The Old Age Security pension (OAS) is a critical component of the Canadian retirement system. This blog aims to clarify the essential details of the OAS, including its eligibility criteria, benefit calculation, and implications for both residents and non-residents. 

What is the Old Age Security Pension?  

The OAS is funded by the Canadian government’s tax revenues, meaning there is no need to contribute directly to benefit from it. It is the government’s most significant retirement plan, providing financial support to the elderly. 

Eligibility Criteria  

To be eligible for the OAS, there are several criteria to meet. One must be 65 years or older, be a Canadian citizen or a legal resident, and have lived in Canada for at least 10 years after the age of 18. For those living abroad, additional conditions apply, such as having lived in Canada for at least 20 years after turning 18. 

Full and Partial Pension  

The OAS offers two types of pensions: a full pension and a partial pension. The full pension is awarded to those who have lived in Canada for at least 40 years after turning 18. The partial pension is calculated as 1/40th of the full pension for each year of residence in Canada after 18. 

Implications for Non-Resident  

Seniors Non-resident seniors receiving the OAS might have to pay a recovery tax if their income exceeds a certain threshold. They must file the Old Age Security Income Declaration to determine if they are subject to this tax. 

The OAS is an essential pillar of the Canadian retirement system. Understanding its eligibility criteria, benefit calculation, and implications for both residents and non-residents is crucial for effective and secure retirement planning. 

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