The differences between OAS and the CPP
The Old Age Security program (OAS) provides a basic pension to almost everyone over 65 who has lived in Canada for at least 10 years. Supplements to the program - the Guaranteed Income Supplement and the Allowance - provide additional income for low-income seniors.
The Canada Pension Plan (CPP) provides retirement income to those who have worked and made contributions to the Plan. The amount of CPP pension depends on how much and for how long a person has contributed and in some cases, the age a person chooses his/her payment to begin. It also provides contributors and their families with disability benefits, survivor benefits and benefits for children.
Together, these two programs form an important part of Canada’s retirement income system.
Old Age Security (OAS) program - an important foundation
Old Age Security provides a basic pension to almost everyone over 65 who has lived in Canada for at least 10 years. The amount you will receive depends on how long you have lived in Canada and your current income. Old Age Security Payment Rates are adjusted quarterly to reflect any increases in the cost of living as measured by the Consumer Price Index.
Guaranteed Income Supplement
The Guaranteed Income Supplement (GIS) provides additional support for low-income OAS pensioners. It provides a modest supplement to the OAS pension. To see the current Guaranteed Income Supplement rates, visit Old Age Security Payment Rates.
OAS pensioners’ spouses or common-law partners who are low-income and between the ages of 60 and 64 may qualify for the Allowance. The amount you receive will depend on the combined income of you and your spouse or common-law partner.
The Allowance for the survivor is a monthly allowance available to low-income survivors who are between the ages of 60 and 64. The amount you receive will depend on how much income you have at that time.
To see the current benefit rates, visit Old Age Security Payment Rates.
Canada Pension Plan – more than just retirement income
Almost all working Canadians over the age of 18 pay into the Canada Pension Plan (CPP). Your contributions to the CPP provide you and your family some financial protection.
As a CPP contributor and depending on your circumstances, you or your family may be entitled to the following benefits:
If you have contributed to the Plan for a minimum number of years and if you become ill or disabled such that you cannot work at any job on a regular basis, you may be able to receive a monthly disability benefit. Learn more about how to qualify for disability benefits.
If you or your spouse or common-law partner dies or starts receiving a CPP disability benefit, your children under age 18 may also be able to receive benefits. If your children are between the ages of 18 and 25 and attend school, like college or university full time, they may also be able to receive children’s benefits. To qualify, you, the parent must have contributed to the CPP for a minimum number of years.
Survivor benefits for your surviving spouse or common-law partner
When you die, if you have contributed to the Plan for a minimum number of years, your surviving spouse or common-law partner may be able to receive a monthly survivor’s pension.
A lump-sum death benefit
Upon your death, if you have contributed to the Plan for a minimum number of years, your estate will receive a one-time, lump-sum payment of up to $2,500.
You can receive a CPP retirement pension as early as age 60. The amount of your pension will depend on how much and for how long you have contributed to CPP, as well as the age you choose your pension to begin.
To get your retirement pension before age 65, you must have stopped working or at least reduced your earnings from work before your pension begins. Once you begin to receive your pension, you can return to any amount of paid work without affecting the payment. However, at that point, you would not be able to contribute to the CPP on any future earnings.
Here’s an example of a monthly retirement pension: If you have lived and worked in Canada most years between age 18 and 65 and earned about the average Canadian wage ($39,100 in 2002), at age 65 you would receive a CPP retirement pension of about $788 a month.
The minimum age for receiving a CPP retirement pension is 60. There is flexibility, but the age at which you decide to start your pension affects the amount.
- If you apply before age 65, your pension will be reduced by 0.5% per month, up to a maximum of 30%.
- If you start your pension after age 65, it will be increased by 0.5% per month, up to a maximum of 30%.
To see the current rates for all monthly CPP benefits, visit Canada Pension Plan Payment Rates.
My pension will not start automatically. When should I apply?
We recommend that you apply about six months before you want your pension to begin. For OAS and CPP pensions you must apply in writing. For other CPP benefits, apply as soon as the need arises. You can view or print an application form from this web site. If you have any questions please call 1 877 454-4051.
If you are hearing or speech-impaired and use a telecommunications device for the deaf (TDD), please call 1 800 255-4786.
- The differences between OAS and the CPP
- Old Age Security – what you need to know
- Canada Pension Plan – what you need to know
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