Canada's three-pillar retirement income system
Canada’s retirement income system is built on a "three-pillar" model that combines government programs, workplace pensions, and personal savings to provide financial security for seniors. The first two pillars are government-funded and include the Canada Pension Plan (CPP) and Old Age Security (OAS) with the Guaranteed Income Supplement (GIS). These are the primary sources that determine how much money seniors get in Canada each month. The third pillar consists of private savings, such as Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs), which supplement government benefits.
The Old Age Security (OAS) pension
OAS is a monthly, taxable pension paid to eligible Canadians aged 65 and older. It is funded by general government revenues, not by direct contributions from individuals during their working years. The amount you receive depends on how long you have lived in Canada after the age of 18. You are eligible for a full OAS pension if you have lived in Canada for 40 years. A partial pension is available for those with at least 10 years of Canadian residency.
- OAS Payment in 2025: The maximum monthly OAS payment for those aged 65-74 is approximately $734.95, while seniors aged 75 and over receive a 10% increase, bringing their maximum payment to $808.45 per month (as of September 2025).
- OAS Recovery Tax: OAS payments are clawed back if your net annual income exceeds a certain threshold. For 2025, the income threshold is approximately $90,997 for individuals aged 65-74. For every dollar you earn over this amount, your OAS benefit is reduced. Higher-income earners may see their OAS benefit eliminated entirely.
- Application Process: Unlike CPP, some seniors are automatically enrolled in OAS, but others need to apply. Service Canada will notify you if you are automatically enrolled.
The Guaranteed Income Supplement (GIS)
GIS is a non-taxable, additional monthly benefit for low-income seniors who receive OAS. It acts as a safety net to ensure that seniors with limited or no other income have a minimum standard of living. The amount of GIS you receive is determined by your annual income and marital status.
- GIS Payments in 2025: For a single, divorced, or widowed senior, the maximum monthly GIS payment is $1,086.88. For a married couple where both receive OAS, each partner can receive up to $654.23 per month.
- Eligibility: To receive GIS, you must be a low-income OAS recipient. As of 2025, the income thresholds are around $22,056 for single seniors and $29,136 for couples. Since GIS is income-tested, you must file your income tax return each year to have your benefits renewed.
The Canada Pension Plan (CPP)
CPP is a monthly, taxable benefit that replaces a portion of a worker's earnings in retirement. Unlike OAS, it is based on contributions made by employees, employers, and self-employed individuals during their working years. The amount you receive depends on your earnings history, how much and for how long you contributed, and the age at which you begin collecting payments. Quebec has its own parallel plan called the Quebec Pension Plan (QPP), which has very similar provisions.
- CPP Payment Amounts (2025): The maximum monthly CPP payment for a new recipient at age 65 is $1,433.00, though the average monthly payment is significantly lower at $844.53.
- Age and Payment Adjustments: You can start collecting CPP as early as age 60, but your payments will be permanently reduced. Conversely, if you delay your pension until age 70, your payments will be permanently increased. This adjustment is designed to balance the total lifetime benefits paid out, regardless of when you start.
- Contribution Enhancement: Since 2019, the CPP has been undergoing an enhancement to increase the percentage of average annual earnings replaced in retirement from one-quarter to one-third over time. This will result in higher retirement pensions for those who contribute to the enhanced plan.
Comparison of federal senior benefits
To understand your potential monthly income, it's helpful to see how the main federal benefits compare. The following table provides a clear overview based on 2025 figures.
| Feature | Old Age Security (OAS) | Guaranteed Income Supplement (GIS) | Canada Pension Plan (CPP) |
|---|---|---|---|
| Funding | General government revenues | General government revenues | Mandatory employee, employer, and self-employed contributions |
| Tax Status | Taxable income (subject to recovery tax) | Non-taxable income | Taxable income |
| Maximum Monthly (2025) | ~$808.45 (age 75+) | ~$1,086.88 (single) | $1,433.00 (at age 65) |
| Eligibility Basis | Age and Canadian residency | Low income and receipt of OAS | Work history and lifetime contributions |
| Age to Collect | Minimum 65 years old | Minimum 65 years old (and receiving OAS) | As early as 60 (reduced) or up to 70 (increased) |
Maximizing your monthly retirement income
Seniors who want to optimize their monthly income can take several strategic steps. First, understanding how and when to collect government pensions is key. For example, delaying your CPP and OAS benefits until age 70 can result in significantly higher monthly payments for life. However, this strategy requires having other income sources to draw from in the interim.
Second, utilizing personal savings accounts like Tax-Free Savings Accounts (TFSAs) is crucial. Withdrawals from a TFSA do not count as taxable income, meaning they will not affect your GIS eligibility or trigger the OAS clawback. In contrast, withdrawals from an RRSP are taxable and could reduce other government benefits.
Finally, low-income seniors should ensure they file their taxes every year to continue receiving GIS, and they should investigate other potential benefits. Many provinces offer additional programs for seniors, such as property tax deferrals or grants, subsidized housing, and prescription drug assistance. A detailed overview of federal and provincial supports can be found on the Government of Canada's services for seniors website, which is an excellent resource for seniors and their caregivers. For example, some provincial programs offer property tax relief for low-income seniors. These benefits can provide additional financial support beyond the federal pension payments.
Conclusion
Determining how much money seniors get in Canada per month requires understanding the different federal programs and how they work together. The combination of OAS, CPP, and the income-tested GIS forms the core of the retirement income system. Your total monthly benefit is not a single, fixed number but a personalized calculation based on your work history, income, residency, and marital status. By planning strategically and taking advantage of all available benefits, Canadian seniors can maximize their retirement income and ensure greater financial security. Staying informed about program updates and filing taxes annually are essential steps to securing all eligible benefits.
