Unlike CPP, which is based on how much you've worked and contributed, Old Age Security (OAS) is based on how long you've lived in Canada. For newcomers, this distinction is critical to retirement planning.
What Is OAS?
OAS is a monthly payment from the federal government available to Canadians and legal residents aged 65 and over. You don't need to have worked in Canada to receive it. You simply need to have lived here.
In 2025, the maximum monthly OAS payment at age 65 is approximately $727. That's about $8,700/year, not retirement income on its own, but a meaningful foundation.
The 10-Year and 40-Year Rules
To receive any OAS, you must have lived in Canada for at least 10 years after age 18 (if you currently live in Canada) or 20 years (if you live outside Canada when you apply).
To receive the full OAS, you must have 40 years of Canadian residency after age 18. If you have fewer than 40 years, you receive a prorated amount.
Example: If you arrived in Ottawa at age 45 and apply for OAS at 65, you have 20 years of Canadian residency. You'd receive 20/40 = 50% of the maximum OAS.
This is why arriving in Canada earlier in life significantly improves your OAS entitlement.
OAS and the Guaranteed Income Supplement (GIS)
If you receive OAS and your annual income is low (under approximately $22,000 for singles in 2025), you may also qualify for the Guaranteed Income Supplement (GIS): an additional tax-free monthly payment. GIS can add another $800–$1,000/month for very low-income seniors.
For newcomers who arrive later in life and have limited CPP accumulation, GIS can be a meaningful safety net.
When Can You Take OAS?
- Age 65: Standard, apply 6 months before your 65th birthday
- Age 70: If you delay, OAS increases by 0.6% per month (up to 36% more)
Delaying OAS is usually advantageous if you have other income sources and expect a long retirement.
The OAS Clawback (Recovery Tax)
If your income exceeds approximately $90,000/year (the 2025 threshold), OAS starts to be "clawed back" at 15 cents per dollar over the threshold. If your income exceeds about $148,000, OAS is fully eliminated. This affects higher-income retirees, not most newcomers.
How Foreign Pensions Interact with OAS
If you receive a pension from your home country, it may partially reduce your GIS eligibility. However, it typically does not reduce OAS directly. Canada has tax treaties with many countries that determine how foreign pensions are taxed in Canada.
Applying for OAS
Service Canada automatically enrolls many Canadians for OAS. If you haven't received an enrolment letter by age 64, apply proactively at canada.ca or at the Service Canada office on 360 Albert Street in Ottawa.
Planning Tip
Track your years of Canadian residency. This affects both your OAS entitlement and GIS eligibility. Keep immigration documents and tax returns that can prove residency history if needed.
