As with the Canada Pension Plan (CPP), the Old Age Security (OAS) pension is an important part of Canada’s retirement income system. Old Age Security payments are available to any Canadian citizen or legal resident of Canada that is over the age of 65 and has lived in Canada for at least 10 years after the age of 18.
To receive a full OAS pension, you must have lived in Canada for at least 40 years after the age of 18. Those who have lived in Canada less than 40 years, but more than 10, can still receive a partial pension. So how much you can receive for a full pension? As of right now, the maximum benefit is $516.96. These rates are reviewed 4 times a year to adjust for changes in the cost of living, based on the Consumer Price Index.
There are some tax implications to be aware of with Old Age Security. If your retirement income is more than $66,335 (this amount is adjusted once a year) you then have to repay 15% of any income over that limit. For example, if your income is $76,335, you would be $10,000 over and your maximum pension of $6,203.52 would be reduced by $1,500 to $4,703.52 a year, or $391.96 a month. This is known as the OAS clawback. At the current rates, $107,692 of income is the point where you will have completely eliminated the OAS payment. Lower income earners may also be eligible for the Guaranteed Income Supplement (GIS), with is an additional monthly payment for incomes less than $37,584.
Old Age Security and the Canada Pension Plan, at a combined annual payout of about $25,000 per couple, are an excellent foundation to your retirement planning.
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Tom Drake is the owner and head writer of Canadian Finance Blog.
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[...] If your and your spouse’s income are about the same, and you both have similar pensions and RRSP savings, then this wouldn’t be of any benefit to your retirement planning. However, if one spouse is in a higher tax bracket or expects a large pension at retirement, it would make sense for that spouse to contribute to a spousal RRSP. As a couple they would receive a larger tax deduction that year and the income at retirement would be more even, keeping both of them in a lower tax bracket for further tax savings and possibly avoiding an OAS clawback. [...]
[...] what you ask for . . . with lower taxes, what will we lose? Will we lose health care? How about Old Age Security? What about our roads and our [...]
Hi if i LOST my OAS for having a higher income due to selling my business Do i have to re apply the next year when my income was only $25.000.00 thanks G
[...] Cyndi has no pension and only $60,000 in her RRSPs. They will both qualify for Old Age Security (OAS) as well as Canada Pension (CPP) but Rick will get more CPP than [...]
The briefing on the OAS was necessary and I’m sure the older generation deserves this aid for their medical or personal support. The clauses for receiving the OAS is written clearly and is definitely beneficial. The readers can guide their parents or old friends about OAS and help them.
Pension Release is a flexible alternative to purchasing an annuity. Tax–free cash and pension fund are very interesting.
PLS. HELP, MY OAS WAS SUSPENDED BECAUSE THEY DID NOT RECIEVE A QUESTIONAIRE IN TIME, IT WARNED ME IF I DO NOT REPLY WITHIN 10 DAYS I WILL BE CANCELLED. I LIVE IN PHILIPPINES WTH MY FAMILY AND DELIVERY TIME CAN BE UP TO 21 DAYS AND REPLY 21 DAYS. I DID REPLY BY REGULAR MAIL AND CALLED CANADA PENSION,EXPLANED SLOW MAIL SERVICE AND WILL SEND AGAIN BY REGISTERED MAIL.CALLED CAN, PENSION AGAIN THEY CONFIRMED THEY DID RECIEVE MY QUESTIONAIRE.AND THIER IS NO PROBLEM NOT TO WORRY.THAT WAS IN APRIL 2011,THEY CUT MY PENSION FOR AUGUST 2011 SO I LEFT PHILIPPINES TO GO TO THAILAND FOR NEEDED HEART OPERATION.NOW I HAVE MOUNTING MEDICAL EXPENSIVES IN NEED OF MY $500.00 TO PAY BILLS.I DONT UNDERSTAND HOW THEY CAN MAKE SENIORS SUFFER HARDSHIPS
i wanted to know how much will i work limited a year ..correct $4 thousand dollars a year..thank you..
My husband get CCP and OAS ,but both is not over $1000/month.Can he apply for Guaranteed Income Supplement?