Overview of the Old Age Security Program

The Old Age Security program is one of the cornerstones of Canada's retirement income system. Benefits include the basic Old Age Security pension, the Guaranteed Income Supplement, the Allowance, and the Allowance for the Survivor. After briefly describing the program's history and overall features, each of the specific benefits is described in turn.

Legislative history: The Old Age Security Act came into force in 1952, replacing legislation from 1927 requiring the federal government to share the cost of provincially-run, means-tested old age benefits.

The Act has been amended many times. The most important changes have been:

• the drop in age of eligibility from 70 to 65 (phased-in between 1965-1969);
• the establishment of the Guaranteed Income Supplement (1967);
• the introduction of full annual cost-of-living indexation (1972);
• quarterly indexation (1973);
• the establishment of the Spouse's Allowance (1975);
• payment of partial pensions based on years of residence in Canada (1977);
• the inclusion of Old Age Security in international social security agreements (1977 and ongoing);
• the extension of the Spouse's Allowance to all low-income widows and widowers aged 60 to 64 (1985);
• maximum of one year of retroactive benefits (1995);
• the ability for an individual to request that their benefits be cancelled (1995);
• the extension of benefits and obligations to same-sex common-law partners (2000); and
• the simplification of access to and delivery of benefits (2007).
• the suspension of benefits for beneficiaries incarcerated in federal penitentiaries as a result of a sentence of two years or more and for beneficiaries incarcerated in provincial and territorial correctional facilities as a result of a sentence of 90 days or longer. (2010)

Funding: The Old Age Security program is financed from Government of Canada general tax revenues.

Administration: Service Canada, under the Department of Human Resources and Skills Development Canada (HRSDC) administers the Old Age Security program through regional offices located throughout Canada. The International Operations Division in Ottawa, as its name suggests, is responsible for benefits stemming from Canada's International Social Security Agreements (see International Benefits).

Indexation: All benefits payable under the Old Age Security Act are adjusted in January, April, July and October if there are increases in the cost of living as measured by the Consumer Price Index.

Payment outside Canada: Once a full or partial Old Age Security pension has been approved, it may be paid indefinitely outside Canada, if the pensioner has lived in Canada for at least 20 years after reaching 18 years of age. Otherwise, payment may be made only for the month of a pensioner's departure from Canada and for six additional months, after which payment is suspended. The benefit may be reinstated if the pensioner returns to live in Canada and meets all conditions of eligibility.

The Guaranteed Income Supplement and the Allowance may be paid outside Canada for only six months following the month of departure from Canada regardless of the length of time you have lived in Canada.

Reconsidering and appealing a decision: Old Age Security clients may request an explanation or a reconsideration of any decision that affects their eligibility or the amount of their Old Age Security pension. This request must be made in writing to their Regional Director of Income Security Programs within 90 days of receiving a decision. If not satisfied with the decision of the Regional Director, the client may appeal, again within 90 days and in writing, to the Office of the Commissioner of Review Tribunals. If the grounds of appeal are income related, the appeal will be referred to the Tax Court of Canada for a decision.

See more information on The Old Age Security Appeals Process.

On April 1, 2010, administrative penalties under the Canada Pension Plan and the Old Age Security Act came into force.

The penalty provision imposes monetary penalties on individuals (an applicant, a beneficiary, or a third party) who receives or tries to receive benefits by knowingly providing false or misleading information or omitting information.

The interest provision came into force on April 1, 2011. This provision gives the Minister of Human Resources and Skills Development Canada the authority to charge interest on monetary penalties and on overpayments that are subject to a penalty.

Service Canada’s disclosure policy allows individuals to come forward and correct inaccurate or incomplete information.

About the interest provision:

• The rate of interest is the Bank of Canada average rate plus three percentage points. Interest is calculated daily and compounded monthly.
• Interest starts accumulating 120 calendar days after the Department has sent a demand for payment in writing.
• This 120-day period allows individuals the time to appeal the decision that originally led to a penalty and/or to negotiate a repayment schedule.
• The Department will not charge interest on either the penalty or the associated overpayment amount as long as there is a monthly payment made according to a repayment schedule.
• You have the right to appeal the penalty amount and/or the circumstances that gave rise to the penalty by requesting a reconsideration of the decision. To do this, you must make a request in writing within 90 days of having been notified of the penalty.

