What Is Old Age Security and How Does It Work?

Old Age Security (OAS) is a fundamental component of Canada’s social security system, designed to provide a monthly pension to most Canadians aged 65 or over. Unlike many retirement programs, OAS is non-contributory, meaning individuals do not pay directly into it through payroll deductions. Instead, it is funded directly through the general tax revenues of the Canadian government. This pension aims to ensure a baseline level of income support for eligible seniors across the country.

Eligibility Requirements

To qualify for Old Age Security, an individual must satisfy specific age, residency, and legal status criteria. The primary age requirement mandates that applicants must be at least 65 years old to begin receiving benefits. This age threshold is consistently applied across all applications for the OAS pension.

Residency rules are a significant factor in determining eligibility, distinguishing between those living within Canada and those residing abroad. For individuals living in Canada, a minimum of 10 years of residency in Canada after turning 18 is required to receive a partial pension. To qualify for a full OAS pension, an individual must have resided in Canada for at least 40 years after their 18th birthday.

Periods of temporary absence from Canada may still count towards residency if certain conditions are met, such as maintaining a home in Canada and returning regularly. For those living outside Canada, an individual must have resided in Canada for at least 20 years after turning 18 to receive the OAS pension. If they resided in Canada for fewer than 20 years after age 18, they might not be eligible while living abroad, unless a social security agreement is in place.

Regarding legal status, applicants must be either Canadian citizens or legal residents of Canada at the time their application is approved. This includes permanent residents and certain other protected persons. These factors form the basis for assessing OAS eligibility.

Special circumstances can influence eligibility, particularly for individuals who have lived in Canada for shorter periods but have social security agreements with other countries. Canada has agreements with numerous countries, which can allow periods of residency or contributions in those countries to count towards Canadian OAS eligibility. These agreements prevent double taxation and help individuals qualify for benefits.

To assess eligibility, individuals need to gather specific information and documentation. This includes official proof of age, such as a birth certificate or passport, to verify the 65-year age requirement. Detailed documentation of Canadian residency history is also essential, including dates of entry and exit from Canada, along with supporting documents like tax records, utility bills, or rental agreements that confirm periods of residence. This ensures Service Canada can make an accurate determination.

Benefit Calculation and Payment

The Old Age Security benefit amount is calculated based on an individual’s years of residency in Canada and their income level. The maximum monthly OAS amount is subject to quarterly review and adjustment to account for inflation and cost of living changes. For the quarter of July to September 2025, the maximum monthly OAS pension for individuals aged 65 to 74 is approximately $734.95, with a slightly higher amount for those 75 and over at around $808.45.

The number of years an individual has resided in Canada after turning 18 influences the amount of OAS received. To qualify for a full OAS pension, an individual must have resided in Canada for at least 40 years after their 18th birthday. If a person has resided in Canada for fewer than 40 years but at least 10 years, they may qualify for a partial pension. The partial pension is calculated as a fraction of the full pension, based on the number of years of residency divided by 40. For example, someone with 20 years of residency would receive 20/40, or 50%, of the full OAS pension amount.

The “OAS recovery tax,” or “clawback,” reduces benefits for higher-income recipients. For the period of July 2025 to June 2026, if an individual’s net income from the 2024 tax year exceeds an annual threshold of $90,997, their OAS pension will be reduced. The recovery tax rate is 15 cents for every dollar of net income above this threshold. For every dollar above the threshold, 15 cents of the OAS benefit is repaid.

The clawback mechanism can lead to a complete repayment of OAS if an individual’s net income reaches a higher threshold. For the July 2025 to June 2026 period (based on 2024 income), the OAS pension is fully eliminated if an individual’s net income reaches approximately $148,451 for those aged 65-74, or around $154,196 for those 75 and over. This reduction ensures the program supports seniors with lower to moderate incomes.

OAS payments are received monthly, usually on the third business day from the end of the month. The preferred method for receiving these payments is through direct deposit, which ensures timely and secure delivery of funds directly into the recipient’s bank account. This method eliminates the need for physical cheques and provides greater convenience.

Old Age Security benefits are considered taxable income. Recipients must report their OAS payments on their annual income tax returns. While the benefit provides valuable income support, its taxable nature means it can affect an individual’s overall tax liability.

Application Process

For many eligible individuals, the application process for Old Age Security is streamlined through automatic enrollment. Service Canada may automatically enroll individuals if they have sufficient information on file, notifying them by mail after their 64th birthday. This confirms automatic enrollment and provides benefit details.

If an individual is not automatically enrolled, they will need to apply for OAS. Apply several months before turning 65, ideally six to eleven months prior, to ensure benefits begin when eligible. Earlier application allows sufficient processing time and avoids payment delays.

Applications can be submitted through several methods. Online submission through a My Service Canada Account (MSCA) is the most common and quickest method. Alternatively, individuals can apply by mail or, in some cases, in person at a Service Canada Centre.

The main application form is the “Application for the Old Age Security Pension” (Form ISP-3000). This form can be downloaded from the Service Canada website or obtained in person at a Service Canada Centre. Supporting documents, such as proof of age and Canadian residency history, are required.

Ensure all sections are filled out accurately and completely. Missing information or errors can delay processing. All required signatures must be present, and supporting documentation should be legible.

The completed application package can be submitted electronically through My Service Canada Account, or mailed to the designated Service Canada address. In-person applications can be submitted at a Service Canada Centre. Service Canada typically takes several weeks to process applications and communicates decisions by mail.

Related Income Supplements

Beyond the basic Old Age Security pension, income-tested benefits provide additional financial support to low-income seniors. These supplements enhance the financial well-being of vulnerable individuals receiving or associated with OAS. These programs augment the OAS benefit.

The Guaranteed Income Supplement (GIS) is a monthly payment for low-income Old Age Security recipients in Canada. GIS eligibility is determined by income, with the amount correlating directly to reported income. Lower income results in higher GIS payments, providing a safety net for seniors with limited resources.

The Allowance is an income-tested benefit for individuals aged 60 to 64 whose spouse or common-law partner receives OAS and GIS. It provides financial assistance to couples where one partner receives OAS and GIS, and the younger partner is not yet OAS eligible. The Allowance amount depends on the couple’s combined income.

For low-income widowed individuals aged 60 to 64, the Allowance for the Survivor provides financial support. This benefit is for those not yet OAS eligible who have lost their spouse or common-law partner. Like other supplements, eligibility and amount are determined by individual income.

These income supplements are linked to the Old Age Security program, often requiring the primary recipient to be an OAS pensioner or spouse. They are income-tested, with an individual’s or couple’s net income assessed for eligibility and benefit amount. While providing financial support to vulnerable seniors, they are typically applied for automatically with the OAS application or through a simplified process once OAS is approved.

Citations

Old Age Security payment amounts. Government of Canada. Retrieved August 23, 2025, from https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html