Canada has several retirement income benefits for senior citizens, including the Old Age Security (OAS) Canada pension. With it, citizens over 65 can receive a monthly payment. If you qualify for the benefit, understanding OAS payment dates and how much you could receive will help you make a budget for your time in retirement.
In this guide, we'll outline the OAS payment dates for 2022. Learn everything you need to know about this benefit to ensure that you receive your OAS payments to help plan your future.
What Is Old Age Security?
Canada has three retirement income plans: Canada Pension Plan (CPP), Employment Pensions Plan, and Old Age Security. Citizens do not have to worry about their employment history or lack thereof to receive monthly OAS payments from the government.
The purpose of the Old Age Security benefit is to supplement retirement income. The primary requirement is that you must be a Canadian citizen over 65 years old. To date, about 6.7 million married and single seniors receive OAS benefits in Canada.
Recipients of OAS payments often qualify for additional government aid through the Guaranteed Income Supplement (GIS). Spouses or partners of low-income OAS recipients between 60 to 64 years old may be eligible for the OAS Allowance program for monthly payments.
Current OAS Payment Dates
The current OAS payment dates for 2022 are as follows:
- January 27, 2022
- February 24, 2022
- March 29, 2022
- April 27, 2022
- May 27, 2022
- June 28, 2022
- July 27, 2022
- August 29, 2022
- September 27, 2022
- October 27, 2022
- November 28, 2022
- December 21, 2022
OAS Payment Dates for 2023
OAS payment dates for 2023 are as follows:
- January 27, 2023
- February 24, 2023
- March 29, 2023
- April 26, 2023
- May 29, 2023
- June 28, 2023
- July 27, 2023
- August 29, 2023
- September 27, 2023
- October 27, 2023
- November 28, 2023
- December 20, 2023
The formula for determining OAS payment dates is the same for every month except December. Benefits will go out to recipients around the third-to-last business day of each month, except for December. People should receive the last payment of the calendar year before Christmas.
Since all Canadian retirement benefits follow the same schedule, OAS payments will be on the same days as CPP payments.
When Is OAS Paid in December 2022?
You should receive your December OAS payment on December 21, 2022. Payments may take up to two business days to arrive, either by direct deposit or cheque.
How Much will OAS Payments Increase in 2023?
Along with CPP, individuals will see their employer contribution rate increase from 5.70% to 5.95%. The contribution rate for self-employed individuals will increase from 11.40% to 11.90%. This is in direct relation to the CPP enhancement implementation.
Eligibility Requirements for OAS Payments
To be eligible for Old Age Security benefits, you must:
- Be at least 65 years old.
- Be a Canadian citizen or resident who spent at least ten years living in the country after turning 18, or
- Be a Canadian citizen or resident who spent at least 20 years in Canada after turning 18 if you currently reside outside of the country.
Service Canada may consider your time abroad as time living in Canada in specific situations. For instance, if you work abroad for a Canadian-based employer, work for an international organization, or reside in a country with a social security agreement with Canada, those years out of the country may apply to your OAS benefits.
OAS Benefits for Canadian Citizens Living Outside the Country
The OAS retirement pension is for Canadian citizens, but you don't have to actively live in the country to receive payments. Due to Canada's social security agreements with several countries, citizens residing in those regions may receive OAS benefits while living abroad. However, you must still meet the eligibility requirements for time spent living in Canada as an adult.
How to Apply for OAS Benefits
If you're approaching your 65th birthday, you may have already begun exploring your retirement income options, including OAS benefits. If you are eligible for OAS payments based on your previous year's income, the Canada Revenue Agency may send you a program enrollment explanation letter by your 64th birthday. The CRA will begin distributing money automatically during the first OAS payment dates after your 65th birthday.
If the Canada Revenue Agency needs more information to complete your enrollment, you'll receive an invitation to apply for OAS payments.
You have two options to complete the application:
- Paper Application: You can download the OAS payment application, complete it, and submit certified copies of the required documentation. The completed application can go to any Service Canada office by mail or physical dropoff.
- Online: You can conveniently complete the application and submit documents through your My Service Canada Account.
Documents and information you'll need to submit with your application form include:
- Proof of marital status, like a certified copy of your marriage certificate or a statutory declaration of a common-law union
- Your Social Insurance Number
- Details about past addresses from age 18 until your current age
- Banking information for direct deposit
- The date you'd like your pension benefits to begin
How Long to Wait to Receive the Initial Payment
You can receive OAS benefits as early as the month after you turn 65. The early payment is contingent on the Canada Revenue Agency processing the application without requiring additional information. Once your benefits are active, you will receive funds by cheque or direct deposit on predetermined OAS payment dates.
Best Time to Apply
Though you will not receive OAS benefits until you reach 65, you don't have to wait until your 65th birthday to apply for the pension. You can start the application process 30 days after turning 64. By starting early, you will have time to set up your My Service Canada Account and make sure you have all the relevant information.
When to Seek Retroactive OAS Payments
If you do not receive OAS benefits starting the month after you turn 65 because you began the pension benefits application process late, you can seek retroactive payments. You can apply for retroactive Old Age Security benefits for up to 12 months.
During the application process, you can choose your ideal OAS payment start date of 12 months prior to the application date or the month of your 65th birthday, whichever is later. For instance, if you apply for benefits during the month of your 66th birthday, you could select a pension start date for the month you turned 65 and get retroactive payments.
