The Old Age Security Canada pension is one of Canada’s retirement income sources for its aging citizens.
Available for Canadians 65 years old or older, you can receive the benefit if you meet the qualifications.
Knowing when you can expect to receive the payments can be crucial in your financial planning during retirement.
I will discuss the OAS payment dates to help you determine when you will receive the pension’s monthly payments in 2022. Additionally, I will give you an overview of the pension to better understand the Old Age Security payment dates.
The upcoming OAS payment dates and schedule are:
- January 27, 2022
- February 24, 2022
- March 29, 2022
- April 27, 2022
- May 27, 2022
- June 28, 2022
- July 27, 2022
- August 29, 2022
- September 27, 2022
- October 27, 2022
- November 28, 2022
- December 21, 2022
The dates for OAS Canada payments are the same as the CPP. Service Canada distributes the payments for both OAS and CPP on the same dates. You can also check out my article on CPP Payment Dates.
What Is OAS?
The OAS is among the three main retirement income plans in Canada. The other two are the Canada Pension Plan (CPP) and the Employment Pensions Plan or Individual Retirement Savings. Unlike the CPP and Employment Pensions Plan, your OAS does not depend on your employment history in any way.
You need to be a resident in Canada or a Canadian citizen aged above 65 to receive the monthly taxable income.
For the CPP, you must retire to begin receiving your pension. You can receive OAS pensions if you are still working or have not worked a day in your life.
If you earn too much income, you can get some or all of your OAS clawed back. Learn how to avoid the OAS clawback here.
The payment cycles for OAS start in July of each year. For July to Sept 2022, you can receive a maximum of $666.83 per month in your OAS pension.
However, you must have lived at least 40 years in Canada as an adult to qualify for the full amount.
To help you understand how OAS works, here’s an example:
For Example: Jonathan moved from the US to Canada at 35. He has been living in the country for 30 years by the time he reaches 65. It means he has lived 30 years as an adult in Canada. According to the requirements, Jonathan is eligible to receive 30/40th of the full benefit through the OAS. That is 3/4th of what he would receive if he had been living in Canada for 40 years. For the quarter of Jul-Sept 2022, Jonathan can receive 3/4th of $666.83 per month (This was the max for that period).
Before you know about the Old Age Security payment dates, you should know how much you stand to make monthly. The OAS can vary from person to person, depending on how long you have lived in Canada as an adult.
Service Canada updates the maximum monthly amount you can receive based on the Consumer Price Index every quarter in January, April, July, and October.
If you have not lived in Canada for 40 years after turning 18, you can still receive partial pension benefits through OAS Canada. Service Canada determines partial pension benefits through 1/40th of the full pension amount for every full year you have lived in Canada since you turned 18.
Are You Eligible For OAS Payments?
You need to qualify for the OAS payments so you can collect them. Here are some of the eligibility requirements for OAS:
- You must be at least 65 years of age.
- If you’re living in Canada, you must be a Canadian citizen or legal resident and have lived in the country for at least ten years since turning 18.
- If you’re living outside Canada, you must have been a Canadian citizen or legal resident the day before you left Canada and resided in Canada for at least 20 years since you turned 18.
- In some cases, you can qualify for OAS as an overseas Canadian in a country with a social security agreement with Canada.
The requirements are more comprehensive, and you can find out more details about eligibility for OAS here.
Are OAS Benefits Taxable?
With the exception of periodic one-time payments, all monthly OAS benefits that you receive during the year count towards your annual income.
This means that they will be added to your existing income (if you have any), and you will be taxed on the full amount you earn during the year.
For example, if you earn $45,000 per year and receive $7,200 in annual OAS payments, you’ll pay taxes on $52,200 worth of income.
OAS Increases For 2022
OAS benefits increase periodically to adjust for inflation. This ensures that the payments are fair and helps offset financial difficulties caused by inflation.
Here’s a list of the most recent OAS increases in 2022:
- Starting in January 2022, OAS payments increased by 1.1%.
- Starting April 1st 2022, for the second quarter of the year, payments increased another 1%.
- Most recently, beginning July 1st 2022, monthly payments increased by another 1.2%.
So far, OAS benefits have increased by a total of 3.3% in 2022. They are expected to increase incrementally during the final quarter of 2022 (October – December) as well.
Here’s another bit of welcome news for OAS recipients over the age of 75:
Starting July 2022, OAS payments to seniors over 75 will be permanently increased by an additional 10%. This increase will be automatically applied to your existing pension plan, so you don’t have to worry about making any phone calls or filling out additional paperwork.
OAS Benefits vs. CPP: What’s The Difference?
