This post is for educational purposes only. PlanSmartFi is not a financial advisor. OAS and GIS rates, thresholds, and eligibility rules are reviewed quarterly and subject to change. Always verify current figures at Canada.ca and consult a qualified professional before making retirement income decisions.
When most Canadians think about government retirement income, CPP is the first thing that comes to mind. But there is a second major program that most seniors receive alongside CPP, and it works in an entirely different way. It is called Old Age Security, and for lower-income retirees, it comes with an important add-on called the Guaranteed Income Supplement.
OAS is one of the most broadly available retirement benefits in Canada. Unlike CPP, you do not need to have worked or contributed anything to receive it. What you do need is time spent living in Canada. This makes it particularly relevant for newcomers, for Canadians who spent years out of the workforce, and for anyone who wants a clearer picture of what their retirement income might actually look like.
This article covers how OAS works, who qualifies, how much you can expect to receive, the OAS clawback, the Guaranteed Income Supplement (GIS), and how to apply for both.
What Is Old Age Security?
Old Age Security is a monthly pension paid by the federal government to eligible Canadians aged 65 and older. It is funded through general tax revenues, not through a dedicated payroll deduction like CPP. That means there is no line on your pay stub for OAS contributions. You do not pay into it directly. The government simply pays it out to qualifying seniors based on their residency history in Canada.
OAS is taxable income. You report it on your tax return just like employment income or CPP. For most recipients, it is one piece of a broader retirement income picture alongside CPP, personal savings, and any workplace pension.
OAS payment amounts are reviewed and adjusted every quarter in January, April, July, and October, based on changes to the Consumer Price Index (CPI). This means OAS keeps pace with inflation over time. Payments never decrease when the cost of living falls, they can only stay the same or increase.
How Much Is OAS in 2026?
The maximum monthly OAS pension for the January to March 2026 quarter is:
- $742.31 per month for seniors aged 65 to 74
- $816.54 per month for seniors aged 75 and over
The higher amount for seniors 75 and over reflects a permanent 10% increase that was introduced in July 2022. This increase was designed to account for the higher costs many older seniors face, including healthcare and long-term care expenses.
Keep in mind that these are maximum amounts for those who qualify for the full OAS pension. If you have lived in Canada for less than 40 years after age 18, you will receive a partial pension based on your years of residency. More on that below.
Who Qualifies for OAS?
To receive the full OAS pension, you must:
- Be 65 years of age or older
- Be a Canadian citizen or legal resident
- Have lived in Canada for at least 40 years after your 18th birthday
If you have lived in Canada for fewer than 40 years, you may still qualify for a partial OAS pension. You need a minimum of 10 years of Canadian residence after age 18 to receive any OAS at all. The partial pension is calculated as a fraction of the full amount: for example, 20 years of residence would qualify you for 20/40ths, or 50%, of the maximum pension.
For newcomers to Canada, this is an important calculation to understand early. Someone who arrives in Canada at age 45 and remains here until they are 65 would have 20 years of Canadian residence, qualifying them for partial OAS. Combined with any CPP earned through employment in Canada, this can still form a meaningful base of retirement income.
Canada also has social security agreements with many countries that allow periods of residence or contributions in another country to count toward OAS eligibility. If you lived and worked in a country with such an agreement before coming to Canada, it is worth checking whether those years can help you qualify. The full list of partner countries is available at Canada.ca.
Do You Need to Apply for OAS?
You may be enrolled automatically. Service Canada will send you a letter around your 64th birthday letting you know whether you have been enrolled automatically or whether you need to apply. If you do not receive this letter within one month of your 64th birthday, contact Service Canada to confirm your status.
If you do need to apply, you can do so online through your My Service Canada Account or by submitting a paper application. It is recommended to apply at least six months before you want your payments to begin.
Deferring OAS: Can You Wait Past 65?
Yes. Similar to CPP, you can delay the start of your OAS pension beyond age 65, up to a maximum of age 70. For every month you defer past 65, your monthly payment increases by 0.6%, for a maximum increase of 36% if you wait until age 70.
Unlike CPP, you cannot start OAS before 65. The deferral option only runs in one direction.
Deferring OAS may make sense in certain situations, particularly if your income in early retirement is high enough to trigger the OAS clawback (described below) or if you expect to live well into your 80s and want a larger monthly amount for longer. It is not the right choice for everyone, and the decision depends on your health, other income sources, and overall retirement plan.
The OAS Clawback: What It Is and Who It Affects
OAS is designed to support all eligible Canadian seniors, but the government does reduce or eliminate it for higher-income retirees through a mechanism officially called the OAS recovery tax, more commonly known as the clawback.
Here is how it works: if your net world income exceeds a set threshold, the CRA recovers a portion of your OAS at a rate of 15 cents for every dollar above that threshold. The recovery is applied to your monthly OAS payments based on the income you reported on your previous year’s tax return.
For the 2026 income year, the clawback begins once your net annual income exceeds $95,323. At that level, your OAS starts to be reduced. If your income is high enough, OAS is reduced to zero entirely. For 2026, the full clawback thresholds are:
- Ages 65 to 74: OAS is fully eliminated at approximately $154,708 in net income
- Ages 75 and over: OAS is fully eliminated at approximately $160,647, reflecting the higher base pension amount for that age group
A few important details about how the clawback works in practice:
It is based on your individual net income, not your household or combined spousal income. This means both you and your spouse can each earn up to $95,323 before either of you faces a clawback.
