Free money? No thanks, I’ll pass

New rules allow you to defer your OAS into the future resulting in more money overall.



From the April 2013 issue of the magazine.


Most Canadians don’t hesitate to sign up for Old Age Security benefits as soon as possible. Why turn down a free monthly cheque from Ottawa? But in some cases, the best move may be not to apply for the cash.

Starting July 1st, anyone eligible for OAS can defer payments for up to five years. (Currently OAS is offered at age 65, but by 2029, you’ll need to be 67.) By voluntarily deferring OAS you receive fewer monthly payments but they will be larger—about 7.2% extra for each year deferred. That currently works out to $470 for every year you wait.

Delaying OAS could mean you get more money overall, but it depends on your situation. If your income is $71,000 or more, and you expect your income to drop within the next five years, then deferring OAS payments allows you to avoid clawbacks. Waiting is also wise if you expect to live a long time.

4 comments on “Free money? No thanks, I’ll pass

  1. The other place where it might seems to make sense to delay is when you are to collect another source of pension income that is not index or is only partially indexed. By delaying the OAS payment, you can help buffer the effect of inflation.


  2. Can a 66 year old opt out of OAS this July?


  3. I would never defer any money, just take it and invest it. Nobody can decide how long they are going to live by the way.


  4. "Free money? No thanks, I’ll pass", "Why turn down a free monthly cheque from Ottawa?" – incorrect. OAS payments are NOT free – the payments are funded by taxpayers, just like OHIP.


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