OAS Benefits are sometimes confused with CPP payments, as both programs provide scheduled monthly payments to seniors. Other than this one similarity, the two programs are completely different, though.
Here’s a quick table outlining the difference between OAS benefits and CPP payments:
|OAS Benefits||CPP Payments|
|Old Age Security||Canada Pension Plan|
|Available to seniors over the age of 65||Available to seniors over the age of 60|
|Supplemental retirement pension for eligible Canadians||Contributory retirement plan|
|Not dependent upon work history||Based on the amount contributed to CPP during your work history|
|Impacted by your current income||Negligibly impacted by your current income|
While both OAS and CPP are pension plans, they each have a different purpose. The goal of OAS is to ensure that aging Canadians don’t have to live below the poverty line or wonder how they’re going to pay their bills.
OAS is designed to provide financial security to long-term Canadian residents, regardless of how low their income is. It’s not dependent upon your work history and isn’t something that you contribute to during your working years.
Canadians who have no employment history can receive OAS, while CPP is almost entirely dependent upon your work history.
CPP, on the other hand, is a pension plan that you pay into with every employment cheque you receive. The amount you pay into CPP depends on the amount of the cheque. Once you retire, you’ll start receiving this money back as a form of supplemental income to help you live comfortably through retirement.
Eligible Canadians may be able to receive both OAS and CPP payments.
If you plan on retiring soon, be sure to read my guide to retirement income sources for Canadians.
One-Time OAS Payments For Seniors In 2022
In addition to their regular scheduled OAS benefits, eligible seniors may have received a one-time supplemental payment of $300 by the end of April 2022 to help offset the costs of the COVID-19 pandemic.
Those who are receiving GIS (Guaranteed Income Supplement) in addition to their regular OAS benefits should have received an extra $200, for a total of $500.
This one-time payment is tax-free and does not count towards your 2022 income. As such, you don’t need to worry about reporting it on your tax returns.
How Are OAS Benefits Calculated?
OAS benefits are primarily intended for long-term Canadian residents, who’ve lived in-country for 40 years after their 18th birthday. However, those who’ve lived in the country for a shorter amount of time can still receive a fractional amount of OAS benefits proportional to their time spent in the country.
The main stipulation to receive OAS benefits is that you must have lived in Canada for at least 10 years after turning 18.
Here’s a quick look at how this could affect your OAS benefits:
- Lived in the country for 40 years = 100% of eligible OAS benefits
- Lived in the country for 30 years = 75% of eligible OAS benefits
- Lived in the country for 20 years = 50% of eligible OAS benefits
- Lived in the country for 10 years = 25% of eligible OAS benefits
In addition to the amount of time you’ve lived in Canada, your OAS payments are also determined by your current income. If your income surpasses the clawback threshold, then your OAS benefits will be adjusted accordingly.
How OAS Clawback Affects Your Benefits
OAS is primarily designed to help lower-income earners live comfortably through their retirement. If you’re over 65 and still earning good money, then the government will reduce your OAS benefits accordingly.
This is known as the OAS pension recovery tax, and is commonly referred to as OAS clawback, since the government is taking back money that it deems you aren’t in immediate need of.
If you earn more than the minimum threshold, you’ll be required to pay a 15% recovery tax on the amount over the threshold that you make.
The current income recovery threshold for OAS benefits is $79,054. The threshold for OAS clawback changes periodically to account for inflation and other factors.
Let’s just say that you earn $85,000 per year, which is $5,946 over the threshold. This extra amount would be taxed by 15%, and the resulting amount would be deducted from your total eligible OAS benefits.
This means that $891.90 (0.15 x 5,946) would be taken out from your annual OAS benefits. When divided across twelve monthly payments, your monthly OAS payments would be reduced by $74.32.
Use the following equation to figure out the amount that will be deducted from your monthly OAS payments:
(Annual income over threshold x 0.15) / 12 = OAS Clawback
When Will OAS Clawbacks Stop?
Once your annual income falls below the minimum recovery threshold, you will no longer have to pay the 15% recovery tax, and are eligible to receive the full amount of your OAS benefits (accounting for time spent in the country, of course).
You don’t have to wait till the next year to request a stop to your recovery tax either. If, at any point in the year, you believe that your annual income will amount to less than the recovery threshold, you can fill out CRA form T1213OAS.
Simply submit this form to your closest CRA office, and your case will be reviewed.
Are OAS Payments Affected By The Province I Live In?
No. Since the OAS pension plan is a federal program, the amount you are eligible for will not be affected by the province you live in. OAS payments are only determined by the number of years you’ve lived in Canada past age 18 and your current annual income.