Old Age Security Pension

The Old Age Security pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or over. Old Age Security legal status and residence requirements must also be met. An applicant's employment history is not a factor in determining eligibility, nor does the applicant need to be retired. Old Age Security pensioners pay federal and provincial income tax. Higher income pensioners also repay part or all of their benefit through the tax system.

Eligibility conditions: To qualify for an Old Age Security pension, a person must be 65 years of age or over, and

1. must be a Canadian citizen or a legal resident of Canada on the day preceding the application's approval; or

2. if no longer living in Canada, must have been a Canadian citizen or a legal resident of Canada on the day preceding the day he or she stopped living in Canada.

A minimum of 10 years of residence in Canada after reaching age 18 is required to receive a pension in Canada.

A minimum of 20 years of residence in Canada after reaching age 18 is required to receive a pension outside of Canada.

*The residence requirement may be met under the terms of a Social Security Agreement.

Beneficiaries incarcerated as a result of a sentence of two years or longer in federal penitentiaries or a sentence of 90 days or longer in provincial or territorial correctional facilities may not receive OAS benefits while incarcerated. Read more.

Amount of benefits: The amount of a person's pension is determined by how long he or she has lived in Canada, according to the following rules:

1. A person who has lived in Canada, after reaching age 18, for periods that total at least 40 years, may qualify for a full Old Age Security pension;

2. A person who has not lived in Canada for 40 years after age 18 may still qualify for a full pension if, on July 1, 1977, he or she was 25 years of age or over, and

   • lived in Canada on July 1, 1977; or

   • had lived in Canada before July 1, 1977, after reaching age 18; or

   • possessed a valid immigration visa on July 1, 1977.

In such cases, a person must have lived in Canada for the 10 years immediately prior to approval of the Old Age Security pension application. Absences during this 10-year period may be offset if, after reaching the age of 18, the applicant lived in Canada before those 10 years, for a period of time that was at least three times the length of absence. In this case, however, the applicant must also have lived in Canada for at least one year immediately prior to the date of the application's approval. For example, an absence of two years between the ages of 60 and 62 could be offset by six years of residence or presence after age 18 and before reaching age 55.

Absences from Canada: Canadians working outside Canada for Canadian employers, such as the armed forces and banks, may have their time working abroad counted as residence in Canada. To qualify, the person must have returned to Canada within six months of ending employment or have turned 65 years old while still employed. Both proof of employment from the employer as well as proof of physically returning to Canada, if only for one day, must be provided. Under certain conditions, this provision may also apply to spouses, common-law partners, dependents and Canadians working abroad for international organizations.

A person who cannot meet the requirements for the full Old Age Security pension may qualify for a partial pension. A partial pension is earned at the rate of 1/40th of the full monthly pension for each full year lived in Canada after his or her 18th birthday. Once a partial pension has been approved, it may not be increased as a result of added years of residence in Canada.

Late applicants of the Old Age Security pension as well as the Guaranteed Income Supplement and Allowance may receive retroactive payments. Old Age Security, Guaranteed Income Supplement and Allowance payments may be made for up to 11 months plus the month in which we receive the application, provided all conditions of eligibility are met.

Old Age Security clients can request that their Old Age Security benefits be cancelled. They can have them reinstated at a later date. However, in such cases, no retroactive payments will be permitted.

Guaranteed Income Supplement

The Guaranteed Income Supplement is a monthly benefit paid to eligible residents of Canada who receive a basic, full or partial Old Age Security pension and who have little or no other income. Guaranteed Income Supplement payments may begin in the same month as Old Age Security pension payments. Recipients must re-apply annually for the Guaranteed Income Supplement benefit by filing an income statement or by completing an income tax return by April 30. Thus, the amount of monthly payments determined for the year may increase or decrease according to reported changes in a recipient's yearly income. Unlike the basic Old Age Security pension, the Guaranteed Income Supplement is not subject to income tax. The Guaranteed Income Supplement is not payable outside Canada beyond a period of six months after the date of departure, regardless of how long the person has lived in Canada.

Eligibility conditions: To receive the Guaranteed Income Supplement benefit, a person must be receiving an Old Age Security pension. The yearly income of the applicant or, in the case of a couple, the combined income of the applicant and spouse or common-law partner, cannot exceed certain limits.

