If you’re nearing retirement or currently planning for it, understanding Old Age Security (OAS) is essential. This Canadian government program provides monthly payments to eligible individuals to help support their income. In this article, we’ll cover who qualifies for OAS, how the payments work, and the OAS payment schedule for 2024.
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Overview of Old Age Security (OAS)
Old Age Security (OAS) is a pension program run by the Canadian government. It aims to support people aged 65 and older by providing regular financial assistance. This is one of the sources of income for seniors, alongside the Canada Pension Plan (CPP) and personal savings. Both CPP and OAS payments are issued on the same dates, making it easier for seniors to manage their finances.
OAS Payment Schedule for 2024
Here are the payment dates for OAS in 2024:
- January 29, 2024
- February 27, 2024
- March 26, 2024
- April 26, 2024
- May 29, 2024
- June 26, 2024
- July 29, 2024
- August 28, 2024
- September 25, 2024
- October 29, 2024
- November 27, 2024
- December 20, 2024
Funding for OAS
The Old Age Security program is entirely funded by the federal government. Unlike the Canada Pension Plan (CPP), Canadians do not contribute directly to this fund through deductions from their income. Instead, OAS is financed through general tax revenues, ensuring that eligible seniors receive support regardless of their work history.
Who Can Receive OAS?
To qualify for OAS, you must meet specific requirements:
- Age: You must be 65 years or older.
- Citizenship: You must be either a Canadian citizen or a legal resident of the country.
- Residency: The number of years you have lived in Canada affects your eligibility:
- If you live in Canada, you need to have resided in the country for at least 10 years after turning 18.
- If you live outside of Canada, the requirement extends to 20 years.
Enrolling in OAS
In most cases, enrollment in the OAS program happens automatically. You should receive a letter in the mail the month after you turn 64 confirming your enrollment. However, if you don’t receive any notification, you may need to apply manually by submitting a form to Service Canada. Applications can be done online or via a paper form.
Additional benefits may be available depending on your circumstances, such as if you are widowed or if your spouse qualifies for the Guaranteed Income Supplement (GIS).
How Much Will You Receive in OAS?
OAS payments are adjusted every quarter (January, April, July, and October) to keep up with inflation, which means that the amount can change depending on the Consumer Price Index (CPI). However, if the cost of living decreases, your OAS payments will remain unchanged.
The amount you can expect to receive depends on several factors:
- Years Lived in Canada: If you have lived in Canada for 40 years or more after turning 18, you may qualify for the maximum OAS benefit. Partial OAS benefits are available if you meet the minimum residency requirement of 10 or 20 years, depending on whether you live inside or outside Canada.
- Starting Age: While you can start receiving OAS at 65, you can also delay the payments for up to five years. By delaying, you can increase your monthly payments by 0.6% for each month you defer. For instance, if you start receiving OAS at 70, your payments could be up to 36% higher.
- Your Income: If your net income exceeds a certain limit, some or all of your OAS payments might be subject to clawback, meaning you’ll need to repay a portion through the pension recovery tax.
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Should You Delay OAS Payments?
Whether or not to delay your OAS payments depends on your personal circumstances. If you expect to continue working after 65 or have other sources of income, delaying OAS may be a good option to increase your monthly payments. However, delaying beyond the age of 70 doesn’t offer any further advantages, so it’s important to start receiving payments by then.
Are OAS Payments Taxable?
Yes, Old Age Security payments are considered taxable income. You can choose to have taxes automatically deducted from your payments or make quarterly tax payments to avoid a larger tax bill at year-end.
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