Page 124 - A Canuck's Guide to Financial Literacy 2020

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Voluntary Deferral of OAS

Since 2013, eligible Canadians, 65 years of age or older, can defer receiving their OAS
pension for up to maximum 5 years. (60 months) Deferring the payment will increase the
monthly benefit.

• The benefit will be enhanced by 0.6% a month, equivalent to 7.2% per year.
• The deferral can only be between the ages of 65 to 70.
• Maximum Deferral will result in a 36% monthly benefit increase at 70. (5 years x
7.2% per year)

Example of Deferral

Jeff turned 65 in June 2019. He decides that he will delay receiving his OAS pension by one
year and start taking it at 66. His OAS benefit will increase by 0.6% per month up to 7.2%
per year (0.6 x 12).

If Jeff's monthly payment is $563.32 - his increased monthly payment will be (563.32 *
1.072) = $603.87

Absence from Canada

A pensioner can apply for OAS from outside of Canada pending that the individual

• has lived in Canada for at least 20 years after reaching the age of 18.
• lived and worked in a country that has a social security agreement with Canada and
you meet the 20-year residence requirement

If an individual does not meet either requirement, the individual may be able to receive OAS
only for the month they left Canada and six months after that. Payments would start again
once the individual arrives back in Canada.

• Example: If you left Canada in February, you would receive payments until the end
of August. After August, the payments would stop until you return to Canada.

Direct Deposit
Through direct deposit, you can elect for your OAS pension to be automatically deposited
into your bank account in Canada or the United States. If you live in the United States, your
funds would be automatically be converted to US dollars. Your OAS payments can be made
anywhere in the world in the local currency if possible. If it's not possible then the payments
are converted to Canadian dollars.