Supersize your OAS payments

A new rule change means you can choose to supersize your OAS payouts.



From the June 2012 issue of the magazine.


You’ve no doubt heard that if you were born in March 1958 or later, you’ll have to wait longer to start collecting Old Age Security (OAS). But did you know that another new rule change means you can choose to supersize your payouts? Starting next year, people who opt to take OAS later will be compensated with larger monthly payments.

Starting July 1, 2013, you’ll be able to delay the start of your OAS for up to five years. In return, your payouts get bumped up by 7.2% for every year you defer. That means that you’ll get fewer payouts over your lifetime, but they will be bigger. Seniors currently receive a maximum OAS payout of $6,481 a year starting at age 65, so deferring OAS by one year can increase that by $467 annually (plus inflation adjustments). Deferring five years will give you a hefty $2,333 annual boost in current dollars.

Deferral tends to make sense if you expect to live particularly long. Of course that’s hard to predict, but it’s more likely if you’re in good health and your older relatives lived exceptionally long lives. Waiting to start OAS may also make sense if you work past 65 and you’re in a high tax bracket. In that case, waiting to take OAS could result in considerable tax savings.

4 comments on “Supersize your OAS payments

  1. The real issue here is taxation and the claw back. If you are still working or have a high income in the early years of retirement you may choose to delay taking the OAS until you have a lower taxable income and don't lose as much to the claw back.

    David can you post a comment about the affects of the claw back when you have super sized the OAS?


  2. Let me see if I have this right.
    I will be 70 in June and My wife will be 69 in August of this year (2012)
    Can one of us or both apply to have are payments deferred for up to 5 years?
    How and when do we apply? My wife will be earning an extra $30,000 of US dividends from a US REIT for the next two years at least. Anyone can e-mail me if they like at Any help would be most appriciated


    • You can apply to have payments deferred if you agree to give up receiving OAS for 2 years *in addition* to the deferred years. That's what those who are born after March 1958 face and if you want to take their alleged goodies, it's only fair you take their lumps as well. Oh, it looks like this applies for those just turning 65 in July 2013, so not only do they get to continue to receive OAS at 65, they can take advantage of the boost as well; nice way to add more salt to the wound of the post March 1958 population.

      In all seriousness, this doesn't apply to you because you've already started receiving your OAS.


  3. I will be 70 in oct 2013. I have not claimed any OAS or CPP yet. I am retiring in april 2013. I have continued to work and contribute to CPP/OAS. Should I wait to apply for OAS and CPP respectively for july when new rule comes in and for CPP till I am 70?


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