Learn Benefit Payment Dates OAS Payment Dates and Amounts for 2021

Old Age Security: OAS Payment Dates and Amounts for 2021

What is OAS?

OAS, or the Old Age Security program, is the retirement pension that most Canadian citizens and residents receive once they turn 65. It’s designed to provide families with assistance, even if they haven’t worked at all.

Graphic showing what is OAS

Canada has a retirement income system made up of three pillars: the Old Age Security, the Canada Pension Plan (CPP), and Employment Pension Plans/Individual Retirement Savings.

Old Age Security is a taxable monthly payment that residents and citizens who qualify receive once they turn 65. It’s significantly different from CPP as it’s not connected to your employment history.

Even if you have never been employed or are still working, you can receive OAS as a retirement income. That is possible because this pillar isn’t funded from your contributions but by the government’s general tax revenues.

Since the universal OAS pension is still a low-level income, recipients may also qualify for three other benefits: The Guaranteed Income Supplement, Allowance, and Allowance for the Survivor. In addition to government aid, you may qualify for loans if you receive government benefits.

iCASH has provided a detailed outline of the Old Age Security (OAS) program, what it can provide, who qualifies, and OAS payment dates and amounts.

OAS Payment Dates for 2021

Here is the OAS payment schedule for 2021, so you can plan your monthly budget in advance:

OAS Payment Dates 2021

   • January 27, 2021
   • February 24, 2021
   • March 29, 2021
   • April 28, 2021
   • May 27, 2021
   • June 28, 2021
   • July 28, 2021
   • August 27, 2021
   • September 28, 2021
   • October 27, 2021
   • November 26, 2021
   • December 22, 2021

As you can see, there is no difference between the CPP and Old Age pension payment schedules; the payment dates for 2021 are identical.

Sometimes your monthly OAS is not enough to cover a financial emergency. Maybe your tire just blew, or your sink is leaky. You have allotted enough funds for your budget, but sometimes you need a little help. Luckily, payday lenders online accept Old Age Security as a form of income so that you can apply for a loan.

How Much is Old Age Pension in Canada?

The maximum OAS payment in Canada goes through quarterly adjustments in January, April, July, and October. It’s adjusted based on fluctuations in the Consumer Price Index. For the first quarter of 2021, from January to March, the maximum amount is $615.37.

The amount of this benefit program however does vary from case to case. Unlike the CPP, where your pension depends on your contributions during your employment period, OAS payment amounts depend on the number of years you have lived in Canada since you turned 18.

You need to have lived in Canada for at least 40 years to receive a full pension. If the period is shorter than that, you will get a partial pension. To get an idea of what you may receive, this is how the partial pension is calculated: you get 1/40th of the full pension for every year you’ve been a Canadian resident past the age of 18.

Suppose you have only lived in Canada for 30 years before turning 65; in that case, you may be eligible for 30/40th or 75% of the full OAS pension established after the last adjustment. It’s worth mentioning that if your partial pension was already approved, the additional years of residence that follow wouldn’t increase its amount.

OAS Eligibility

To be eligible for Old Age Security pension, you must be at least 65 years old. There are two scenarios based on where you’re living.

If you live in Canada:
   ● You must be a Canadian citizen or legal resident when your application is approved
   ● You must have resided in Canada for more than ten years after turning 18 years old

If you live outside of Canada:
   ● You must have been a Canadian citizen or legal resident when you left the country
   ● You must have resided in Canada for more than twenty years after turning 18 years old

But these two aren’t the only possible scenarios. You can still receive an OAS pension or pensions both from Canada and another country if you fit into one of the following categories:

   ● You have resided in a country that has a social security agreement with Canada
   ● You have made contributions to a social security system in a country that has a social security agreement with Canada

If you’re a Canadian and work abroad for a Canadian employer, it is possible to have your time abroad considered a residence in Canada. For that to happen, you must turn 65 while you are still employed or come back to Canada during the first six months after your employment ends.

Even if you are not eligible for Old Age pension, you may qualify to receive other types of retirement benefits. Modern online lenders accept various government benefits that can be eligible as income when applying for online loans in case of financial difficulties.

Graphic showing OAS eligibility requirements

When Do I Receive My First OAS Payment?

If you meet all the requirements we mentioned above and your pension is approved, you will receive your first payment the month after turning 65.

It is possible to defer your OAS retirement income for up to five years if you want to. People sometimes choose this option because it means their delayed Canada OAS payments will be larger. More precisely, the monthly payment will increase by 0.6% for every delayed month. The increase can go up to 36% when you turn 70. But it’s essential to keep in mind that you won’t qualify for the Guaranteed Income Supplement(GIS) and Allowance during this period of delay.

Since we mentioned additional benefits you may qualify for, let’s take a close look at each of them:

● The Guaranteed Income Supplement(GIS) is another non-taxable benefit meant to help low-income seniors residing in Canada. It’s received as a monthly payment.
● The Allowance can be received by individuals with a low income, aged 60 to 64, whose spouse or common-law partner is a GIS recipient.
● Allowance for the Survivor is a benefit designed for low-income Canadian residents. To receive it, they must be aged 60 to 64 and be widowed.

These benefits are adjusted every quarter, just like the OAS payment rates.

OAS Clawbacks

Qualifying for Old Age Security pension may not be difficult, but there’s one more aspect you need to consider: clawbacks when it comes to Old Age pension payment amounts. Also called “OAS recovery tax”, the clawback is a reduction that your pension must go through. If your annual income goes over a particular threshold, you will have to pay back part of your OAS pension or even all of it.

Your income for the previous year is the basis of this calculation. The repayment is based on the difference between that income and the threshold. More precisely, 15% of the exceeding income will have to be reimbursed.

