Old Age Pension Payment: In Canada, old age security and pension programs form an essential part of retirement planning. They provide monthly income support to seniors who have contributed to the workforce and the social security system for years. Understanding how the Old Age Pension Payment works helps retirees make informed financial decisions, ensuring stability and peace of mind during their golden years.
Understanding Old Age Pension in Canada
The Old Age Pension (OAP) in Canada refers primarily to the Old Age Security (OAS) program, a government-funded pension that provides monthly payments to eligible seniors aged 65 and older. Unlike the Canada Pension Plan (CPP), which is based on contributions during one’s working life, OAS is funded through general tax revenues and does not require contributions.
Both OAS and CPP work together to form the foundation of public retirement income in Canada.
Key Components of Canada’s Pension System
Canada’s public pension system includes two main parts:
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Old Age Security (OAS): A monthly payment available to seniors aged 65 or older, regardless of work history, as long as eligibility requirements are met.
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Canada Pension Plan (CPP): A contributory pension that pays retirees, survivors, and disabled persons based on the amount and duration of contributions made through employment.
Some seniors also receive additional supplements like the Guaranteed Income Supplement (GIS), Allowance, and Allowance for the Survivor, especially those with lower incomes.
Eligibility Criteria for Old Age Pension Payment
To receive OAS payments, certain conditions must be met:
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Age Requirement: You must be 65 years or older.
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Legal Status: You must be a Canadian citizen or a legal resident at the time your application is approved.
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Residency Requirement: You must have lived in Canada for at least 10 years after turning 18 to qualify for payments while living in Canada.
To receive OAS payments outside Canada, you must have lived in the country for at least 20 years after turning 18.
If you do not meet the full residency requirement, you may still qualify through international social security agreements, depending on your work history abroad.
How Much You Can Receive
The amount you receive through Old Age Pension Payment depends on your residency and income level. As of 2025, the maximum monthly OAS pension for most Canadians aged 65 to 74 is around $713.34, while seniors aged 75 and older receive slightly more to reflect higher living costs.
A partial pension may be available for those who have lived in Canada for at least 10 years but less than 40 years. The calculation is based on the ratio of years lived in Canada to 40 years.
Example:
| Years lived in Canada | OAS amount received (of full pension) |
|---|---|
| 10 years | 25% |
| 20 years | 50% |
| 30 years | 75% |
| 40 years | 100% |
Income Threshold and OAS Clawback
High-income earners may face an OAS recovery tax, often called the OAS clawback. This means that if your annual net income exceeds a certain threshold (around $90,000 in 2025), part or all of your OAS payment will be reduced. The clawback ensures that pension benefits go primarily to those who need them most.
Applying for Old Age Pension Payment
Most Canadians do not need to apply for the Old Age Pension manually, as the government may automatically enroll you based on your information with Service Canada. You’ll receive a letter outlining your eligibility and payment start date.
However, if you don’t receive this letter before turning 65, you must apply online or by mail using the OAS application form. Applications can be submitted online through your My Service Canada Account (MSCA).
Tip: Apply at least six months before your 65th birthday to ensure timely payments without delays.
Payment Schedule and Method
OAS payments are made monthly, usually on the third-to-last banking day of each month. You can choose to receive payments directly in your bank account through direct deposit or by cheque, though direct deposit is faster and more secure.
For retirees living abroad, the payment dates remain the same, though processing times may vary depending on international banking systems.
Additional Benefits for Low-Income Seniors
Besides the main OAS pension, lower-income seniors may qualify for:
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Guaranteed Income Supplement (GIS): For OAS recipients with little or no additional income.
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Allowance: For spouses or common-law partners aged 60 to 64 of OAS pensioners receiving GIS.
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Allowance for the Survivor: For widowed low-income seniors aged 60 to 64.
These supplements are reviewed annually based on income tax returns and do not require separate reapplication every year.
Deferring Old Age Pension Payments
Eligible seniors can defer their OAS payments for up to five years after turning 65 to increase their monthly amount. For every month you delay receiving OAS, your pension increases by 0.6%, or about 7.2% per year, up to a maximum increase of 36% at age 70.
Deferring OAS is beneficial for those still working or expecting higher pension income later in life.
Tax Implications
OAS payments are considered taxable income, and taxes may be withheld at the source. Beneficiaries can choose how much tax to have deducted to avoid a large bill during tax season. Seniors with modest incomes may qualify for tax credits or benefits that help offset these taxes.
How to Check Your OAS Status and Updates
You can log in to your My Service Canada Account to:
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View payment history and amounts
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Check application status
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Update banking or address details
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Report life changes (such as moving abroad or marital changes)
Staying updated helps prevent interruptions or overpayments that could later require repayment.
FAQs About Old Age Pension Payment in Canada
1. What is the minimum age to apply for Old Age Pension in Canada?
You can apply for OAS at 65 years old, though you may defer payments up to age 70 for increased benefits.
2. Can I receive OAS while living outside Canada?
Yes, if you’ve lived in Canada for at least 20 years after age 18, you remain eligible for payments abroad.
3. Do I have to apply for OAS, or is it automatic?
Many Canadians are automatically enrolled, but if you don’t receive a notification by age 64, you need to apply manually.
4. How often are OAS payments made?
Payments are made monthly, typically on the third-to-last business day of each month.
5. Can I receive both OAS and CPP at the same time?
Yes, OAS and CPP are separate programs, and you can collect both simultaneously if eligible.
Jonathan Blake writes about housing assistance, SNAP, unemployment aid, and federal grants. He focuses on helping low-income families understand how to apply for benefits.