Old Age Security (OAS) is a monthly benefit that the Canadian government provides to eligible seniors aged 65 and older. It is one of the main sources of income for many retirees, along with the Canada Pension Plan (CPP) and personal savings. However, there is a lot of confusion and misinformation about how much OAS pays and how it changes over time. In this article, we will fact-check some of the common claims and questions about OAS, such as:
- Is OAS payment increasing to $1867 per month starting from 1st January 2024?
- What is the actual increase in Old Age Security?
- Are CPP and OAS the same?
- When are the OAS payment dates for 2024?
- How can you maximize your OAS benefits?
Is OAS payment increasing to $1867 per month starting from 1st January 2024?
Verdict: False
This claim is based on a misleading YouTube video that has been circulating online. The video claims that OAS payments will increase by 10% for seniors aged 75 and over, resulting in a monthly payment of $1867. However, this is not true. The 10% increase is only applicable to the maximum OAS pension amount, which is not what most seniors receive. The actual amount of OAS payment depends on how long you have lived in Canada and your income level.
According to the government of Canada, the maximum OAS pension amount for January to March 2024 is $713.34 for seniors aged 65 to 74, and $784.67 for seniors aged 75 and over². These amounts are adjusted quarterly based on inflation. The average OAS payment in October 2022 was $514.56³. Therefore, the claim that OAS payment will increase to $1867 per month is false and exaggerated.
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What is the actual increase in Old Age Security?
Verdict: True
The government of Canada announced in July 2021 that the OAS pension will increase by 10% for seniors aged 75 and over, starting from July 2022⁴. This means that full pensioners who are 75 or older will get more than $800 extra over the first year. The government also announced a one-time payment of $500 in August 2021 for seniors who are or will be 75 or older by June 2022⁴. These measures are part of the government’s commitment to support seniors and help them cope with the rising cost of living.
The OAS pension is also indexed to inflation every three months, meaning that it increases or decreases based on the changes in the Consumer Price Index (CPI). For the first quarter of 2024, the OAS pension increased by 1.3%, bringing the maximum monthly OAS pension amount to $713.34 for seniors aged 65 to 74, and $784.67 for seniors aged 75 and over.
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Are CPP and OAS the same?
Verdict: False
CPP and OAS are two different programs that provide retirement income to Canadians, but they have different eligibility criteria, funding sources, and benefit amounts. Here are some of the key differences between CPP and OAS⁵:
- CPP is a contributory pension plan, meaning that you have to pay into it through your earnings and employment. OAS is a non-contributory pension program, meaning that you do not have to pay into it directly.
- CPP is based on your earnings and contributions history, meaning that the more you earn and contribute, the higher your pension will be. OAS is based on your residency and income level, meaning that the longer you live in Canada and the lower your income, the higher your pension will be.
- CPP is funded by employee and employer contributions, as well as investment returns. OAS is funded by general tax revenues.
- CPP offers retirement, disability, survivor, and children’s benefits. OAS offers a basic pension, as well as supplementary benefits such as the Guaranteed Income Supplement (GIS), the Allowance, and the Allowance for the Survivor.
When are the OAS payment dates for 2024?
Verdict: True
The OAS payment dates are set by the government and are usually paid in the last week of each month. In 2024, the payment dates are as follows⁶:
- January 29, 2024
- February 27, 2024
- March 26, 2024
- April 26, 2024
- May 29, 2024
- June 26, 2024
- July 29, 2024
- August 28, 2024
- September 25, 2024
- October 29, 2024
- November 27, 2024
- December 20, 2024
You should receive your direct deposit on these dates. If you receive paper cheques, you should allow a few business days for delivery by mail.
How can you maximize your OAS benefits?
Verdict: True
There are some strategies that you can use to maximize your OAS benefits, such as:
- Delaying your OAS pension: You can choose to start receiving your OAS pension anytime between the ages of 65 and 70. If you delay your OAS pension, you will receive a higher amount for each month you wait. For example, if you delay your OAS pension until age 70, you will receive 36% more than if you start at age 65⁷.
- Minimizing your income: Your OAS pension is subject to a recovery tax or clawback if your income exceeds a certain threshold. In 2023, the clawback applies if your income is higher than $81,761⁸. To avoid or reduce the clawback, you can minimize your income by using tax-efficient savings accounts, such as Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs), or by splitting your income with your spouse or common-law partner.
- Applying for supplementary benefits: If you have a low income, you may be eligible for additional benefits, such as the Guaranteed Income Supplement (GIS), the Allowance, or the Allowance for the Survivor. These benefits provide a monthly payment on top of your OAS pension, and are not subject to the clawback. However, you have to apply for these benefits separately from your OAS pension, and you have to renew your application every year.
Conclusion
Old Age Security is a valuable source of income for many Canadian seniors, but it is also a complex and evolving program. It is important to stay informed and updated on the changes and facts about OAS, and to plan your retirement accordingly. By doing so, you can ensure that you receive the maximum benefits that you are entitled to, and enjoy a comfortable and secure retirement.
Source: (1) Old Age Security: How much you could receive – Canada.ca. https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/benefit-amount.html. (2) Cpp and oas payments – Everything You Need to Know. https://canpension.ca/articles/cpp-and-oas-payments-everything-you-need-to-know.