The Old Age Security (OAS) program remains a cornerstone of Canada’s social safety net for seniors. As we head into 2025, important updates to OAS payments and eligibility thresholds have been announced. These changes aim to help seniors better manage the cost of living in an inflationary environment.
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Whether you’re already receiving OAS or planning to apply, this comprehensive guide will help you understand the maximum payments, income thresholds, and options to delay your benefits for larger payouts.
Key 2025 OAS Payment Amounts
Maximum Monthly Payments
- Age 65 to 74: Up to $727.67 per month.
- Age 75 and Over: Up to $800.44 per month, reflecting the 10% increase for seniors in this age group.
Income Thresholds for OAS
To receive the maximum OAS payment, your annual net world income (2024) must fall below:
- $148,451 for those aged 65 to 74.
- $154,196 for those aged 75 and older.
If your income exceeds $90,997, you may need to repay part or all of your OAS through the OAS recovery tax.
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How OAS Adapts to Inflation
OAS payments are reviewed quarterly (January, April, July, and October) to reflect changes in the Consumer Price Index (CPI). This ensures payments keep pace with inflation.
- Good news: If inflation decreases, your payment will not go down.
Why Delaying Your OAS Payments Might Make Sense
While you can start receiving OAS the month after turning 65, delaying your payments can increase your monthly amount. For every month you delay, your benefit increases by 0.6%, up to a maximum of 36% for a five-year delay.
Benefits of Delaying
- Higher Monthly Payments: By waiting until age 70, you can significantly increase your OAS.
- Flexibility: If you’re still working and earning above the income threshold, delaying can help you avoid the OAS recovery tax.
When to Apply for OAS
- If you’re eligible for the Guaranteed Income Supplement (GIS), there’s no advantage in delaying, as GIS benefits don’t increase with a delayed OAS.
- Similarly, delaying OAS impacts other benefits like the Allowance or the Allowance for the Survivor, as these are only available when OAS payments start.
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Retroactive Payments: What You Need to Know
If you’re over 65 and haven’t applied for OAS yet, you can request a retroactive payment for up to 11 months from the date your application is received.
Partial OAS: For Canadians With Less Than 40 Years of Residency
Not everyone qualifies for the full OAS pension, which requires at least 40 years of residency in Canada after age 18. If you’ve lived in Canada for at least 10 years but fewer than 40 years, you may qualify for a partial OAS pension.
How Partial Payments Are Calculated
Your payment is based on the ratio of years lived in Canada to 40. For example:
- 20 years in Canada: Receive 50% of the maximum OAS payment.
- 10 years in Canada: Receive 25% of the maximum OAS payment.
Payment Methods: How You’ll Receive OAS
You can receive your OAS payments via:
- Direct deposit: Available for bank accounts in Canada, the United States, and select other countries.
- Cheque: Mailed to your registered address.
Key Considerations When Applying for OAS
Before applying, consider your health, financial situation, and retirement plans:
- If you’re still working and earning a high income, delaying OAS might be beneficial.
- If you need GIS or the Allowance, apply as soon as you’re eligible.
- For those with reduced residency years, use the OAS estimator to calculate partial payments.
The 2025 OAS updates provide seniors with opportunities to maximize their retirement income while adapting to inflation. Whether you’re planning to delay payments for a higher monthly amount or you’re seeking additional benefits like GIS, it’s important to stay informed and make decisions that align with your financial goals.
Take control of your retirement by understanding these updates and leveraging them for a secure and comfortable future!