Essential Federal Benefits at 65
In Canada, turning 65 is a significant milestone that can trigger eligibility for several important federal benefits. The main programs are Old Age Security (OAS) and the Canada Pension Plan (CPP). Your access to these programs forms the financial foundation for retirement for most Canadians.
Old Age Security (OAS) Pension
OAS is a monthly, taxable pension for Canadian seniors aged 65 and older. Unlike the CPP, you do not need to have a work history to qualify. Eligibility is based on age and residency. To qualify while living in Canada, you must be a Canadian citizen or legal resident and have lived in Canada for at least 10 years since turning 18. You can also delay receiving your OAS pension to get a higher monthly payment, with payments increasing by 0.6% for each month you defer, up to a maximum of 36% at age 70.
Guaranteed Income Supplement (GIS)
This is a non-taxable benefit that provides extra money to low-income OAS recipients aged 65 and older. The amount you receive depends on your income and marital status. It's vital to file your taxes annually to maintain eligibility, as the benefit amount is calculated based on your previous year's income. Many seniors who are automatically enrolled in OAS will also be automatically assessed for the GIS.
Canada Pension Plan (CPP) Retirement Pension
The CPP retirement pension is a monthly, taxable benefit that replaces part of your income when you retire. You must have made contributions to the CPP during your working life to qualify. You can start your CPP pension as early as age 60 with a permanently reduced amount, or delay it until age 70 for a permanently increased amount. The standard start age is 65, which provides the full base amount.
Provincial and Territorial Support Programs
In addition to federal benefits, most provinces and territories offer their own support programs for seniors, often providing a top-up to federal benefits or covering specific needs like healthcare and housing. These programs vary significantly by location.
Notable Provincial Benefits
- British Columbia: The BC Senior’s Supplement offers a monthly top-up for low-income seniors receiving federal benefits. The Shelter Aid for Elderly Renters (SAFER) program helps make housing more affordable for seniors.
- Alberta: The Alberta Seniors Benefit provides monthly payments for low-income seniors to help with living expenses, based on income and accommodation. There are also dental and optical assistance programs.
- Ontario: The Ontario Drug Benefit (ODB) Program covers most prescription drug costs for seniors over 65. Low-income seniors can also receive additional support through the Guaranteed Annual Income System (GAINS).
- Quebec: For those who worked in Quebec, the Quebec Pension Plan (QPP) offers similar benefits to the CPP. Retraite Québec also offers a retirement pension supplement for those who continue to work and contribute past 65.
Comparison of Key Federal Senior Benefits
| Feature | Old Age Security (OAS) | Guaranteed Income Supplement (GIS) | Canada Pension Plan (CPP) |
|---|---|---|---|
| Funding Source | General government revenues; no contributions needed. | General government revenues. | Mandatory contributions from workers and employers. |
| Benefit Type | Monthly taxable payment. | Monthly non-taxable payment. | Monthly taxable payment. |
| Eligibility at 65 | Based on age and residency in Canada. | Low-income test; must receive OAS. | Based on contributions made during working years. |
| Income Test | Yes, subject to clawback if income exceeds a certain threshold. | Yes, income-tested; benefit amount depends on income level. | No, not income-tested; based on contributions. |
| Application | Mostly automatic, but may require application. | Often automatic for those on OAS, but application sometimes needed. | Must be applied for, as early as age 60. |
Maximizing Your Senior Benefits
In addition to the main pension programs, there are several tax credits and other avenues for financial support that Canadian seniors should explore.
Other Financial and Health Benefits
- Goods and Services Tax/Harmonized Sales Tax (GST/HST) Credit: This is a tax-free quarterly payment for low- and modest-income individuals and families to help offset the GST or HST that they pay. Seniors may be eligible for this credit based on their income tax return.
- Pension Income Splitting: Couples can split up to 50% of their eligible pension income to potentially reduce their combined tax burden. This can be a significant tax-saving strategy for seniors.
- Medical Expense Deductions: Seniors can claim eligible medical expenses on their tax return to reduce their taxable income. This includes costs for prescriptions, home renovations for accessibility, and more.
- Home Accessibility Tax Credit: This credit allows seniors to claim 15% of up to $10,000 in eligible home renovation expenses that improve a home's safety and accessibility.
Actionable Steps and Important Considerations
Accessing all the benefits you are entitled to requires proactive planning. Here are some key steps to take as you approach your 65th birthday:
- Check for Automatic Enrollment: For OAS and GIS, Service Canada may automatically enroll you based on your tax filings. However, it's always wise to confirm this yourself.
- Apply for CPP: Unlike OAS, the CPP pension requires you to apply. You should do so at least six months before you want your payments to start.
- Investigate Provincial Programs: Research your province’s specific senior programs for housing, healthcare, and income support. A good starting point is the official government website for your province.
- File Taxes Annually: Filing your tax return is essential for automatically renewing income-tested benefits like GIS and receiving tax credits. For detailed information on these programs, visit the Government of Canada website.
Conclusion
Reaching age 65 in Canada opens the door to a robust safety net of federal and provincial benefits. By understanding the core programs—OAS, GIS, and CPP—and investigating the additional support available through your provincial government and tax credits, you can ensure a more financially stable and secure retirement. Don't rely on benefits starting automatically; take the initiative to research and apply for what you're entitled to, and don't hesitate to seek further information from authoritative sources like Service Canada.
