In January 2025, the Canadian government raised the maximum Old Age Security (OAS) payment to $1,615 per month, providing much-needed relief to retirees facing rising living costs.
Designed to support seniors financially, OAS is a universal benefit for Canadian citizens and legal residents who meet specific age and residency requirements.
Here’s everything you need to know about this increase, eligibility criteria, application steps, and tips to maximize your benefits.
What Is the Old Age Security (OAS) Program?
OAS is a government-funded monthly payment available to seniors in Canada, regardless of their work history.
Unlike the Canada Pension Plan (CPP), OAS is not based on employment earnings but rather on age, residency, and income.
With the new maximum payment of $1,615, the program is keeping pace with inflation and ensuring that retirees have greater financial stability in an era of economic uncertainty.
Who Is Eligible for the Increased $1,615 Payment?
To qualify for OAS payments, you must meet the following requirements:
Basic Eligibility
- Age Requirement: You must be at least 65 years old. Payments start the month after your 65th birthday.
- Residency:
- Must have lived in Canada for at least 10 years after turning 18.
- Canadian citizenship or legal residency is required at the time of application.
Full vs. Partial OAS
| Type of Payment | Residency Requirement |
|---|---|
| Full OAS | At least 40 years of residency after age 18. |
| Partial OAS | Based on years of residency, with a minimum of 10 years. |
Example: If you’ve lived in Canada for 20 years after turning 18, you’ll receive 50% of the full OAS benefit.
Understanding the OAS Clawback
The OAS Recovery Tax, or clawback, reduces payments for individuals with higher incomes. For 2024, the clawback threshold starts at $86,912 of annual income.
How the Clawback Works
- Income Over Threshold: $90,000
- Excess Income: $90,000 – $86,912 = $3,088
- Clawback Amount: 15% of $3,088 = $463.20
To minimize the clawback, strategies include income splitting with a spouse, deferring payments, or contributing to RRSPs to lower taxable income.
How to Apply for OAS
Most Canadians are automatically enrolled in OAS when they turn 64. However, if you’re not automatically enrolled, follow these steps:
Step 1: Automatic Enrollment
If you qualify, Service Canada will notify you by mail. If you don’t receive confirmation, you may need to apply manually.
Step 2: Manual Application
- Online: Use your My Service Canada Account (MSCA) to apply.
- Paper Application: Download and complete the OAS application form from the Government of Canada website.
- Submit Documentation: Include proof of age and residency, if required.
Step 3: Approval and Payments
Once approved, payments begin the month after you turn 65. Notifications about the status of your application will be sent via mail or through your MSCA.
Deferring OAS Payments
You can defer your OAS payments for up to five years to increase your monthly benefit by 0.6% per month (or 7.2% annually). Over five years, this results in a 36% increase in payments.
Example: Deferred Payments
| Scenario | Monthly Payment |
|---|---|
| Standard Payment | $1,615 |
| Deferred (5 years) | $2,194.40 |
This option is ideal for individuals who have other sources of income or plan to work past 65. However, it’s important to evaluate the trade-off between deferring payments and immediate financial needs.
Why the $1,615 Increase Matters
The increase to $1,615 reflects the government’s commitment to addressing rising living costs for seniors. With inflation affecting housing, healthcare, and daily essentials, this adjustment ensures retirees can maintain financial independence and stability.
Additional Benefits
- Guaranteed Income Supplement (GIS): For low-income OAS recipients, providing extra monthly assistance.
- Allowance: Available to individuals aged 60–64 married to or widowed from an OAS recipient.
These programs work alongside OAS to create a more comprehensive safety net for Canadian seniors.
Tips to Maximize Your OAS Benefits
- Minimize Taxable Income: Contribute to RRSPs or Tax-Free Savings Accounts (TFSAs).
- Consider Income Splitting: Lower your taxable income by splitting pension income with a spouse.
- Deferral Strategy: Delay OAS payments to maximize monthly benefits.
- Stay Informed: Regularly check the Service Canada website for updates on thresholds and benefits.
The $1,615 OAS payment in January 2025 offers Canadian seniors an opportunity to better manage their retirement finances.
Whether you’re planning to claim now or defer for higher payments, understanding eligibility and strategies can help you maximize your benefits and secure financial stability in retirement.
