Old Age Security Program

A pension is a periodical payment to a person that is intended to allow them to keep living without working. In Canada, the majority of the working population have automatically added (directly from their pay check each month) to the Canada Pension Plan (CPP), and so will receive a basic monthly payment from that scheme for their lifetime after retirement. To supplement this scheme, the Canadian government also provides eligible low-income seniors (60 years and older) with additional financial support under the Old Age Security Program.

This is a non-contributary scheme i.e. individuals do not have to contribute any money to receive the benefits. The amount each individual receives depends on their personal circumstances, including residency status and other sources of available income. The financial support can be received through the three main elements of the OAS:
- the OAS pension;
- the Guaranteed Income Supplement; and
- the Allowance (which includes the Allowance for the survivor).

The OAS Pension

This is a taxable monthly income payment, that individuals can receive from 65 years old. The criteria an individual needs to meet to receive the full payment are:
- Their net income, including this payment, is less than a set amount ($62,144 in 2006);
- They must be Canadian citizens or legal resident of Canada at the time the pension is approved and must have resided in Canada for at least 10 years after the age of 18, have lived in Canada for at least three years for each year of absence during that 10-year period, and also resided in Canada for at least one year immediately before the application is approved.

Periods of residence and/or contributions in a country with which Canada has a social security agreement may be used to help meet the residence requirement for eligibility. The amount each individual receives depends on how long they have been resident in Canada as follows:
- If resident for at least 40 years after the age of 18, and individual may qualify for the full OAS pension;
- If the above is not true, an idividual may still qualify for the full pension if, on July 1, 1977, they were 25 years of age or over, and
- resided in Canada on that date, or
- had resided in Canada after the age of 18 and before that date, or
- possessed a valid immigration visa on that date.

Individuals who meet the requirements above can also receive the pension when they are no longer resident i.e. are now living in a different country if they have lived in Canada for at least 20 years after age 18. A pension may be reinstated if an individual has been absent, but then returns to reside in Canada.

If an individual cannot meet the requirements above, for a full pension, they may still be eligible to receive a partial pension if they have resided in Canada for at least 10 years after the age of 18. The partial pension is paid at the rate of 1/40th of the full amount for each year of residence in Canada after 18 years of age.

The Guaranteed Income Supplement

This is a non-taxable monthly income payment, that individuals can receive from 65 years old, in addition to the OAS, and is for seniors with little or no other income. The criteria an individual needs to meet to receive the full payment are:
- They are eligible to receive the OAS;
- Their net income, combined with that of any spouse or common-law partner, is less than a set amount

The size of the payment an individual receieves depends on their income (excluding OAS payments) and marital status, and is not payable to individuals residing outside of Canada for more than six months after their departure.

The Allowance

This is a taxable monthly income payment, that low-income seniors can receive from 60-64 years old. The allowance is designed to help those living on a single pension. The criteria an individual needs to meet to receive the payment are:
- They are eligible to receive the OAS;
- They are between 60-64 and must have resided in Canada for for at tleast 10 years after the age of 18;
- They were a Canadian citizen or legal resident of Canada on the day before approval of the application; and
- Their net income (excluding OAS and GIS payments), combined with that of any spouse or common-law partner, is less than a set amount.
The size of the payment an individual receieves depends on their income and marital status, and is not payable to individuals residing outside of Canada for more than six months after their departure. The survivor allowance is paid to an eligible spouse or common-law partner of an OAS pensioner who has died, until they re-marry or enter into a common-law relationship for more than 12 months.

In order to receive any of the three types of benefit described above, an individual must apply for them in writing in order to have their application approved by the government. The GIS and Allowance must be applied for annually. Retroactive payments can generally be made for a maximum of 11 months.
The chart below (taken from the government of Canada Human Resources and Social Development [HRSDC] website) gives the maximum and average monthly payment rates under the OAS pension, GIS and Allowance, along with the maximum annual income to be eligible for these benefits, as at March 2007. The Allowance stops being paid at $27,600 while the GIS stops being paid at $35,712.