The Old Age Security (OAS) pension provides retirement income security for seniors because it maintains its value over time, even as prices increase.
Today, Canada's Minister of Seniors, Deb Schulte, announced the highest quarterly adjustment to existing OAS payments since July 2014. She also confirmed that the Government of Canada will deliver the $500 one-time payment to older seniors, announced in Budget 2021, during the week of August 16, 2021.
This summer's one-time payment of $500 will support older seniors' higher expenses, and will apply to 3.3 million seniors who are eligible for the OAS pension in June 2021 and were born on or before June 30, 1947. No action is required by seniors, who will automatically receive the payment if they are eligible.
In July 2021, OAS benefits will automatically increase 1.3%, bringing the maximum monthly OAS pension amount to $626.49, up from $618.45. Over the coming year, the increase is worth up to $96.48.The Guaranteed Income Supplement (GIS) and the Allowances will also be adjusted for inflation.
Budget 2021 also included a permanent increase of 10% to the OAS pension, to be implemented in July 2022 for seniors aged 75 and over. This will provide an additional $766 to full pensioners over the first year, and will be the first permanent increase to the OAS pension since 1973, other than adjustments due to inflation. It builds on measures to support all seniors, which include restoring the age of eligibility for the OAS pension and the GIS to 65 from 67, strengthening the Canada Pension Plan for future retirees, increasing the GIS for single seniors, raising the GIS earnings exemption and reducing income taxes for all Canadians.
Quotes
"The Government is continuing to improve the financial security of Canadians in retirement after a lifetime of hard work. Increasing Old Age Security for older seniors helps all Canadians with their extra needs later in life. While no single solution can meet every need, step by step our progressive measures are making a real difference in the lives of seniors. Canadian seniors can always count on us to listen, understand their needs and work hard to deliver for them."
- Minister of Seniors, Deb Schulte
"Canada's pension system is designed to provide benefits that reflect changes in the cost of living, with payments only ever increasing or staying the same. They will never go down. This helps seniors enjoy the financially secure and dignified retirement they deserve."
- Stéphane Lauzon, Parliamentary Secretary to the Minister of Seniors
Quick facts
-
Seniors are the fastest-growing demographic age group in Canada. By 2030, the number of seniors is expected to reach 9.4 million, representing close to one quarter of Canada's population.
-
In 2020 and 2021, the Government is providing $5.5 billion in additional direct financial support to seniors, through a $1.3 billion one-time GST credit in April 2020, $2.5 billion for a one-time OAS/GIS payment in July 2020 and $1.7 billion for the one-time payment to older seniors in August 2021.
-
Older seniors face higher costs. As seniors age, their health and home care costs rise, all while they are more likely to have disabilities, be widowed or be unable to work.
-
Most seniors have low and modest incomes. About 84% of OAS pensioners have individual incomes below $50,000.
-
The objective of the Old Age Security program is to ensure a minimum income for seniors and help reduce the incidence of low income among Canada's seniors. The OAS benefits include: the OAS pension; which is paid to all individuals aged 65 and older who meet the residence requirements; the GIS for low-income seniors; and the Allowances for low-income Canadians aged 60 to 64 who are the spouses or common-law partners of GIS recipients, or who are widowed or widowers.
-
The maximum OAS pension is payable to seniors aged 65 and over who lived in Canada for at least 40 years after age 18. Partial pensions are payable if they lived in Canada for at least 10 years or qualified under International Social Security Agreements.
-
All OAS benefits (the OAS pension, the GIS and the Allowances) are indexed on a quarterly basis in January, April, July and October so benefits don't lose value over time. Increases to OAS benefits are calculated using the Consumer Price Index, which measures changes in prices paid by Canadian consumers for goods and services, and is the most widely used indicator of price changes in Canada. If the cost of goods and services goes down, OAS benefits do not decrease. OAS payment amounts will only increase or stay the same. Historical values are available on the Open Data portal.
-
As a result of automatic indexation, the annual value of the monthly OAS pension has increased to $7,516 per year from $6,404 per year over the past decade.
