Are you applying for your Canada Pension Plan and/or your Old Age Security Pension?

January 25, 2010

Ottawa Journal (January 25 – January 29, 2010)
David Tilson, M.P. (Dufferin-Caledon)


If you’re nearing retirement, you will surely be trying to determine that you will be financially secure for your retirement years. In Canada, our social security system, which consists of universal benefits, has developed gradually over time and in response to many factors. Two of the benefits delivered by our Federal Government are the Canada Pension Plan (also known as CPP) and the Old Age Security (also known as OAS and includes the Guaranteed Income Supplement) Program and provide income security to Canadians.

The federally administered CPP operates in nine Canadian provinces and the three territories. It allows a province not to be a part of the Federal pension plan, if it sets up a comparable program, which is the case in the province of Quebec. CPP is a contributory, earnings-related social insurance program and provides a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability, and death.

CPP is financed through contributions from employees, employers, and self-employed persons, as well as interest from the Canada Pension Plan. Benefits paid out of the program are considered income for federal and provincial income tax purposes. The benefits are paid out monthly and following a contributor’s death, the Plan provides benefits to his or her survivors.

You can qualify for the CPP retirement pension if you have made at least one valid contribution (payment) to the plan and if you are at least 65 years of age or you are between 60 and 64 years of age and meet the earning requirements set out in the legislation. Your retirement pension does not start automatically. You must apply for it (unless you already receive a CPP disability benefit and turn 65, at which point your disability automatically changes to a retirement pension).

The Old Age Security program is the cornerstone of Canada’s retirement income system. It provides individuals with a modest, monthly pension at age 65, if they’ve lived, in Canada, for at least 10 years. If you are a low-income senior, you may be eligible for other benefits as early as age 60.

Like the CPP, an individual must apply for the benefit. An applicant’s employment history is not a factor in determining eligibility, nor does the applicant need to be retired. OAS pensions are taxable, both federally and provincially. Higher income pensioners also repay part or all of their benefit through the tax system.

In order to qualify for an OAS pension, you must be 65 years of age or over and: 1) you must be a Canadian citizen or a legal resident of Canada on the day preceding the application’s approval or 2) if you are no longer living in Canada, you must have been a Canadian citizen or a legal resident of Canada on the day preceding the day you stopped living in Canada. You should also remember to apply for the OAS pension six months before you turn 65.

The amount of your pension is determined by how long you have lived in Canada and according to the following rules: 1) a person who has lived in Canada, after reaching age 18, for periods that total at least 40 years, may qualify for a full OAS pension or 2) a person who has not lived in Canada for 40 years after age 18 may still qualify for a full pension, if on July 01, 1977, he or she was 25 years of age or over, and: a) lived in Canada on July 01, 1977, or b) had lived in Canada before July 01, 1977, after reaching age 18, or c) possessed a valid immigration visa on July 01, 1977.

For more detailed information on these pension programs, please feel free to call Service Canada at: 1-800-277-9914. Application forms, as well as instruction guides for both the CPP and OAS may be found on Service Canada’s website at: www.servicecanada.gc.ca or by contacting either of my constituency offices. My Orangeville office may be contacted at: 519-941-1832 and my Bolton office may be contact at: 905-857-6080. I may also be reached toll free at: 1-866-941-1832.