Canadian Retirement Income Calculator - Frequently Asked Questions about Old Age Security

Frequently Asked Questions about Old Age Security

  1. Will the Old Age Security pension be there for me?
  2. The Old Age Security program is sometimes referred to as the cornerstone of Canada's retirement income system. Why?
  3. How is my Old Age Security pension different from my Canada Pension Plan retirement pension?
  4. What if my income is low?
  5. What happens if I lived or worked outside Canada?
  6. Do I have to apply to start receiving my Old Age Security pension or Canada Pension Plan retirement pension?
  7. Will my Old Age Security pension be reduced if my income is high?
  8. Is my Old Age Security taxable?
  9. Is an Old Age Security pension indexed to an increase in prices?

1) Will the Old Age Security pension be there for me?

Yes. You can count on the Old Age Security pension to be there for you. Old Age Security costs will grow as the population ages in the coming decades. However, these cost increases are projected to be affordable. Changes were made to the Old Age Security program in Budget 2012 to ensure its long-term sustainability. For additional information, please consult our website.

2) The Old Age Security program is sometimes referred to as the cornerstone of Canada's retirement income system. Why?

The Old Age Security pension is one of the primary sources of income for Canadian seniors. In 2011, approximately 22 percent of the total income received by seniors came from the Old Age Security program (including the Guaranteed Income Supplement). A further 19 percent of seniors' total incomes came from the Canada Pension Plan/Quebec Pension Plan. Together, public pension programs provided approximately 41 percent of the total income of Canada's seniors in 2011, providing a modest base for the retirement of many Canadian families.

3) How is my Old Age Security pension different from my Canada Pension Plan retirement pension?

You become entitled to an Old Age Security pension by living in Canada for at least 10 years after the age of 18. The basic Old Age Security pension starts at the age of 65 currently. Old Age Security pensions are paid from the general revenues of the Government of Canada.

To be entitled to a Canada Pension Plan retirement pension, you must have worked and made contributions to the Canada Pension Plan. Both you and your employer make equal contributions. If you are self-employed, you pay both portions. The Canada Pension Plan retirement pension can start as early as 60 or as late as 70.

4) What if my income is low?

If you are receiving the basic Old Age Security pension, you may also be eligible for the Guaranteed Income Supplement if your income is low.

Spouses and common-law partners of Old Age Security pensioners who are receiving the Guaranteed Income Supplement may receive the Allowance between the ages of 60 and 64. Similarly, widows and widowers in this age group who have low incomes may also receive the Allowance for survivor.

You must apply for the Guaranteed Income Supplement or the Allowance.

5) What happens if I lived or worked outside Canada?

Absence from Canada

Canadians working outside Canada for Canadian employers may have their time working abroad counted as residence in Canada. To qualify, you must have returned to Canada within six months of ending employment or have turned 65 while still employed outside Canada. Under certain conditions, this provision may also apply to spouses, common-law partners, dependents, students and Canadians working abroad for international organizations.

Social security agreements with other countries

Canada has agreements with many countries that can help you get social security benefits from either country. If you did not live or work long enough in one country to qualify for benefits there, the time you spent in that country may still be considered when determining your eligibility to receive benefits from either country.

If you lived or worked in another country, please visit our website.

6) Do I have to apply to start receiving my Old Age Security pension or Canada Pension Plan retirement pension?

For many pensioners, neither your Old Age Security or Canada Pension Plan retirement pensions start automatically. You must apply for benefits.

In April 2013, Service Canada implemented a process to automatically enroll seniors who are eligible to receive the Old Age Security pension.

If you can be automatically enrolled, Service Canada will send you a notification letter the month after you turn 64. If you do not receive this letter, you must apply for your Old Age Security pension.

7) Will my Old Age Security pension be reduced if my income is high?

Yes, depending on your income. In accordance with the Income Tax Act, if your net income before adjustments (line 234 on your tax return) exceeds $75,910 (for the 2019 income year), you may have to repay part or all of your Old Age Security pension. Your repayment calculation is based on the difference between your income and the threshold amount for the year. The first step is to figure out how much higher your income is than the threshold. You must repay 15 percent of that amount. This threshold is adjusted annually for account for the impacts of inflation.

Most seniors receive the full Old Age Security pension. In fact, only around 2% of seniors lose the entire amount. This reduction does not apply to Canada Pension Plan benefits.

8) Is my Old Age Security taxable?

Yes. The basic Old Age Security pension is taxable and must be reported as income on your tax return.

The Guaranteed Income Supplement and Allowance are not taxable. They must also be reported on your tax return.

9) Is an Old Age Security pension indexed to an increase in prices?

Yes, the payment amounts for Old Age Security, Guaranteed Income Supplement, Allowance and Allowance for the Survivor are reviewed every three months (in January, April, July and October) to reflect increases in the cost of living as measured by the Consumer Price Index. For more information, please consult our website.

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