OAS Supplemental Benefits You Can Apply For
If you’re over the age of 65 and you’re already receiving OAS benefits, you may also be eligible for the GIS supplement. These benefits are designed to offset potential causes of financial hardship and can put some extra money in your pocket.
Guaranteed Income Supplement
The Guaranteed Income Supplement, which is commonly referred to as the GIS is designed to help lower-income Canadians.
The GIS amount you’re eligible for depends on several factors, including your annual income and whether or not you have a spouse or common-law partner.
Here are the current thresholds and GIS payments offered by the government:
|Living Situation||Maximum GIS Supplement||Income Threshold|
|Single and living alone||$995.99||$20,208|
|Your partner receives full OAS compensation||$599.53||$26,688|
|Your partner receives the Allowance payment||$599.53||$37,392|
|Your partner does NOT receive OAS compensation||$995.99||$48,432|
If you’re eligible, the amount of your GIS supplement will be added onto your existing OAS benefits and should be deposited at the same time as your monthly OAS payment.
How Do I Apply For OAS In Canada?
If you are nearing age 65, then your OAS benefits may be immediately applied. The CRA may begin issuing monthly OAS benefits to eligible seniors based on their income from the previous tax year.
If your OAS benefits are to be automatically applied, the CRA will issue you a letter a month after your 64th birthday, explaining that you’ve been enrolled in the program.
Alternatively, if the CRA needs more information to complete your enrollment, they’ll send a similar letter explaining what they need from you and inviting you to apply.
You can apply with a traditional paper form or apply through your My Service Canada Account. I suggest applying online, as your application will be processed quicker and you don’t have to worry about anything getting lost in the mail.
During your application process, you’ll enter your personal banking information, which is where your OAS payments will be deposited into every month.
When Can I Apply For OAS?
You don’t have to wait until you’re 65 to apply for OAS. You can begin the application process a month after you turn 64. This gives you time to make sure that everything is set up and ready to go, so that you can start receiving your benefits as soon as you turn 65.
How Long Does It Take To Receive My OAS Payments After I Apply?
As long as all of your paperwork is in order and your OAS application has been processed by the CRA, then you can expect to receive OAS payments starting the month after you turn 65.
OAS payments are issued every month on specific dates. Refer to the list of payment dates above to see the closest payment date after your birthday.
Applying For OAS Retroactively (After Age 65)
If you apply for your OAS benefits after you turn 65, you can be compensated for up to twelve months of payments that you would have received if you had applied on time.
For example, if you wait until age 68 to apply for OAS, then you’d only be eligible to receive back payments for the previous year, starting after you turn age 67.
This is why it’s very important to make sure that you apply for and are approved for your benefits by age 66 at the latest. Otherwise, you’ll be missing out on money that you would have otherwise been eligible for.
Should I Defer My OAS Benefits?
If you’re approaching your 65th birthday and are still earning a decent income, then you may want to consider deferring your OAS benefits for a year or so. This can help you avoid OAS clawback and will also increase the amount of OAS benefits that you’re eligible for.
Every month after age 65 that you defer OAS benefits, you’ll be awarded 0.6% extra when you do start accepting your benefits. This totals out to an extra 7.2% for every year that you defer payments.
You can only defer your payments for up to five years, though, for a total of 36% additional OAS benefits. After this point, there’s no further benefit to deferring your payment. Here’s a quick visual breakdown:
|OAS Benefit Starting Age||Months Past Age 65||OAS Benefit Increase|
Can You Receive OAS If You Live Outside Of Canada?
Canadian citizens who live outside of the country can receive eligible OAS benefits if they meet one of the following criteria:
- You spent at least 20 years in Canada after your 18th birthday.
- You’ve lived and worked in a country that shares Canada’s social security agreement. You must have spent a collective 20 years between Canada and that country.
As an out-of-country resident, the 10-year minimum residency required for standard OAS payments in Canada is increased to a 20-year minimum. As you approach retirement, keep this in mind and plan your living situation accordingly to ensure that you receive full benefits.
Are OAS Benefits Changing In 2023?
Starting April 3rd 2023, the CRA is permanently changing the eligibility age to receive OAS benefits to age 67. Research suggests that Canadians are living longer and healthier, so this change reflects that.
Aside from this major change, you can also expect incremental quarterly increases in OAS benefit payments to account for the ever-changing inflation rates.
The OAS pension plan is available to all eligible Canadians over age 65, and provides more financial security during your retirement. If you want to maximize your OAS benefits, it’s important to start planning ahead, though.
Are you prepared for your retirement?
The more prepared you are, the more comfortable you’ll be able to live and the less stress you’ll have to deal with.
If you’re ready to start preparing and planning for your retirement, be sure to check out my ultimate guide to retirement planning in Canada next!