Starting July 2025, Canadian seniors will see adjustments to their Old Age Security (OAS) payments. These changes are part of the government’s regular quarterly updates to reflect the cost of living, ensuring that seniors maintain their purchasing power amidst inflation.
Understanding these adjustments is crucial for effective financial planning during retirement.
What Is the Old Age Security (OAS) Program?
The OAS program is a monthly pension provided by the Canadian government to individuals aged 65 and older. Unlike the Canada Pension Plan (CPP), OAS is not based on employment history but rather on age and residency requirements. To qualify, you must:
- Be 65 years of age or older.
- Be a Canadian citizen or legal resident.
- Have resided in Canada for at least 10 years after turning 18.
The amount you receive depends on how long you’ve lived in Canada after age 18, with full benefits available to those with 40 years of residency.
July 2025 OAS Payment Adjustments
OAS payments are reviewed quarterly—in January, April, July, and October—to account for inflation as measured by the Consumer Price Index (CPI). If the cost of living increases, OAS payments are adjusted upward; however, they do not decrease if the cost of living declines.
For the period starting July 2025, the maximum monthly OAS payments are as follows:
| Age Group | Maximum Monthly Payment | Annual Income Threshold for Full OAS |
|---|---|---|
| 65 to 74 | $727.67 | Less than $142,609 |
| 75 and over | $800.44 | Less than $148,179 |
Note: Payments are subject to a recovery tax (clawback) if your annual net income exceeds the threshold.
Enhanced OAS for Seniors Aged 75 and Over
Since July 2022, seniors aged 75 and over receive a 10% increase in their OAS payments. This enhancement aims to provide additional support to older seniors who may face higher expenses.
For example, if you’re 75 or older in July 2025, your maximum monthly OAS payment would be $800.44, compared to $727.67 for those aged 65 to 74.
Deferring OAS Payments for Higher Benefits
You have the option to defer your OAS payments for up to 60 months (5 years) after becoming eligible at age 65. For each month you delay, your payment increases by 0.6%, up to a maximum of 36% at age 70.
Here’s how deferring affects your monthly payments:
| Age at Start | Increase (%) | Monthly Payment (Age 65-74) | Monthly Payment (Age 75+) |
|---|---|---|---|
| 65 | 0% | $727.67 | $800.44 |
| 66 | 7.2% | $780.06 | $856.41 |
| 67 | 14.4% | $832.45 | $912.38 |
| 68 | 21.6% | $884.85 | $968.36 |
| 69 | 28.8% | $937.24 | $1,024.33 |
| 70 | 36% | $989.63 | $1,080.30 |
Note: Deferring OAS may not be beneficial if you are eligible for the Guaranteed Income Supplement (GIS), as you cannot receive GIS without OAS.
Additional Benefits: GIS and Allowances
Beyond OAS, seniors with low income may qualify for additional support:
- Guaranteed Income Supplement (GIS): Provides extra income to OAS recipients with low annual income.
- Allowance: Available to low-income individuals aged 60 to 64 whose spouse or common-law partner receives OAS and GIS.
- Allowance for the Survivor: For low-income individuals aged 60 to 64 whose spouse or common-law partner has passed away.
Eligibility for these programs depends on your income and marital status.
Tax Implications
OAS payments are considered taxable income. If your annual net income exceeds the specified thresholds, you may be subject to a recovery tax, commonly known as the “OAS clawback.” This means a portion or all of your OAS payment may need to be repaid.
For the July 2025 period, the income thresholds are:
- Age 65 to 74: $142,609
- Age 75 and over: $148,179
It’s important to plan your income accordingly to avoid or minimize the clawback.
Payment Schedule
OAS payments are issued monthly, typically on the third last business day of each month. For July 2025, the payment date is scheduled for July 29. You can receive your payment via direct deposit or cheque.
Frequently Asked Questions (FAQs)
1. How do I apply for OAS?
If you’re eligible, you may be automatically enrolled. If not, you can apply online through your My Service Canada Account or by submitting a paper application.
2. Can I receive OAS if I live outside Canada?
Yes, if you’ve lived in Canada for at least 20 years after turning 18, you can receive OAS payments abroad. However, tax implications may vary based on your country of residence.
3. What happens if I delay my OAS payments?
Delaying your OAS payments increases your monthly amount by 0.6% for each month delayed, up to a maximum of 36% at age 70.
4. Is the 10% increase for seniors aged 75 and over automatic?
Yes, the increase is applied automatically starting the month after your 75th birthday.
5. How is the OAS payment amount determined?
The amount is based on your age, years of residency in Canada after age 18, and your annual net income. Payments are adjusted quarterly to reflect changes in the cost of living.
Conclusion
The upcoming OAS payment adjustments in July 2025 are designed to help Canadian seniors keep pace with the rising cost of living. By understanding these changes and how they affect your benefits, you can make informed decisions to optimize your retirement income.
Stay informed and consider consulting with a financial advisor to ensure you’re making the most of your entitlements.