A Refresher on Old Age Security Changes

November 4, 2014 RHN CPA No Comments



The Old Age Security (OAS) pension is a monthly payment available to most people who have met the Canadian legal status and residence requirements. You can receive the OAS pension even if you have never worked or are still working. There were some changes to the OAS pension announced in recent years that you should be aware of.

Change #1 – Age of Eligibility

The Government of Canada has introduced measures to gradually increase the age of eligibility for the OAS pension and the Guaranteed Income Supplement (GIS) from 65 to 67. People currently receiving OAS benefits will not be affected by this change.

The Government of Canada also introduced measures to gradually increase the ages at which the Allowance and the Allowance for the Survivor are provided, from 60-64 today to 62-66.

Are the changes necessary?

Canada’s population is aging. The number of Canadians aged 65 and over will rise sharply over the next two decades. However, the working-age population will barely grow at all. Today, there are four working-age Canadians for every senior, by 2030, there will only be two. As a result, younger generations will be forced to carry a greater tax burden.

When will the changes take effect?

The phase-in period will begin by gradually raising the eligibility age by one month every three months, starting on April1, 2023. The six-year phase-in period will allow those affected by these changes time to make adjustments to their retirement plans.

Do these changes affect my CPP?

NO. The CPP is funded through the contributions of employers, employees and the self-employed. The Old Age Security program is funded through general tax revenues.

Change #2 – Option to Voluntarily Defer

As of July 2013, you will have the option to defer receiving OAS pension for up to 60 months (5 years) after the date you become eligible in exchange for a higher monthly payment. By delaying receiving the OAS pension, the monthly pension amount will be increased by 0.6% for each month, up to a maximum of 36% at age 70. As the age of eligibility for OAS pension is gradually increased, the period during which you can defer will increase from 65-70 years of age to 67-72 years of age.

Who can benefit from deferring their OAS pension?

People who are still working and those who can afford to wait to receive OAS pension. Also, people who are earning more than the maximum annual income allowed have to repay part or their entire OAS pension.

If you are already receiving your OAS pension, can you cancel to benefit from deferral?

Yes and no. You may request to cancel your OAS pension if you have been receiving your OAS pension for less than 6 months. To cancel, you must provide a written request within 6 months of receiving your first payment. You will also be required to repay the pension and any related benefits you have received.

When should I apply for deferral?

You can apply up to 11 months before you want your OAS pension to start. Your deferred OAS pension will start on the date you indicate in writing on the application form.

Change #3 – Automatic Enrollment for OAS Pension

Service Canada has implemented a process to automatically enroll seniors who are eligible to receive their OAS pension. If you can be automatically enrolled, Service Canada will send you a notification letter the month after you turn 64. If you do not receive this letter, you must complete and mail the application forms.


The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.

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