Take a look at the table below to see the exact thresholds:

Recovery Tax Period Income Year Minimum Income Threshold Maximum Income Threshold

July 2020 to June 2021

2019

$77,580

$126,058

July 2021 to June 2022

2020

$79,054

$128,137 

If your income is higher than the minimum threshold, you must repay 15% of the extra income up to a maximum of the total value of OAS collected. But if your income is above the maximum threshold, your Old Age benefit drops to zero.

Let’s take an example. Suppose your income in 2019 was $90,000. Since the threshold is $77,580, the calculations are as follows:

$90,000 - $77,580 = $12,420
$12,420 x 0.15 = $1,863
$1,863 / 12 months = $155.25 per month

In this case, your OAS pension will be reduced by $155.25 for the period between July 2020 and June 2021.

How to Minimize OAS Clawbacks?

To make the most of your OAS pension, it’s essential to know how to minimize the clawbacks. Fortunately, there are things you can do to head in that direction:

1. You can split your income with your spouse or common-law partner – that means all eligible pension income, like workplace pensions, RRIF (Registered Retirement Income Funds), and using spousal RRSPs. By doing that, you are lowering the individual income, and OAS clawbacks can be reduced or even eliminated.

2. Deferring OAS and CPP can be a solution. Still, it means that your benefits will increase later on, causing clawbacks when you start receiving your pension. Sometimes it’s better to start receiving your pension earlier, at least as far as CPP is concerned.

3. Make the best of a TSFA. A tax-free savings account will generate investment income that isn’t taxable, meaning it doesn’t increase your net income.

4. You can contribute to an RRSP (Registered Retirement Savings Plan) because those contributions can lower the level of your net income. You can keep contributing until December 31 of the year when you turn 71. Spousal RRSP contributions will have the same result.

5. Be smart about your investments. It’s important to know that not all types of investment income will be taxed the same way. You will be fully taxed for interest income coming from Guaranteed Income Certificates or term deposits. For a better tax rate, you can turn to mutual fund corporations that can convert income into capital gains. To get an idea of the difference, only 50% of these gains go to the taxable income.

Graphic showing how to minimize OAS clawbacks

How to Apply for OAS Pension?

It is possible to be automatically enrolled for Old Age Security benefits by Service Canada if you qualify. In that case, they will send you a notification letter the month after you turn 64. If that doesn’t happen, or the letter you receive only informs you that you may be eligible for OAS, you will have to apply for this pension yourself.

In some cases, the government agency doesn’t have all the necessary information to enroll you automatically. So, you will need to fill in the Application for the Old Age Security Pension Form and send it. You can also apply online using My Service Canada Account. Regardless of how you choose to apply, you need to do it the month after turning 64. Otherwise, you won’t start receiving OAS pension at 65.

Can I Get a Loan While on OAS?

You can get a loan while on OAS as long as you turn to the right source. A reputable lender like iCASH is your best option; we approve loans for multiple income sources and have no minimum credit score requirement.

On top of that, you can apply online and receive the answer right away, saving time and effort. Emergencies can happen during your retirement years, too, and these loans can get you up to $1,500 to cover those expenses and get back to enjoying your golden years.

These unsecured loans are perfect for unexpected expenses like a car that needs a repair before Monday and not to cover basic needs. They are available online, 24/7, and 365 days a year because emergencies can’t wait. An online lender like iCASH is a great choice for recipients of Old Age pension.

OAS Payment Dates FAQs

Will OAS benefits increase in 2021?

The maximum Old Age payment is subject to a quarterly revision and adjustment. It’s a way of making sure the OAS payment rates reflect the changes in the cost of living, based on the Consumer Price Index.

For recipients’ protection, the monthly payments increase if the cost of living goes up but remain the same if it goes down. For the first quarter of 2021, from January to March, OAS amounts will increase by 0.2%.

What is the maximum OAS payment in Canada?

The maximum Old Age pension payment for 2021 is $615.37 for the first quarter. After that, you’ll need to follow the adjustments based on the Consumer Price Index to find the updated maximum amount. But keep in mind that to receive the maximum amount, you need to have lived in Canada for 40 years after turning 18.

Is income tax deducted from OAS payments?

Your OAS payment amounts are considered taxable income, but taxes won’t be automatically deducted every month. If you want them to be, you can request to have the federal income tax deducted from your monthly payments. There are two ways to do that:

   ● You can sign in to your My Service Canada Account
   ● You can fill in the request for voluntary Federal Income tax Deductions CPP/OAS form (ISP-3520OAS) and send it by mail or deliver it in person at a Service Canada office.

If you don’t make that request, you will have to pay your income tax every quarter.

Can you delay OAS payments?

You can delay your OAS payments for up to five years until age 70. It will get you an increase in benefits once you start receiving them. More precisely, for every deferred month, your payment amounts will increase by 0.6%, up to a total of 36%.

Still, before deciding to delay your payments, keep in mind that it means you won’t be eligible for the Guaranteed Income Supplement (GIS) during this period.

Can I collect OAS while working?

You can collect Old Age Security pension while working. That’s possible because this pillar isn’t connected to your employment history; you can receive payments even if you still work or if you have never been employed.

However, if the income you earn after you turn 65 is high, it will affect your OAS payment amounts and reduce or even eliminate them. Refer back to the clawback table above to see the exact reduction you can expect.

Can I collect OAS while living abroad?

It is possible to collect OAS while living abroad. But to be eligible, you must meet a few requirements:

   ● You must have been a Canadian citizen or legal resident before leaving the country
   ● You must have lived in Canada for at least 20 years after turning 18 years old

You may also qualify if you lived in a country that has a social security agreement with Canada.

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