OAS Rates Increase: Pensioners Get a Raise

Old Age Security (OAS) rates are indexed quarterly according to the consumer price index, and third quarter rates for July to September bring good news for Canadian seniors who received no raise in the second quarter of 2019.

For seniors who started receiving the full OAS amount at age 65, the monthly rate will increase $6.01 from $601.45 to $607.46. Newcomers who receive a partial pension will receive a 1% increase. Those who delayed starting until their 70 birthday will see their pension increase $8.17 from $817.97 to $826.14 per month.

Higher-income pensioners will be subject to the OAS recovery tax if their net income exceeds $77,580. This means they’ll have to repay 15% of the lesser of the OAS they receive and their net income in excess of the $77,580 threshold.

Seniors whose net income is between $77,580 and $87,780 in 2019 are subject to two clawbacks – the age amount, and the OAS recovery tax. This bumps their marginal tax rates into the stratosphere. The table below shows the marginal tax rates by province for a single senior with income of $80,000.

These rates are equal to the rates applicable to non-seniors with approximately twice as much income.

Additional educational resources: As a designated MFA™-Retirement and Succession Services Specialist , provide advice and recommendations on retirement readiness based on personal time horizons and savings goals; then custom-design tax-efficient retirement income from multiple sources and manage late life change due to disability and death.

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