OAS Payment Boost to $1,615 in January 2025: Who Can Claim It?

In January 2025, old age security will increase monthly benefits for Canadian seniors. For those above 75 years old, the amount received is up to $1,615 per month. For the 65- to 74-year-old seniors, the amount will be up to $1,500 per month.

This adjustment is part of the government’s effort to address inflation and enhance financial stability for retirees. Whether you’re already receiving OAS or planning to apply soon, it’s crucial to understand these changes, eligibility criteria, and how to make the most of these benefits.

OAS Payment Increased to $1,615 in January 2025

AspectDetails
New Payment AmountsAges 65-74: $1,500; Ages 75+: $1,615
Effective DateJanuary 2025
Eligibility CriteriaBased on age, residency, and income
Clawback ThresholdIncome exceeding $90,997 in 2024 subject to partial repayment
Application ProcessAutomatic for some; online or paper application for others
Official ResourceCanada.ca OAS

What Is the Old Age Security (OAS) Program?

Old Age Security (OAS) is a very integral part of the public pension system in Canada. It offers a monthly benefit to the elderly to cover their living costs in retirement. OAS is not like the Canada Pension Plan, which is not funded from contributions made from working years. Instead, it is funded from general tax revenues. Millions of Canadian seniors depend on OAS as an important source of income that helps them secure their financial lives in old age.

What’s New in January 2025?

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The new payment increase is intended to allow elderly people to buy the same as their money goes further due to the continued rising cost of living.

  • 75 years and older: $1,615 a month
  • This is 10% more that was introduced in 2022.
  • 65-74 years: maximum monthly benefit $1,500
  • This is one of the measures the government takes towards assisting the elderly and reducing inflation.

Qualifying Conditions for OAS

1. Age Qualification

  • You must be over 65 to qualify for your OAS pension.
  • Those age 75 years and older have qualified for top-up payment including the 10% increase applicable since 2022.

2. Residency Requirements

  • To qualify for full pension, on approval of an application, an individual must be either a Canadian citizen or a landed immigrant.
  • Individuals applying for partial pension shall have lived at least 10 years in Canada after attaining age 18.
  • To become eligible for a full pension, you must have been a resident in Canada for 40 years after the age of 18.
  • In some countries that have social security agreements with Canada, the time spent there may be added to your residency.

3. Income Thresholds

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  • Beneficiaries may also have to pay a recovery tax, also known as the “OAS clawback,” on their OAS benefits if their income for the year exceeds $90,997 (as of 2024).
  • For each dollar over that, 15 cents must be repaid, so your OAS payment could fall to zero if you earn very high incomes.
  • This means the system will pay benefits to only those who are most in need of them.
  • How to apply for OAS

4. Automatic Registration

  • Many seniors are registered automatically for OAS. You will receive notice of your automatic registration if you qualify. You need do nothing further.

5. Voluntary Registration

If you are not automatically registered, you may register through:

  • Online: You can apply online, using your My Service Canada Account.
  • By Mail: Download an application form from the Service Canada website. Make sure you attach all the documents required, including identification and proof of residency, because if you do not, your application will only be delayed.

What If You Miss an OAS Payment?

You can defer OAS payments for as long as five years after becoming eligible. Your payment will rise by 0.6% for each month of deferral, to a maximum of 36% at age 70.

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  • If your OAS payment at age 65 is $1,500, deferring until age 70 could push your monthly payment up to about $2,040.
  • It can be an excellent way to maximize the benefit for those who can afford to wait to start receiving payments.

Extra Benefits: Guaranteed Income Supplement (GIS)

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Older low-income recipients of OAS are also eligible for GIS, a non-taxable monthly benefit, for additional financial help.

GIS Qualification:

  • You must be already receiving OAS benefits.
  • Your income has to be below the set limits:
  • Earning $22,056 as a single, widowed or divorced recipient.
  • Earning under $29,136 for married or common-law couples receiving OAS benefits
  • Earning under $52,848 for married or common-law couples in which only one person receives OAS benefits.
  • GIS payments are automatically adjusted based on your reported income. So, it’s straightforward for the recipient.

Getting the Most from OAS

Keep Your Information Current:

Keep your address and banking information-and other personal data-current with Service Canada. Otherwise, your payments can be delayed or in error.

Keep Track of Your Income:

If your income is close to the clawback threshold, consider methods for reducing taxable income by making contributions to a Tax-Free Savings Account or, if eligible, by claiming expenses.

Be Informed on Tax Considerations:

The OAS payments are taxable and should be reported as income on your annual tax return. Tax planning can be effective in minimizing liabilities.

Consider Deferring Payments:

Delaying OAS payments means the benefits paid monthly will be substantially greater. It is particularly helpful for those who have other forms of retirement income.

Consider Extra Benefits:

Consider also GIS or provincial assistance as supplementary programs to support your bottom line.

Consult a Financial Advisor:

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Work with a professional to develop a retirement plan that works within your budget and maximizes your benefits.
This is seen in the increase in OAS payments to $1,615 from January 2025, especially as the Canadian government continues striving to protect the earnings of seniors amidst inflation and upticks in living costs. Knowledge of eligibility and deferral options will empower informed decision making on maximizing your benefits.

Whether you’re preparing to apply for OAS or already enrolled, now is the perfect time to review your financial plan and ensure all your information with Service Canada is up-to-date. Proactive planning can provide peace of mind and greater financial stability in your retirement years.

FAQ’s

Q. When will the increased OAS payments be issued?

A. The increased payment amounts will start in January 2025. Deposits are typically made on the last business day of each month.

Q. Can I continue receiving OAS if I move outside of Canada?

A. Yes, you can receive OAS payments while living abroad, provided you lived in Canada for at least 20 years after turning 18. Ensure that Service Canada has your current foreign address to avoid payment disruptions.

Q. Are OAS payments subject to taxes?

A. Yes, OAS payments are taxable and must be declared on your income tax return. Effective tax planning strategies can help reduce your tax liabilities.

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