Common menu bar

• Français
• Home
• Contact Us
• Help
• Search
• canada.gc.ca

Breadcrumb

1. Home >
2. Publications and Resources >
3. Service Partners

Canada’s Public Pension system

• Previous
• Table of Contents
• Next

Old Age Security

Old Age Security Pension Background

• Based on age, legal status, and years of residence in Canada
• 2 types of pension - Full and Partial
• Pension is taxable
• May be subject to OAS repayment of pension

Notes 1

Old Age Security - Sustainability

• Financed from general tax revenues of the Government of Canada
• OAS on solid ground – Actuarial studies
• Canada’s Gross Domestic product (GDP) and individual incomes to rise

Notes 2

OAS Pension - Eligibility

• Age - 65 years of age or more
• Legal status and residence requirements
  • Canadian citizen; or
  • A legal resident of Canada (on the day preceding the approval of the application or on the day before the day applicant stopped living in Canada)
• Must apply in writing

Notes 3

OAS Residence Requirements

People living outside of Canada

• Must have been a Canadian citizen or a legal resident of Canada when you left Canada
• Must have resided in Canada for at least 20 years after the age of 18 (can be met through one of Canada’s International Social Security Agreements)

Full OAS Pension

Must:

• Have resided in Canada for at least 40 years after age 18 and before your application is approved; or
• Meet the 10 year residence rule; or
• Meet the “3 for 1” residence rule.

Notes 4

“3 for 1” Residence Rule

Partial OAS Pension

• You do not qualify for a full OAS pension
• 1/40^th of a full OAS pension for each full year of residence in Canada after the age of 18
• Minimum of 10 years residence required (can be met through one of Canada’s International Social Security Agreements)
• Once approved, a partial OAS pension will not be increased following additional years of residence in Canada

OAS Pension Start and End Guidelines

 

 

 

Notes 5

Portability

To have the OAS pension paid outside Canada, you must:

 

OAS Pension – Repayment of Pension

• OAS pension higher-income pensioners
• Net World Income from $64,718 to $104,903 (2008)
• 15% for residents, varies for non-residents
• Based on previous year’s income
• Monthly deductions from OAS pension
• CRA International Tax Services Office

Notes 6

OAS Pension Repayment

Example:

Actual income	$74,246
Net world income	- $64,718
Income affected by Recovery Tax	$10,068

Tax for that year: 15% X $10,068 = $ 1,510.20

Extracted at source: $1,510.20 X 1/12 = $125.85 per month

OAS amount each month: $502.31 – $125.85 = $376.46 (Jan - March 2008)

Notes 7

Old Age Security Program Other Benefits

• Guaranteed Income Supplement (GIS)
• Allowance
• Allowance for the survivor

---

Notes

1. Minimum of 10 years in Canada needed for any OAS benefit to be paid (can be made up with international agreements).

   If you don’t qualify for ‘full’ benefit then a “partial” benefit can be paid to eligible persons at a rate of 1/40th for each established year of residence.

   Financed from general tax revenues of Government of Canada

   Over 4.3 million Canadians were OAS beneficiaries in November 2006

   The OAS benefits and expenditures were $28 billion in 2004-2005

2. Recipients will rise from 4 million to 9.5 million by 2035
   2010 = 2.4% of GDP to pay OAS
   2030 = 3.2%
   2050 = 2.7%
   There is a strong government commitment to OAS and GIS. Poverty among seniors has declined from 21.3% in 1980 to 5.6% in 2004.
   There is also a very large advocacy demographic as the number of seniors increases as the baby boom generation ages.
3. Applicants must have resided in Canada for at least 10 years after age 18.
4. Requirements for both 10 yrs residence rule and “3 for 1” residence rule:
   1. born on or before July 1, 1952; and
   2. have resided in Canada at some point between age 18 and July 1, 1977

   10 yrs – have lived in Canada for the 10 years right before your application is approved

   “3 for 1” residence rule:

   1. must reside in Canada the year before your application is approved
   2. must have 3 years of residence in Canada after age 18 for each year you were absent during the 10 years before your application is approved.
5. Up to 11 months of retroactive payment

   Ends (first of):

   • 7th month after the month client leaves Canada if he/she has less than 20 years of residence i.e. paid for the month of departure and 6 additional months;
   • Month after death (last payment made for the month of death).
   • Month in which the Minister approves the client’s request that pension cease to be payable. (see section 9.1 OAS Act -Minister’s approval to cease)
6. Only 5% of Canadians are currently affected by the Repayment of Benefits (AKA “clawback) and only 2% lose their benefit altogether.
7. For example purposes only

• Previous
• Table of Contents
• Next

Primary navigation (left column)

Date Modified:

2009-12-10