Exception: Sponsored immigrants from countries with which Canada has agreements are not eligible for Guaranteed Income Supplement and Allowance during their sponsorship period (up to a maximum of 10 years) unless he/she:

• has 10 years of residence in Canada after the age of 18; or
• had resided in Canada as a Canadian citizen or permanent resident on or prior to March 6, 1996, became eligible for benefits January 1, 2001 or earlier; or
• was receiving benefits under the Old Age Security Act for the month of March 1996 or earlier.

If you are the spouse or common-law partner of an incarcerated beneficiary whose OAS benefits have been suspended during his or her incarceration, you are still entitled to receive the Guaranteed Income Supplement if you meet the eligibility requirements.

While your spouse or common-law partner is incarcerated, your GIS benefit may be increased to the same amount that single-income beneficiaries receive. Read more.

Amount of benefits: The amount of the Guaranteed Income Supplement to which a person is entitled depends on his or her marital status and income.

Income for Guaranteed Income Supplement purposes is defined the same way as it is for federal income tax purposes, with a few specific exceptions - the most important of which is Old Age Security pension income. Income, therefore, includes any other money which a pensioner receives, such as an earnings-related retirement pension, foreign pensions, interest, dividends, rents, wages or workers' compensation payments. If married or living in a common-law relationship, the combined income of the pensioner and spouse or common-law partner must be taken into account.

A deduction of $3500 against employment income is allowed. Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums may also be deducted from employment income.

Generally, income earned in the previous calendar year is used to calculate the amount of benefits paid in a payment year, which is from July of one year to June of the next year. However, if a pensioner or spouse or common-law partner has retired or has suffered a loss or reduction of pension income, an income estimate of any pension or employment income for the current calendar year may be substituted for the pension or employment income of the preceding calendar year. This estimate is added to all other types of income from the preceding calendar year.

There are two basic rates of payment for the Guaranteed Income Supplement. The first applies to single pensioners - including widowed, divorced or separated persons; and to married pensioners whose spouses or common-law partners do not receive either the basic Old Age Security pension or the Allowance. The second applies both to legally married couples and couples living in common-law relationships, where both spouses or common-law partners are pensioners. The Guaranteed Income Supplement single rate is higher than the Guaranteed Income Supplement married rate. However, each spouse or common-law partner in a couple is entitled to a benefit, so the combined benefits for a couple are higher than those for a single person.

If a person is receiving a partial Old Age Security pension, the maximum Guaranteed Income Supplement may be increased by the difference between that partial pension and the full Old Age Security pension.

For a single, widowed, divorced or separated pensioner, the maximum monthly supplement is reduced by $1 for every $2 of other monthly income.

If both spouses or common-law partners in a couple are receiving the Old Age Security pension, the maximum monthly supplement of each pensioner is reduced by $1 for every $4 of their other combined monthly income.

There is one exception to these two basic rates - for a couple in which only one spouse or common-law partner is a pensioner and the other is not in receipt of either the basic Old Age Security pension or the Allowance. In this case, the pensioner can receive the Guaranteed Income Supplement at the higher rate paid to those who are single. Moreover, the maximum monthly supplement is reduced by $1 for every $4 of the couple's combined monthly income, excluding, as usual, the pensioner's Old Age Security benefit.

Sponsored and non-sponsored immigrants: Newcomers with less than 10 years of residence in Canada who qualify for Old Age Security under a social security agreement will have their Guaranteed Income Supplement/ Allowance entitlement grow gradually over 10 years - 1/10th of the benefit for each year of residence. This includes:

• persons who have not resided in Canada for 10 years after the age of 18;
• sponsored immigrants who's sponsorship agreement has broken down.

Allowance and Allowance for the Survivor

The Allowance, which also includes an allowance for persons whose spouse or common-law partner has died, is paid monthly. It is designed to recognize the difficult circumstances faced by many survivors and by couples living on the pension of only one person.

Recipients must re-apply annually. These benefits are not considered as income for income tax purposes. If the recipient leaves Canada, the Allowance is not payable outside Canada beyond a period of six months after the month of departure, regardless of how long the person lived in Canada.

