Understanding the Old Age Security Program in Canada

The Basics of the OAS Program

The Old Age Security (OAS) program in Canada provides a modest pension to most Canadians at age 65 if they have lived in the country for at least 10 years after turning 18. It's the largest pension program in Canada, and it's funded out of the general revenues of the Government of Canada, which means it's not dependent on the work history of the individual, unlike the Canada Pension Plan (CPP). The OAS is crucial because it acts as a basic level of income security for Canadian seniors, thus ensuring that no individual has to face the golden years without financial support.

Qualifying for the OAS Program

To qualify for the full OAS pension, you must have lived in Canada for at least 40 years after turning 18. However, those who haven't lived in Canada for this amount of time may qualify for a partial OAS pension. This is helpful for individuals who may have immigrated to Canada later in life and have yet to accumulate 40 years of residence. In these cases, one must live in Canada for a minimum of 10 years after turning 18.

Determining the Amount of OAS Pension

The amount you will receive from your OAS pension depends on how long you have lived in Canada after the age of 18. If you've lived in Canada for at least 40 years after turning 18, you may qualify for a full pension. As of April 2020, the maximum monthly OAS pension amount is $613.53. However, this amount can change quarterly as it is adjusted for the cost of living as measured by the Consumer Price Index.

The Process of Applying for the OAS Pension

When to Apply for the OAS Pension

Canada's Old Age Security pension can be applied for within the six months leading up to your 65th birthday. It should be noted that the pension is not automatically granted. This means you must apply for it, and if you qualify, it can be paid as early as the month following your 65th birthday. If your application is approved later, the pension will be paid retroactively for up to a maximum of 11 months, but not before the month of your 65th birthday.

Preparing Your Application for the OAS Pension

While preparing your application for the OAS pension, gather all necessary paperwork such as your birth certificate, your Social Insurance Number (SIN), the date you became or expect to become a citizen or a legal resident of Canada, and your employment status and marital status, among other things. These documents serve to confirm your eligibility for the OAS pension.

Submitting Your OAS Pension Application

You can submit your OAS pension application online, by mail, or in person at any Service Canada Centre. If you decide to submit your application by mail, ensure to keep a copy of your completed form and all documents you include with your application for your records. This ensures that your application will be processed faster and more accurately.

Understanding the Impact of Leaving Canada on Your OAS Pension

Effects on Your OAS Pension If You Leave Canada Temporarily

If you leave Canada temporarily after receiving the OAS pension, your payments will not stop, but they may be affected based on the duration of your absence. If people lived in Canada for 20 years after they turned 18, they can receive their full OAS pension for as long as they are out of the country. If they lived less than 20 years in Canada, the pension will be paid for six months after the day they left. After that, the payment stops unless they have resided in Canada when the payments stopped.

Impacts on Your OAS Saving If You Move Abroad Permanently

If you decide to move abroad permanently, the OAS pension will be paid outside Canada for six months after the departure day. After six months, benefits will stop unless you have lived in Canada for at least 20 years after turning 18. In that case, you may get OAS benefits outside Canada for the whole duration of your stay or every time you return and live in Canada.

Other Circumstances Affecting OAS Pension Payments

There are several other circumstances that might affect your OAS pension payments. For instance, if your net world income surpasses a certain threshold, the Government of Canada may apply the OAS pension recovery tax, leading to a reduction or cancellation of your OAS pension. Furthermore, if you're incarcerated for more than two years, OAS pension payments will be suspended until your release.