However, if you wait too long to apply for benefits, you could miss out on eligible payments regardless of the program's retroactive payments. If you wait until you're 68 to apply for OAS payments, you can only go back to the year you turned 67 for retroactive payments. That leaves you without about two years worth of retirement pension payments.
How Much You Could Receive in OAS Payments in 2023
Though OAS payment dates for 2023 follow the calendar year, the program follows a fiscal calendar. All Old Age Security payment cycles begin in July of each year. The maximum amount a person could receive for the July to September 2023 payment period is $666.83 monthly.
To receive the maximum amount, you must have lived in Canada for a minimum of 40 years as an adult. If you spend less than 40 years actively residing in Canada, you will receive a portion of the maximum amount.
If you are 65 years old or older and have lived in Canada for less than 40 years after turning 18, you may qualify for a partial OAS pension. Service Canada might pay as little as 1/40th of the current maximum pension amount for every adult year you spend in Canada.
Though the payment amount for the first quarter of OAS payments is $666.83, the amount the government pays may vary. Service Canada bases the monthly maximum on the Consumer Price Index, which updates every quarter in January, April, July, and October. Because of the 2023 Consumer Price Index increases, OAS benefits increased by the following amounts:
- 1.1% increase in January
- 1% increase in April
- 2.8% increase in July
OAS pension benefits for people over 75 include a 10% increase in monthly payments. They will receive an extra $800.16 a month.
How Payments Are Calculated
If you're within the eligibility age for OAS and have lived in Canada for less than 40 years, you can estimate how much you could receive in OAS retirement benefits. You'll need to know how many years you lived in the country after turning 18. If you reside in Canada for at least ten years after reaching adulthood, you can use the scale below to learn how much your OAS payments could be:
- 40 years in Canada: 100% benefit eligibility
- 30 years in Canada: 75% benefit eligibility
- 20 years in Canada: 50% benefit eligibility
- 10 years in Canada: 25% benefit eligibility
Service Canada will adjust the payment amount accordingly if you spend an odd number of years in Canada. For instance, an eligible person with 25 adult years in Canada will receive 62.5% of the maximum payment amount, which would be $416.77 monthly.
Your employment history won't affect your OAS payments, but your annual income will. If your household income exceeds the clawback threshold, you will receive less money each month.
About the OAS Clawback Period for 2022
OAS clawback is the common term for the OAS pension recovery tax. The OAS clawback threshold for July 2022 to June 2023 is $79,845. Any OAS benefit recipient who earns more than the clawback threshold will receive a 15% reduction in their monthly Old Age Security benefits based on the amount over the clawback maximum until the payment amount reaches zero.
In other words, anyone who earns $129,757 annually will not receive monetary OAS benefits for the July 2022 cycle. The retirement program's payment cycle runs for 12 months. Your annual income from the previous year will determine how much you will receive in monthly payments.
How to Defer OAS Benefits
If you're nearing retirement age but still earning a decent annual income, receiving OAS payments may not be ideal. Your earnings could exceed the current clawback threshold, leaving you with fewer benefits. In that case, you may choose to defer your payments.
If you choose a deferment, you will receive an extra 0.6% when you begin accepting your benefits. A year-long deferment can earn you an additional 7.2% in payments. The maximum increase is 36% if you wait until 70 to accept OAS payments.
Differences Between OAS and CPP Benefits
CPP, or the Canada Pension Plan, is a taxable retirement pension eligible citizens can apply for to receive monthly payments until they pass away. People often confuse CPP and OAS as the same program because they are both Canadian retirement pensions. However, the programs are different in several ways, including the following:
- OAS is available for people over 65, whereas CPP is for seniors over 60.
- CPP is a contributory retirement plan, whereas OAS is a supplemental retirement pension.
- CPP amounts are based on how much a person contributes to the program during their work history.
- OAS payment amounts will decrease if a person's annual income reaches a specific threshold.
The purpose of the OAS pension is to ensure that long-term Canadian residents over 65 have financial security regardless if they are low-income or middle-class. Even if you are of eligibility age and have no work history, you can still qualify for OAS payments.
CPP payments, on the other hand, depend on how much you contribute to the program while working in Canada. You cannot receive CPP payments if you have no work history by retirement age. However, some citizens are eligible for CPP and OAS payments depending on their age, income, and work history.
Are OAS Benefits Taxable Income?
OAS benefits are taxable income. The money you receive throughout the year for Old Age Security will apply to your annual income. The government will tax your yearly income at the applicable marginal tax rate.
If you receive OAS payments, you'll receive a T4A OAS tax slip by the end of February. However, you can request that the government deduct taxes immediately from your OAS payments via your My Service Canada Account or submit a completed Form ISP3520CPP to a local tax office.
Plans for OAS Benefits in 2023
On April 3, 2023, the Canada Revenue Agency will permanently alter the OAS eligibility age from 65 to 67. The government is changing the age due to many Canadians living longer, healthier lives and working well into their senior years. As such, the age requirement will increase.
Secure Your Financial Future with Insurdinary
You can make better financial decisions for your future with details about the 2022 and 2023 OAS payment dates and how to apply for benefits. However, you may also consider exploring other financial services, including insurance plans and mortgages.
At Insurdinary, we can help you find the best financial products and services for your needs by making it easy to compare prices and benefits from top Canadian providers and lock in the best rates.
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