Old Age Security - Full Pension or Partial Pension
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Although most Canadians will be entitled to receive the full permissible pension amount from Old Age Security (OAS), subject to any income offsets; some Canadians are only entitled to receive a partial pension from Old Age Security. As such, it is important to look at the distinctions between an Old Age Security full pension and an Old Age Security partial pension, including the government’s eligibility requirements and the differences in recipient payouts.
To qualify for a full Old Age Security pension entitlement (the maximum benefit amount), you need to have lived in Canada for at least 40 years after the age of 18. Canadians working outside Canada for Canadian employers, such as the Canadian Armed Forces, a Canadian government, and certain Canadian employers, such as banks, may have their time working abroad counted as residence in Canada. To qualify this time working abroad as residence, you must have either:
1. returned to Canada within 6 months of ending employment; or
2. turned 65 years old while still employed and maintained residence in Canada during your time outside of Canada.
For those who worked outside of Canada (under the qualifying criteria) and wishing to have their time working abroad counted towards their residence, you must provide the following 2 documents:
1. proof of employment from the employer; and
2. proof of physically returning to Canada (unless you turned 65 while still employed outside Canada).
Under certain conditions, spouses, common-law partners, dependents, and Canadians working abroad for international organizations may also count time spent abroad as residence in Canada.
There are other circumstances under which you may qualify for a full OAS pension without having met the required 40 years of Canadian residence. This includes a grandfathered arrangement that is available to individuals who were 25 years of age or older and lived in Canada or had a valid Canadian Immigration Visa on or before July 1, 1977.
If you do not qualify for the full OAS pension entitlement, you may nevertheless qualify for a partial OAS pension, provided that either:
1. If you live in Canada when you apply, if you have lived in Canada for at least 10 years after the age of 18.
2. If you live outside of Canada when you apply, if you have lived in Canada for at least 20 years after the age of 18.
A partial monthly pension is earned at the rate of 1/40th of the full monthly pension for each year of residence in Canada after the age of 18. For example, if you have lived in Canada for 32 years after the age of 18, you will receive 32/40ths of the full monthly pension amount. Once a partial pension has been approved, it cannot be increased due to additional years of residency in Canada .
As with most government administered programs, there is considerable complexity that can arise with individual circumstances that are not clear cut for government workers to determine and administer. In those circumstances, it is important that you delve into greater detail about the Old Age Security pension program, including the considerable amount of information and legislation provided by the federal government (including Reference Guide - Application for the Old Age Security Pension and Guaranteed Income Supplement: SC ISP-3550A (2024-10-01) E), together with speaking with knowledgeable professionals.
If you are looking into Old Age Security, our law firm provides legal services of potentially significant value, including estate planning, wills and trusts, together with all too frequently overlooked employer payment obligations due to Canadian employees at the end of their employment. To learn more, contact our law firm today to schedule a confidential consultation at Chris@NeufeldLegal.com or 403-400-4092.