Eligibility conditions: The Allowance may be paid to the spouse or common-law partner of an Old Age Security pensioner, or to a survivor. To qualify, an applicant must be between the ages of 60 and 64 and must have lived in Canada for at least 10 years after turning 18. The residence period may also be met through the terms of an international Social Security Agreement. An applicant must also have been a Canadian citizen or a legal resident of Canada on the day preceding the application's approval. To qualify, the combined yearly income of the couple, or the annual income of the survivor, cannot exceed certain limits which are established quarterly. The Old Age Security and Guaranteed Income Supplement benefits are not included in their combined yearly income, for the purpose of income-tested benefits only.

The Allowance stops when the recipient becomes eligible for an Old Age Security pension at age 65, if the beneficiary leaves Canada for more than six months, or dies. It also stops if the pensioner ceases to be eligible for the Supplement or if the spouses or common-law partners separate or divorce. In addition, the Allowance for the Survivor stops if a survivor remarries or lives in a common-law partnership for more than 12 months.

Exception: A sponsored spouse or common-law partner of an Old Age Security pensioner or a survivor between 60 and 64 with less than 10 years of residence in Canada after reaching age 18 is not eligible for the Allowance benefit for the period of his or her sponsorship, up to a maximum of 10 years.

Sponsorship Agreements are considered broken when/if:

• the sponsor dies;
• the sponsor goes bankrupt;
• the sponsor is sentenced to prison for more than six months;
• the sponsor is convicted of an offence related to the sponsoring individual.

If you are the spouse or common-law partner of an incarcerated person whose OAS benefits have been suspended during his or her incarceration, you are still entitled to receive the Allowance if you meet the eligibility requirements.

While your spouse or common-law partner is incarcerated, your Allowance benefit may be calculated based on individual income. Read more.

Amount of benefits: The Allowance is an income-tested benefit. The legislated formula used to calculate these benefits cannot be fully explained here, however here is a brief description. The maximum amount payable to the spouse or common-law partner of a pensioner is equal to the combined full Old Age Security pension and the maximum Guaranteed Income Supplement at the married rate. The maximum amount for a person whose spouse or common-law partner has died is somewhat higher. The maximum monthly Allowance is reduced by $3 for every $4 of the beneficiary's monthly income for a widowed spouse or common-law partner or the couple's combined monthly income. This happens until the Old Age Security-equivalent is reduced to zero. Then, for a couple, both the Guaranteed Income Supplement-equivalent portion of the Allowance and the pensioner's Guaranteed Income Supplement are reduced by $1 for every additional $4 of the couple's combined monthly income. For a survivor, the Guaranteed Income Supplement-equivalent portion is reduced by $1 for every additional $2 of monthly income.

Sponsored and non-sponsored immigrants: The Allowance benefit is prorated in the case of a person who has not resided in Canada for 10 years after reaching age 18, and for sponsored immigrants whose sponsorship agreement has broken down.

Sponsorship Agreements are considered broken when/if:

• the sponsor dies;
• the sponsor goes bankrupt;
• the sponsor is sentenced to prison for more than six months;
• the sponsor is convicted of an offence related to the sponsoring individual.

Entitlement will be established at the rate of 1/10th of the benefit for each year of residence in Canada after reaching age 18 and will be increased by an additional 1/10th for each additional year of residence in Canada.

Other public retirement benefits

If you made at least one valid contribution to either the Canada Pension Plan or the Quebec Pension Plan, you will be eligible for a retirement pension at age 65. If you have retired or substantially reduced your hours of work, you could qualify for a reduced retirement pension as early as age 60.

Disability benefits and survivor benefits are also available under the Canada Pension Plan and the Quebec Pension Plan if sufficient contributions have been made. You must apply to receive any of these benefits.

For more information on the Quebec Pension Plan, visit the Web site of the Régie des rentes du Québec.

You may be entitled to benefits under the Employment Insurance Program.

Other benefit programs for veterans

If you are a veteran, you may also be entitled to receive benefits under other federal programs such as the War Veterans Allowance program. For more information, call Veterans Affairs Canada toll-free at 1-866-522-2122, or visit the Veterans Affairs Canada's Web site.

Provincial/territorial and municipal programs

Your provincial/territorial and municipal governments may offer income assistance and services to seniors. For more information, please contact these governments directly.

Additional information on federal, provincial and territorial programs for seniors is also available on the Seniors Canada Web site.

More Information

For more information about the Old Age Security Program and the Canada Pension Plan, please contact us.

Have your Social Insurance Number on hand when you call.

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