Changes to Old Age Security (OAS)

Budget 2012 takes action to ensure that the OAS program is on a sustainable path by increasing the age of eligibility and providing an option to defer OAS benefits.

Budget 2012 proposes to increase the age of OAS and GIS eligibility from 65 to 67, with the changes being phased in beginning April 2023, and full implementation by January 2029. The 11-year notification period, followed by a six-year phase-in period, is provided to ensure that individuals have significant advance notice to plan and adjust.

The change to OAS/GIS eligibility will not affect anyone age 54 or older as of March 31, 2012; that is, those born on March 31, 1958 or earlier will not be affected. Those born on or after February 1, 1962 will have an age of eligibility of 67. Those born between April 1, 1958 and January 31, 1962 will have an age of eligibility between 65 and 67.

The ages at which the Allowance and Allowance for the Survivor (which are part of the OAS/GIS program) are provided will also gradually increase from 60-64 today to 62-66 effective April 2023. This change will not affect anyone age 49 or older as of March 31, 2012.

Effective July 1, 2013, the federal government will allow for the voluntary deferral of an OAS pension for up to five years. This will give Canadians the option of deferring the take-up of their OAS pension in exchange for a higher, actuarially-adjusted, annual pension. This means that, on average, individuals will receive the same lifetime OAS pension whether they choose to take it up at the earliest age of eligibility or defer to a later year – the latter option simply allows for larger payments in respect of the deferral. GIS benefits, which are paid to lower-income seniors, will not be eligible for the actuarial adjustment.

In addition to the above, Budget 2012 proposes to improve services for seniors by putting in place a proactive enrolment regime that will eliminate the need for many seniors to apply for OAS and GIS benefits. This measure is intended to reduce the burden on seniors of completing applications and will reduce the government’s administrative costs. Proactive enrolment will be implemented in a phased-in approach from 2013 to 2015.