As the cost of living rises across Canada, seniors are relying more than ever on government pensions. The Old Age Security (OAS) program remains a cornerstone of financial support for Canadians aged 65 and older. As of May 2025, new payment rates, eligibility criteria, and tax guidelines have been confirmed, making it essential for current and future retirees to stay informed.
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What Is the OAS Program and How Does It Work?
OAS is a government-funded monthly pension available to seniors aged 65 and over, regardless of work history. Unlike the Canada Pension Plan (CPP), which depends on employment contributions, OAS is funded through general tax revenues and based primarily on residency.
Canada’s Three-Part Retirement System
Retirement income in Canada is built on three pillars:
1. Old Age Security (OAS)
A basic, tax-funded pension for eligible seniors.
2. Canada Pension Plan (CPP) or Quebec Pension Plan (QPP)
Work-based pensions that depend on your contributions during employment.
3. Personal and Employer Savings
Includes Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and workplace pensions.
This structure aims to provide broad financial security in retirement.
OAS Eligibility Requirements in 2025
To receive OAS benefits, you must meet specific conditions depending on where you live.
If Living in Canada:
- Be at least 65 years old
- Be a Canadian citizen or legal resident
- Have lived in Canada for at least 10 years after age 18
If Living Outside Canada:
- Must have been a Canadian citizen or legal resident before leaving
- Must have lived in Canada for at least 20 years after age 18
Consider Delaying Your OAS:
You can delay your OAS payments up to age 70, increasing your monthly amount by 0.6% for each month delayed, for a potential total boost of 36%.
Updated OAS Payment Amounts – May 2025
OAS payments are adjusted every quarter to reflect inflation. Here’s what you can expect in May 2025:
| Age Group | Monthly Payment (Max) |
|---|---|
| 65 to 74 years | Up to $727.67 |
| 75 years and older | Up to $800.44 |
Next payment date: May 29, 2025
Actual amounts depend on your income and how long you’ve lived in Canada.
Are OAS Payments Taxable in 2025?
Yes. OAS payments are considered taxable income and must be reported on your annual tax return.
The OAS Clawback (Recovery Tax)
If your annual net income exceeds $86,912, part or all of your OAS may be clawed back:
| Age Group | Clawback Begins | Fully Eliminated At |
|---|---|---|
| 65–74 years | $86,912 | $142,609 |
| 75+ years | $86,912 | $148,179 |
To avoid or reduce the clawback, consider strategies like income splitting or tax-efficient withdrawals from RRSPs and TFSAs.
Guaranteed Income Supplement (GIS) – Additional Support for Low-Income Seniors
The GIS offers extra, non-taxable monthly payments to low-income seniors who receive OAS.
GIS Income Limits – May 2025:
| Situation | Annual Income Limit |
|---|---|
| Single senior | Under $21,624 |
| Couple (both on OAS) | Under $28,560 |
| Couple (only one on OAS) | Under $51,840 |
Payments vary based on your situation and are calculated using your previous year’s income.
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How to Apply for OAS in 2025
Not everyone is automatically enrolled in OAS. If you’re turning 65 soon and haven’t received a notice of automatic enrollment, here’s how to apply:
Apply Online:
- Sign in to your My Service Canada Account
- Complete and submit the digital application form
Apply by Mail:
- Download the OAS application form from the Government of Canada website
- Mail the completed form along with required documents
Final Thoughts: Stay Informed and Plan Ahead
As of May 2025, OAS payments of up to $800.44/month, plus inflation protection and GIS top-ups, play a critical role in ensuring financial stability during retirement.
To get the most out of your benefits:
- Understand the latest eligibility rules
- Consider delaying payments for a higher monthly amount
- Monitor your income to avoid the clawback
- Apply early if you’re approaching age 65