Overview of the Old Age Security Program

The Old Age Security program is one of the cornerstones of Canada's retirement income system. Benefits include the basic Old Age Security pension, the Guaranteed Income Supplement and the Allowance. After briefly describing the program's history and overall features, each of the specific benefits is described in turn.

Legislative history: The Old Age Security Act  came into force in 1952, replacing legislation from 1927 requiring the federal government to share the cost of provincially-run, means-tested old age benefits

The Act has been amended many times. Among the most important changes have been:

• the drop in age of eligibility from 70 to 65 (1965);
• the establishment of the Guaranteed Income Supplement (1967);
• the introduction of full annual cost-of-living indexation (1972);
• quarterly indexation (1973);
• the establishment of the Spouse's Allowance (1975);
• payment of partial pensions based on years of residence in Canada (1977);
• the inclusion of Old Age Security in international social security agreements (ongoing);
• the extension of the Spouse's Allowance to all low-income widows and widowers aged 60 to 64 (1985);
• maximum of one year of retroactive benefits (1995);
• the ability for an individual to request that their benefits be cancelled (1995); and
• the extension of benefits and obligations to same-sex common-law partners (2000).

Funding: The Old Age Security program is financed from Government of Canada general tax revenues.

Administration: The Income Security Programs Branch of HRDC administers the Old Age Security program through regional offices located in each province and territory. The International Operations Division in Ottawa, as its name suggests, is responsible for benefits stemming from Canada's International Social Security Agreements (see International Benefits).

Indexation: All benefits payable under the Old Age Security Act are adjusted in January, April, July and October if there are increases in the cost of living as measured by the Consumer Price Index.

Payment outside Canada: Once a full or partial Old Age Security pension has been approved, it may be paid indefinitely outside Canada, if the pensioner has lived in Canada for at least 20 years after reaching 18 years of age. Otherwise, payment may be made only for the month of a pensioner's departure from Canada and for six additional months, after which payment is suspended. The benefit may be reinstated if the pensioner returns to live in Canada and meets all conditions of eligibility.

The Guaranteed Income Supplement and the Allowance may be paid outside Canada for only six months following the month of departure from Canada regardless of the length of time you have lived in Canada.

Reconsidering and appealing a decision: Old Age Security clients may request an explanation or a reconsideration of any decision that affects their eligibility or the amount of their Old Age Security pension. This request must be made in writing to their Regional Director of Income Security Programs within 90 days of receiving a decision. If not satisfied with the decision of the Regional Director, the client may appeal, again within 90 days, to a Review Tribunal. If the grounds of appeal are income related, the appeal will be referred to the Tax Court of Canada for a decision.

See more information on The Old Age Security Appeals Process.

Old Age Security Pension

The Old Age Security pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or over. Old Age Security residence requirements must also be met. An applicant's employment history is not a factor in determining eligibility, nor does the applicant need to be retired. Old Age Security pensioners pay federal and provincial income tax. Higher income pensioners also repay part or all of their benefit through the tax system.

Eligibility conditions: To qualify for an Old Age Security pension, a person must be 65 years of age or over, and

1. must be a Canadian citizen or a legal resident of Canada on the day preceding the application's approval; or
   
   
2. if no longer living in Canada, must have been a Canadian citizen or a legal resident of Canada on the day preceding the day he or she stopped living in Canada.

A minimum of 10 years of residence in Canada after reaching age 18 is required to receive a pension in Canada.

Amount of benefits: The amount of a person's pension is determined by how long he or she has lived in Canada, according to the following rules:

1. A person who has lived in Canada, after reaching age 18, for periods that total at least 40 years, may qualify for a full Old Age Security pension;
   
   
2. A person who has not lived in Canada for 40 years after age 18 may still qualify for a full pension if, on July 1, 1977, he or she was 25 years of age or over, and
   
   
   • lived in Canada on July 1, 1977; or
     
     
   • had lived in Canada before July 1, 1977, after reaching age 18; or
     
     
   • possessed a valid immigration visa on July 1, 1977.

In such cases, a person must have lived in Canada for the 10 years immediately prior to approval of the Old Age Security application. Absences during this 10-year period may be offset if, after reaching the age of 18, the applicant lived in Canada before those 10 years, for a period of time that was at least three times the length of absence. In this case, however, the applicant must also have lived in Canada for at least one year immediately prior to the date of the application's approval. For example, an absence of two years between the ages of 60 and 62 could be offset by six years of residence after age 18 and before reaching age 55.

Absences from Canada: Canadians working outside Canada for Canadian employers, such as the armed forces and banks, may have their time working abroad counted as residence in Canada. To qualify, the person must have returned to Canada within six months of ending employment or have turned 65 years old while still employed. Both proof of employment from the employer as well as proof of physically returning to Canada, if only for one day, must be provided. Under certain conditions, this provision may also apply to spouses and dependents and Canadians working abroad for international organizations.

