to apply if an individual’s net income exceeds $90,997. The tax rate is 15% of the income above this threshold, meaning for every dollar earned over the limit, the OAS pension is reduced by 15 cents.

The OAS pension can be fully eliminated if an individual’s income surpasses an upper threshold. For those aged 65-74, the OAS benefit is fully recovered if their net income in 2024 reached approximately $148,541. For seniors aged 75 and over, the full recovery threshold for 2024 net income is around $154,196.

Individuals also have the option to defer receiving their OAS benefits for up to five years. This deferral results in a higher monthly payment, with an increase of 0.6% for each month benefits are delayed. Deferring for the full five years can lead to a maximum increase of 36% in the monthly OAS payment.

Receiving and Taxing Your OAS Payments

Old Age Security payments are issued monthly. These payments are commonly made through direct deposit into a recipient’s bank account, usually on the third-to-last business day of each month. While direct deposit is the fastest method, payments can also be received by mail.

OAS payments are considered taxable income and must be reported on an individual’s annual income tax return. Although taxes are not automatically deducted from monthly payments, recipients can request federal income tax to be withheld. If taxes are not voluntarily deducted, individuals may need to pay income tax in quarterly installments to avoid penalties.

Recipients receive a T4A(OAS) slip from Service Canada by the end of February each year, detailing the amount of OAS pension received in the previous tax year. This slip includes information on taxable pension paid, gross pension, any overpayments recovered, and income tax deducted. The amounts from this slip are then entered on the individual’s federal tax return.

Additional Benefits for Seniors

Canada provides supplementary benefits for low-income seniors to help ensure financial stability. The Guaranteed Income Supplement (GIS) is a non-taxable monthly payment designed to supplement the OAS pension for seniors with low income. To be eligible for GIS, individuals must be 65 or older, live in Canada, receive the OAS pension, and have an income below a specified threshold. For a single, widowed, or divorced individual, the income threshold for GIS in 2024 was less than $22,272.

Another benefit is the Allowance, which provides financial support to low-income individuals aged 60 to 64 whose spouse or common-law partner receives the GIS and the full OAS pension. Eligibility for the Allowance also depends on combined annual income falling below a certain level. There is also the Allowance for the Survivor, a non-taxable monthly payment for individuals aged 60 to 64 whose spouse or common-law partner has died, provided they meet income and residency criteria. Both the Allowance and the Allowance for the Survivor are income-tested and are not considered taxable income.