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Seniors - Old Age Security-Overview

7-11-2016

The Old Age Security program is the Government of Canada's largest pension program. It is funded out of the general revenues of the Government of Canada, which means that you do not pay into it directly.

 

 

The Old Age Security (OAS) pension is a monthly payment available to most Canadians 65 years of age who meet the Canadian legal status and residence requirements. You must apply to receive it.

In addition to the Old Age Security pension, there are three types of Old Age Security benefits:

  • Guaranteed Income Supplement
    If you live in Canada and you have a low income, this monthly non-taxable benefit can be added to your OAS pension.
  • Allowance
    If you are 60 to 64 years of age and your spouse or common-law partner is receiving the Old Age Security pension and is eligible for the Guaranteed Income Supplement, you might be eligible to receive this benefit.
  • Allowance for the Survivor
    If you are 60 to 64 years of age and you are widowed, you might be eligible to receive this benefit.

Canadians working outside Canada for Canadian employers

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 for the Old Age Security pension, you must have returned to Canada within six months of ending employment or have turned 65 years old while still employed.

You must provide:

  • proof of employment from the employer; and
  • proof of physically returning to Canada.

Under certain conditions, spouses, common-law partners, dependants and Canadians working abroad for international organizations may also count time spent abroad as residence in Canada.

Eligibility

Your employment history is not a factor in determining eligibility: you can receive the OAS pension even if you have never worked or are still working.

If you are living in Canada, you must:

  • be 65 years old or older
  • be a Canadian citizen or a legal resident at the time we approve your Old Age Security pension application, and
  • have resided in Canada for at least 10 years after turning 18.

If you are living outside Canada, you must:

  • be 65 years old or older
  • have been a Canadian citizen or a legal resident of Canada on the day before you left Canada, and
  • have resided in Canada for at least 20 years after turning 18.

If neither of the above scenarios applies to you, you may still qualify for an Old Age Security pension from another country, from Canada, or from both countries if you have:

  • lived in one of the countries with which Canada has established a social security agreement, or
  • contributed to the social security system of one of the countries with which Canada has established a social security agreement.

How much could you receive

The amount of your Old Age Security (OAS) pension will be determined by how long you have lived in Canada after the age of 18.

For the period from July 1 to September 30, 2016, the maximum OAS pension amount is $573.37.

OAS benefits are adjusted quarterly (in January, April, July and October) if there are increases in the cost of living as measured by the Consumer Price Index.

If you have a low income, you may be eligible to also receive the Guaranteed Income Supplement.

The amount of your Old Age Security (OAS) pension will be determined by how long you have lived in Canada after the age of 18.

 

How the Old Age Security pension is calculated

Full pension

You may qualify for a full Old Age Security pension in one of two ways:

  • on July 1, 1977, you resided in Canada, or
  • on July 1, 1977, you did not reside in Canada but after turning 18, you resided in Canada for a period of time prior to July 1, 1977, or
  • on July 1, 1977, you possessed a valid Canadian immigration visa.
  1. You resided in Canada for at least 40 years after turning age 18, or
  2. You were born on or before July 1, 1952, and

In addition, you must have resided in Canada continuously for the 10 years immediately before the approval of your OAS pension. If you were absent from Canada during that 10-year period, you may still qualify for a full pension if:

  • you resided in Canada for at least one year immediately before the approval of your OAS pension, and
  • you had periods of prior residence in Canada that were equal to at least three times the period of absence during the 10-year period (i.e., three years of residence for every year of absence). For example, an absence of two years between the ages of 60 and 62 could be offset by six years of residence in Canada after age 18 and before age 55.

Partial pension

If you do not qualify for the full Old Age Security (OAS) pension, and do not want to wait until you do, you may qualify for a partial OAS pension.

A partial OAS pension is calculated at the rate of 1/40th of the full OAS pension for each complete year of residence in Canada after age 18.

The minimum period of residence in Canada you need to qualify for a partial OAS pension is 10 years after your 18th birthday (as long as you reside in Canada when you receive your OAS pension). For example, if you resided in Canada for 10 years after your 18th birthday, you may qualify to receive 10/40ths or one-quarter of the full OAS pension.

Footnotes: Footnotes: This column is presented as a general source of information only and is not intended as a solicitation for business. Mohammed Yasin, CPA,CGA, is the principal of M. Yasin & Co. Inc., Certified General Accountants and has offices in Vancouver & Surrey,B.C.

Article Source: ALAMEENPOST.COM