A person who cannot meet the requirements for the full Old Age Security pension may qualify for a partial pension. A partial pension is earned at the rate of 1/40th of the full monthly pension for each full year lived in Canada after his or her 18th birthday. Once a partial pension has been approved, it may not be increased as a result of added years of residence in Canada.

Late applicants of the Old Age Security pension as well as the Guaranteed Income Supplement and Allowance may receive retroactive payments. Old Age Security, Guaranteed Income Supplement and Allowance payments may be made for up to 11 months plus the month in which we receive the application, provided all conditions of eligibility are met.

Old Age Security clients can request that their Old Age Security benefits be cancelled. They can have them reinstated at a later date. However, in such cases, no retroactive payments will be permitted.

Guaranteed Income Supplement

The Guaranteed Income Supplement is a monthly benefit paid to residents of Canada who receive a basic, full or partial Old Age Security pension and who have little or no other income. Guaranteed Income Supplement payments may begin in the same month as Old Age Security pension payments. Recipients must re-apply annually for the Guaranteed Income Supplement benefit by filing an income statement or by completing an income tax return by April 30. Thus, the amount of monthly payments determined for the year may increase or decrease according to reported changes in a recipient's yearly income. Unlike the basic Old Age Security pension, the Guaranteed Income Supplement is not subject to income tax. The Guaranteed Income Supplement is not payable outside Canada beyond a period of six months, regardless of how long the person has lived in Canada.

Eligibility conditions: To receive the Guaranteed Income Supplement benefit, a person must be receiving an Old Age Security pension. The yearly income of the applicant or, in the case of a couple, the combined income of the applicant and spouse or common-law partner, cannot exceed certain limits.

Exception: Sponsored immigrants from countries with which Canada has agreements are not eligible for Guaranteed Income Supplement and Allowance during their sponsorship period (up to a maximum of 10 years) unless he/she:

• has 10 years of residence in Canada after the age of 18; or
• had resided in Canada as a Canadian citizen or permanent resident on or prior to March 6, 1996 and will become eligible for benefits January 1, 2001 or earlier; or
• was receiving benefits under the Old Age Security Act for the month of March 1996 or earlier.

Amount of benefits: The amount of the Guaranteed Income Supplement to which a person is entitled depends on his or her marital status and income.

Income for Guaranteed Income Supplement purposes is defined the same way as it is for federal income tax purposes, with a few specific exceptions - the most important of which is Old Age Security pension income. Income, therefore, includes any other money which a pensioner receives, such as an earnings-related retirement pension, foreign pensions, interest, dividends, rents, wages or workers' compensation payments. If married or living in a common-law relationship, the combined income of the pensioner and spouse or common-law partner must be taken into account.

Generally, income earned in the previous calendar year is used to calculate the amount of benefits paid in a payment year which is from July of one year to June of the next year. However, if a pensioner or spouse has retired or has a loss of pension income, an income estimate for the current calendar year may be substituted for the income of the preceding calendar year.

There are two basic rates of payment for the Guaranteed Income Supplement. The first applies to single pensioners - including widowed, divorced or separated persons; and to married pensioners whose spouses or common-law partners do not receive either the basic Old Age Security pension or the Allowance. The second applies both to legally married couples and couples living in common-law relationships, where both spouses or common-law partners are pensioners. The Guaranteed Income Supplement single rate is higher than the Guaranteed Income Supplement married rate. However, each spouse or common-law partner in a couple is entitled to a benefit, so the combined benefits for a couple are higher than those for a single person.

If a person is receiving a partial Old Age Security pension, the maximum Guaranteed Income Supplement may be increased by the difference between that partial pension and the full Old Age Security pension.

For a single, widowed, divorced or separated pensioner, the maximum monthly supplement is reduced by $1 for each $2 of other monthly income.

If both spouses or common-law partners in a couple are receiving the Old Age Security pension, the maximum monthly supplement of each pensioner is reduced by $1 for every $4 of their other combined monthly income.

There is one exception to these two basic rates - for a couple in which only one spouse or common-law partner is a pensioner and the other is not in receipt of either the basic Old Age Security pension or the Allowance. In this case, the pensioner can receive the Guaranteed Income Supplement at the higher rate paid to those who are single. Moreover, the maximum monthly supplement is reduced by $1 for every $4 of the couple's combined monthly income, excluding, as usual, the pensioner's Old Age Security benefit. Also, the first reduction of $1 is made only when the combined yearly income of the couple reaches 12 times the basic monthly Old Age Security pension plus $48.

Non-sponsored immigrants: Newcomers with less than 10 years of residence in Canada who qualify for Old Age Security under a social security agreement will have their Guaranteed Income Supplement/ Allowance entitlement grow gradually over 10 years - 1/10th of the benefit for each year of residence. This includes:

• persons who have not resided in Canada for 10 years after the age of 18 and who are not receiving benefits for the month of March 1996 or earlier;
• newcomers who did not reside in Canada as Canadian citizens or permanent residents before March 7, 1996;
• persons who are already residing or had resided in Canada as Canadian citizens or permanent residents but who do not qualify for benefits until February 2001 or later.

