Canadian seniors may soon receive a $1,980 Old Age Security (OAS) payment boost in January 2025.
This proposed one-time payment is intended to help older Canadians manage the rising costs of living, including increased expenses for housing, healthcare, and essentials.
Here’s a breakdown of what this payment boost means, who qualifies, and how you can apply to ensure you get it.
What is the $1,980 OAS Payment Boost?
The Old Age Security (OAS) program is a monthly benefit for Canadian seniors aged 65 and older.
The proposed $1,980 payment boost is a one-time payment meant to provide additional financial relief in January 2025.
This initiative aligns with previous government actions, such as the 10% permanent increase in OAS payments for seniors aged 75 and older in 2022 and temporary boosts introduced during the COVID-19 pandemic.
The proposed $1,980 boost would offer eligible seniors a significant financial cushion to help with inflation and other rising costs, especially for those on fixed incomes.
Key Details
| Criteria | Details |
|---|---|
| Payment Amount | $1,980 (one-time boost) |
| Eligibility Age | 65+ |
| Residency Requirement | Must have lived in Canada for at least 10 years |
| Income Threshold (Clawback) | $86,912 (2025 threshold for partial recovery) |
| Application Process | Automatic for most; manual application for new applicants |
Who is Eligible for the $1,980 OAS Boost?
To qualify for the $1,980 OAS payment boost, you must first meet the basic OAS eligibility requirements.
1. Age and Residency Requirements
- Age: You must be at least 65 years old.
- Residency: You must have lived in Canada for at least 10 years after the age of 18. To receive the full OAS pension, you must have lived in Canada for 40 years.
2. Legal Status
- You must be a Canadian citizen or a legal resident at the time of your application.
3. Income Thresholds and Clawback
The OAS is income-tested, which means higher-income seniors may see a reduction in their benefits due to the OAS Recovery Tax (commonly called the clawback).
- The clawback threshold for 2025 is $86,912.
- For every dollar above this threshold, your OAS benefit is reduced by 15%.
Example:
If your income is $90,000, your OAS benefit would be reduced by:
(90,000 – 86,912) × 0.15 = $463.20
How to Apply for the OAS Payment Boost
1. Automatic Enrollment
Most Canadians are automatically enrolled in the OAS program when they turn 65. If you’re already receiving OAS payments, this $1,980 boost (if approved) will be added automatically in January 2025—no need to apply.
2. Manual Application for New Applicants
If you’re not currently receiving OAS, you’ll need to apply manually through Service Canada.
Application Process
- Gather Required Documents
- Proof of age (birth certificate or passport)
- Residency proof (utility bills, rental agreements)
- Proof of legal status (permanent resident card or citizenship certificate)
- Apply Online or by Mail
- Online: Use your My Service Canada Account for faster processing.
- By Mail: Submit a completed paper application to your regional Service Canada office.
- Monitor Your Application
- Track your application status through My Service Canada Account or contact Service Canada.
- Keep copies of all documents for your records.
How This Boost Compares to Previous Increases
In July 2022, the government introduced a 10% permanent increase to OAS payments for seniors aged 75 and older. This new $1,980 boost differs because:
- It is a one-time payment.
- It applies to all eligible seniors aged 65+, not just those aged 75 and older.
- It is designed to address immediate financial challenges, such as inflation and rising living costs.
Example Monthly Payments
| Scenario | Monthly OAS Payment (2025) | With $1,980 Boost (January 2025) |
|---|---|---|
| Full OAS, No GIS | $722 | $2,702 |
| Partial OAS (20 years in Canada) | $361 | $2,341 |
| Full OAS + GIS | $1,200 | $3,180 |
Tips to Maximize Your OAS Payments
1. Delay Your OAS Start Date
If you delay receiving OAS beyond age 65, your monthly payment will increase by 0.6% for each month you defer, up to age 70. This strategy can boost your overall retirement income.
Example: Delaying OAS by 36 months (3 years) increases your payment by 21.6%.
2. Minimize Your Taxable Income
To avoid the OAS clawback, consider:
- Contributing to a Tax-Free Savings Account (TFSA).
- Splitting pension income with your spouse to lower your individual taxable income.
3. Apply for Additional Benefits
Low-income seniors may qualify for the Guaranteed Income Supplement (GIS), which is not taxable and provides extra financial support.
Other provincial programs, such as Ontario’s Guaranteed Annual Income System (GAINS), can further supplement your income.
