Old Age Security (OAS) is one of the pillars of retirement income in Canada. Learning how it interacts with other benefits is vital if you want to better guide your clients through retirement planning.
In this article, Wealth Professional Canada will discuss how Old Age Security works and who qualifies. We’ll also talk about how payments are calculated and adjusted and what you should consider when helping your clients decide when to start their pension.
OAS is a taxable government pension for people in Canada who are 65 or older. It is not based on work history. Your clients can receive it even if they have never worked in Canada or are still employed in retirement.
The government pays OAS every month for as long as the person lives if they continue to meet the residency and other program conditions. The amount is linked to income. In general, the higher your client’s income, the lower their OAS benefit.
At higher income levels, Old Age Security can be reduced to zero. This reflects the intent of the program, which is to support those who need income support later in life.
Low-income seniors can also receive additional support through the Guaranteed Income Supplement. On the contrary, high-income seniors might see their OAS reduced or not receive it at all.
To learn more about OAS, watch this video:
Raising the retirement age can affect when individuals become eligible to receive OAS benefits, potentially delaying the start of their payments.
OAS is designed to keep pace with inflation. The government reviews payment amounts four times a year: in January, April, July, and October. These regular reviews use the Consumer Price Index to track changes in the cost of living.
When the cost of living rises, OAS payments are increased to match that change. If the cost of living goes down, payments are not reduced. This means that your clients do not see their Old Age Security go down in nominal terms even during periods of falling prices.
This structure can provide an income stream that can help your clients keep up with inflation in retirement, at least to some extent. It is not a complete solution to inflation risk, but it does offer some protection without the risk of cuts if prices move lower.
In many cases, Service Canada enrolls eligible people for OAS automatically. If they have enough information on file, they will send a notice to confirm that OAS will begin.
If your clients do not receive any letter about OAS in the month after turning 64, they might need to submit an application. If they assume enrollment is automatic when it is not, their pension can be delayed.
As a financial advisor, you can add value by reminding your clients to look out for that letter at 64 and to apply promptly if it does not arrive. That small action can prevent months of missed payments.
Eligibility for OAS is based on age, legal status, and time lived in Canada, not employment history. If your clients are living in Canada, they must:
If your clients live outside Canada, they must:
Time spent working abroad for a Canadian employer can still count as residence in Canada for OAS purposes.
This can apply when your clients work outside the country for employers such as Canadian banks or the Canadian Armed Forces. For this time to count as residence in Canada, your clients must satisfy one of the following conditions:
To use this rule, your clients need two pieces of documentation:
There are also circumstances where time abroad can count for spouses, common-law partners, dependents, and those who work for certain international organizations.
Even if none of the conditions above apply to your clients, they can still qualify for Old Age Security or a foreign pension. They might be eligible if they have lived in, or contributed to, the social security system of a country that has a social security agreement with Canada.
Watch this video to learn more about OAS eligibility:
Find out how couples can maximize their OAS benefits in this article.
From October to December 2025, a person between ages 65 and 74 can qualify for a full OAS pension. They can receive $740.09 per month as long as their 2024 net world income is under $148,451.
Once your clients reach 75, the maximum increases to $814.10 per month, provided their 2024 net world income is under $154,196.
Not everyone gets the same OAS amount. The figure will depend on your clients’ age, income, period of residency, and other factors. Since these elements vary per client, the OAS amounts that they will receive will also differ.
The government begins to reduce your Old Age Security payments once your net world income goes over a certain threshold. This threshold changes each year with inflation. The reduction is called recovery tax but it’s more commonly known as clawback.
For the October to December 2025 period, OAS is fully clawed back when income reaches specific levels based on 2024 net world income.
Your clients aged 65 to 74 lose their Old Age Security once their 2024 net world income reaches $148,451. This is the upper limit for receiving up to $740.09 per month.
Those aged 75 and over lose their OAS once their 2024 net world income reaches about $154,196. This is the upper limit for receiving up to $814.10 per month.
Your clients can receive their first OAS payment the month after they turn 65. If they choose a later start date, they will receive their first payment on the specific date they selected.
If your client is already over 65 when applying, there is the possibility of a retroactive payment. The program can pay up to 11 months of Old Age Security in arrears, counting back from the date the application is received.
However, if your client chose to delay starting OAS, they cannot receive retroactive payments for the period they chose to defer. The deferral gives them higher monthly payments later, but it does not come with back pay for those months.
OAS does not have to start at 65. Your clients can delay their first payment for up to 60 months after that birthday. In other words, they can defer OAS as late as age 70.
For each month they delay within that five-year window, their OAS amount increases. The longer the delay, the higher the monthly pension.
However, after age 70 there is no gain from deferring further. In fact, your clients risk losing benefits altogether if they do not apply. If a person is over 70 and does not receive Old Age Security yet, the guidance is to apply as soon as possible.
Another important point: if your clients qualify for the Guaranteed Income Supplement, there is no benefit to delaying OAS. The Guaranteed Income Supplement depends on being in receipt of OAS, and its amount does not increase when OAS is deferred.
The choice to delay OAS depends on several factors, including:
Still, this is a planning conversation and not a strict rule that applies to everyone. For some households, higher guaranteed income later might be attractive.
For others, especially those with lower incomes or potential access to the Guaranteed Income Supplement, starting OAS at 65 can be more suitable.
Old Age Security is more than just another line on a retirement income summary. It is a government-backed, inflation-adjusted pension that can support your clients through the later stages of life.
As such, learning about the rules around eligibility, residency, cost of living adjustments, and related benefits is vital. Decisions about when to apply, whether to delay, whether to move abroad, and how to structure household income can all influence the OAS outcome for your clients.
When OAS is used thoughtfully alongside other income sources, it can strengthen retirement security and provide a steady stream of income for the years ahead.
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