Allowance and Allowance for the survivor

The Allowance, which also includes an allowance for persons whose spouse or common-law partner has died, is paid monthly. It is designed to recognize the difficult circumstances faced by many surviving persons and by couples living on the pension of only one spouse or common-law partner.

Recipients must re-apply annually. These benefits are not considered as income for income tax purposes. The Allowance is not payable outside Canada beyond a period of six months, regardless of how long the person lived in Canada.

Eligibility conditions: The Allowance may be paid to the spouse or common-law partner of an Old Age Security pensioner, or to a survivor. To qualify, an applicant must be between the ages of 60 and 64 and must have lived in Canada for at least 10 years after turning 18. An applicant must also have been a Canadian citizen or a legal resident of Canada on the day preceding the application's approval. To qualify, the combined yearly income of the couple, or the annual income of the survivor, cannot exceed certain limits which are established quarterly. The Old Age Security and Guaranteed Income Supplement benefits are not included in their combined yearly income.

The Allowance stops when the recipient becomes eligible for an Old Age Security pension at age 65, if the beneficiary leaves Canada for more than six months, or dies. For a couple, the Allowance stops if the pensioner spouse or common-law partner ceases to be eligible for Guaranteed Income Supplement or if the spouses or common-law partners separate or divorce. In addition, the Allowance stops if a survivor remarries or lives in a common-law partnership for more than 12 months.

Exception: A sponsored spouse or common-law partner of an Old Age Security pensioner or a survivor between the ages of 60 and 64 with less than 10 years of residence in Canada after reaching age 18 is not eligible for the Allowance benefit for the period of his or her sponsorship, up to a maximum of 10 years, unless he or she:

(1) was receiving a pension in March 1996 or before; or

(2) was residing in Canada or had resided in Canada as a Canadian citizen or permanent resident before March 7, 1996 and will receive a pension in January 2001 or before.

Amount of benefits: The Allowance is an income-tested benefit. The maximum amount payable to the spouse or common-law partner of a pensioner is equal to the combined full Old Age Security pension and the maximum Guaranteed Income Supplement at the married rate. The maximum amount for a person whose spouse or common-law partner has died is somewhat higher. The maximum monthly Allowance is reduced by $3 for every $4 of the beneficiary's monthly income for a widowed spouse or common-law partner or the couple's combined monthly income. This happens until the Old Age Security-equivalent is reduced to zero. Then, for a couple, both the Guaranteed Income Supplement-equivalent portion of the Allowance and the pensioner's Guaranteed Income Supplement are reduced by $1 for every additional $4 of the couple's combined monthly income. For a survivor, the Guaranteed Income Supplement-equivalent portion is reduced by $1 for every additional $2 of monthly income.

Non-sponsored immigrants: The Allowance benefit is prorated in the case of a person who has not resided in Canada for 10 years after reaching age 18 and:

(1) was not residing or had not resided in Canada before March 7, 1996 as a Canadian citizen or permanent resident; or

(2) was residing in Canada on that date or had resided in Canada prior to that date as a Canadian citizen or permanent resident but will not receive a pension in January 2001 or before.

Entitlement will be established at the rate of 1/10th of the benefit for each year of residence in Canada after reaching age 18 and will be increased by an additional 1/10th for each additional year of residence in Canada.

Other public retirement benefits

If you made at least one valid contribution to either the Canada Pension Plan or the Quebec Pension Plan, you will be eligible for a retirement pension at age 65. If you have retired or substantially reduced your hours of work, you could qualify for a reduced retirement pension as early as age 60.

Disability benefits and survivor benefits are also available under the Canada Pension Plan and the Quebec Pension Plan  if sufficient contributions have been made. You must apply to receive any of these benefits.

For more information on the Quebec Pension Plan , visit the Web site of the Régie des rentes du Québec .

You may be entitled to benefits under the Employment Insurance Program or from other federal programs such as War Veterans Allowances from Veterans Affairs Canada .

Your provincial or territorial, and municipal governments may offer income assistance and services to seniors such as housing or health coverage (see Provincial and territorial governments ). Please contact these governments directly for more information.

For more information on federal, provincial and territorial programs for seniors, visit the Canadian Seniors Policies and Programs Database  Web site.

More Information

For more information about the Old Age Security Program and the Canada Pension Plan, please contact us at the telephone numbers below. The calls, which are free of charge, can be made anywhere from Canada and the United States.

1 800 277-9914 for service in English
1 800 277-9915 for service in French

If you are hearing or speech-impaired and use a telecommunications device for the deaf (TDD), please call 1 800 255-4786.

Please have your Social Insurance Number on hand when you call.

Note: This web page provides an overview of the Old Age Security Program and its supplements, the Guaranteed Income Supplement, Allowance and Allowance for the survivor. It is intended to give a general description of how the program works, who is eligible and how benefits are determined. It is not possible, in this space, to provide a comprehensive description of all the details of the complex legislation governing this program. In case of disputes, the wording and provisions of the Old Age Security Act and Regulations prevail.

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