OAS Rises Close to 3% in Twelve Months

Evelyn Jacks

The federal government raised the Old Age Security (OAS) and Guaranteed Income Supplement (GIS)  benefits payable to seniors from October to December 2024 by 1.3%, based on changes in the Consumer Price Index (CPI).  In total seniors will have received an indexing adjustment of 2.8% in the 12-month period from October 2023 to October 2024.  Let’s examine who qualifies these benefits and how this indexing adjustment is calculated.

Who qualifies?  Residents of Canada who have lived here at least 10 years since the age of 18 are eligible to receive the OAS. Non-residents who were a legal resident of Canada on the day before they left and who lived in Canada for at least 20 years since turning age 18 may also apply.  Here are the benefits for the calendar year 2024:

           OAS Benefits Receivable:  Calendar Year 2024 - Summary

OAS Clawback. OAS is income-tested, and could be clawed back if individual net income exceeds certain threshold limits, shown below for 2023 and 2024:

What are the GIS amounts?  Low income earners may qualify for an additional benefit.  The indexed GIS is $1183.44 for singles and those married to a non-pensioner and $654.24 to the spouse of an allowance recipient or someone married to a pensioner.   The regular allowance is $1381,90 and the survivor’s allowance is $1647.34 in Q4 2024.

How is the indexing calculated?   OAS and Guaranteed Income Supplement (GIS)  benefits are adjusted for inflation quarterly, including the Guaranteed Income Supplement (GIS), is based on the difference between the average CPI for 2 periods of 3 months each:

• the most recent 3-month period for which the CPI is available
• the last 3-month period where a CPI increase led to an increase in OAS benefit amounts

Bottom line:  The OAS and GIS are important income supports for seniors.  Advisors can help to maximize the receipts with RRSP contributions to reduce clawbacks, if seniors are age-eligible.  That’s just a tax deferral, however, as taxable RRIF or annuity income must be generated from the RRSP after age 71.    Higher income earners may wish to consider postponing the OAS to age 70 if they are in a clawback range generating other income sources before this.