e-3820 (Social affairs and equality)

The Old Age Security (OAS) program plays a significant role in providing income security to Canadians in their senior years. OAS benefits are intended to provide partial income security for seniors in recognition of the contributions that they have made to Canadian society and the economy.

Benefits under the OAS program include the OAS pension, which is paid to all persons aged 65 or over who meet the residence requirements, the Guaranteed Income Supplement (GIS) for low-income seniors, and the Allowances for low-income Canadians aged 60 to 64 who are the spouses or common-law partners of GIS recipients, or who are widows or widowers.

To ensure OAS benefits retain their value over time and to protect the purchasing power of seniors, OAS benefits are adjusted four times per year (in January, April, July and October) to reflect inflation, as measured by the Consumer Price Index (CPI). The CPI measures the price of a typical “basket” of goods and services, such as food, shelter, gas and clothing, commonly purchased by Canadian households.

This quarterly indexation provides increases to all benefits under the OAS program, including the OAS pension, the GIS, and the Allowances, when prices go up.

In addition, the Old Age Security Act contains a guarantee ensuring that benefits can never go down, even in the event of a decline in the CPI. Should the average cost of living decrease, OAS benefit amounts stay at the same level as during the previous three-month period.

The Government of Canada remains committed to improving the income security of all seniors and continues to seek ways to strengthen the OAS program, as demonstrated by a broad range of measures taken since 2016:

• Budget 2016 restored the age of eligibility for the OAS pension and the GIS to 65, putting thousands of dollars back in the pockets of future Canadian seniors.
• In July 2016, the GIS was increased by up to $947 per year for the lowest-income single seniors, benefiting close to 900,000 vulnerable seniors across Canada.
• In December 2017, the Government launched automatic enrolment to the GIS. Seniors who are automatically enrolled for the OAS pension are now automatically enrolled for the GIS without ever having to complete an application.
• In Budget 2019, the Government enhanced the GIS earnings exemption so that low-income seniors who work are able to keep more of what they earn. As of July 2020, the enhanced exemption applies to both employment and self-employment income, and provides a full exemption on up to $5,000 of annual earnings, as well as a 50% exemption on the next $10,000 of earnings. This means that low-income seniors who work can keep more of their benefits.

The Government has also taken action to protect seniors’ financial security during the COVID-19 pandemic. This included providing, in July 2020, a one-time tax-free payment of $300 for seniors eligible for the OAS pension, with an additional tax-free payment of $200 for seniors eligible for the GIS. This measure provided a total of $500 to low-income seniors who received both the OAS pension and the GIS. Allowance recipients also received $500. This $2.5 billion investment helped Canadian seniors cover increased costs due to the COVID-19 pandemic.