The income that counts includes your OAS pension itself, as well as CPP, RRIF withdrawals, employment income, investment income, and capital gains. Importantly, TFSA withdrawals do not count as taxable income and do not affect the clawback calculation. This is one reason a well-funded TFSA can be a valuable retirement planning tool for higher-income seniors.
The clawback affects a minority of retirees, but it is worth knowing about, particularly for Canadians who plan to draw from RRSPs or RRIFs, sell investments, or continue working in retirement. Large one-time withdrawals can push income over the threshold even if regular annual income would not.
What Is the Guaranteed Income Supplement (GIS)?
The Guaranteed Income Supplement is an additional monthly payment available to low-income OAS recipients. It is one of the most important and most underused benefits in Canada’s retirement system, particularly among newcomers and seniors with limited savings.
Unlike OAS, GIS is not taxable. You do not report it as income on your tax return, and it does not count toward thresholds for other income-tested benefits. You receive the full amount.
To qualify for GIS, you must:
- Already be receiving OAS
- Be 65 or older and residing in Canada
- Have an annual income below the maximum threshold for your marital situation
For the 2026 benefit year, the maximum annual income to qualify for GIS as a single, widowed, or divorced senior is $22,488. Thresholds for couples vary depending on whether the spouse also receives OAS.
The maximum monthly GIS payment for single seniors in January to March 2026 is approximately $1,108.74. This amount decreases as your income rises. For every two dollars of income above certain thresholds, GIS is reduced by one dollar. The full calculation is handled automatically by Service Canada once you file your tax return each year.
There is also a partial employment income exemption built into the GIS. You can earn up to $5,000 per year from employment or self-employment without it affecting your GIS. Income above that amount reduces the benefit, but the exemption is designed to allow some working seniors to still access the supplement.
How GIS Is Calculated and Why Filing Your Taxes Matters
GIS is recalculated every July based on the income you reported on your previous year’s tax return. This means timely tax filing is not optional for GIS recipients. If you do not file by April 30, your GIS payments may be suspended until Service Canada receives your income information.
If your income drops significantly in a given year, such as after retirement or the loss of a spouse, you can contact Service Canada to request a recalculation based on your current year’s estimated income rather than waiting for the annual July adjustment. This can result in higher payments sooner if your situation has genuinely changed.
How OAS and GIS Interact With CPP
CPP, OAS, and GIS are three separate programs with three separate sets of rules, but they are received together by many Canadian seniors and they do interact.
CPP income counts as income for GIS purposes. A higher CPP payment can reduce your GIS entitlement, since GIS is income-tested. This is not a reason to avoid CPP or defer it strategically in most cases, but it is worth understanding that the programs are connected. A lower-income retiree with modest CPP and no other income may qualify for significant GIS on top of OAS, while someone with a substantial CPP payment may qualify for less GIS or none at all.
For OAS, CPP is also counted as net income, which means it contributes to the clawback calculation for higher-income retirees.
Understanding how these three programs interact is one of the reasons retirement income planning matters even for Canadians who do not consider themselves wealthy. The timing of withdrawals, the sequence of income sources, and the way different accounts are structured can all affect what you actually receive.
How to Apply for OAS and GIS
As noted above, some Canadians are enrolled in OAS automatically. For those who are not, or who want to apply for GIS, the process is straightforward.
You can apply for OAS and GIS online through your My Service Canada Account. Paper applications are also available. For GIS specifically, you must already be receiving OAS before your GIS application can be processed.
Once approved, GIS continues automatically each year as long as you file your income tax return on time. You do not need to reapply annually. Service Canada recalculates your entitlement each July based on your filed return.
One more thing worth noting for newcomers: if you left Canada for more than six months, your GIS payments may be paused and will resume when you return. OAS has different rules depending on how long you have lived in Canada and whether you are receiving a full or partial pension. Checking with Service Canada before any extended absence is worthwhile.
The Bottom Line
OAS and GIS together form a meaningful part of the retirement income picture for millions of Canadians, and they are particularly valuable for those with limited savings, shorter contribution histories, or lower lifetime earnings.
The key points to carry forward: OAS is residency-based and available to most Canadians at 65, GIS is a tax-free top-up for lower-income OAS recipients, the clawback affects higher-income seniors but leaves the vast majority of recipients untouched, and timely tax filing is essential to keeping both benefits intact.
Used alongside CPP and personal savings in registered accounts, OAS and GIS are a strong foundation for retirement income in Canada. The next article in this series covers all three government programs side by side: CPP vs OAS vs GIS: What Is the Difference?
Disclaimer: The information in this post is for educational purposes only and does not constitute financial, investment, tax, or legal advice. OAS and GIS rates, income thresholds, and program rules are reviewed quarterly and subject to change. All figures referenced reflect publicly available Government of Canada data current as of early 2026. Always verify current figures at Canada.ca and consult a qualified professional before making retirement income decisions.
