e-5054 (Social affairs and equality)

The Old Age Security (OAS) program has been supporting Canada’s seniors for over 70 years and will continue to be there for Canadians in the years to come.

The benefits under the OAS program are an important part of the retirement income of Canadians, particularly lower-income seniors. They include the basic OAS pension, which is paid to all persons aged 65 or over who meet the residence requirements, the Guaranteed Income Supplement (GIS) for low-income seniors, and the Allowances for low-income Canadians aged 60 to 64 who are the spouses or common-law partners of GIS recipients, or who are widows or widowers.

OAS benefits are intended to provide partial income security for seniors in recognition of the contributions that they have made to Canadian society and the economy. In 2022-23, the OAS program provided $69.4 billion in benefits to 7.1 million individuals. This includes $16.1 billion in GIS benefits to 2.4 million low-income pensioners. 

The Government of Canada is committed to supporting seniors so that they are able to age with dignity. The Government has taken a number of significant steps since 2015 to enhance its supports for seniors.

In July 2022, the OAS pension was permanently increased by 10% for seniors aged 75 and over. This increase was designed to address the fact that as seniors get older, they tend to have lower incomes and often face higher health-related expenses because of the onset of illness or disability. This increased vulnerability is further compounded by a reduced ability to supplement their income with paid work, the risk of outliving personal savings and the risk of becoming a widow or widower.

This measure was put into place to help make life more affordable for Canadians as they age and has benefitted over 3 million OAS pensioners aged 75 and over in 2023-24.

OAS pensioners who receive little or no income, other than the OAS pension, are eligible for additional assistance through the GIS. The GIS is income-tested to ensure that this additional assistance is provided to those seniors most in need. Seniors with no other income than the OAS pension receive the maximum GIS benefit. To ensure that seniors are always better off by earning additional income, the maximum benefit is reduced by $1 for every $2 of other income.

The GIS Earnings Exemption is a provision under the OAS Act which allows GIS recipients who wish to remain active in the labour market to exempt a portion of their earnings from the calculation of their GIS benefit, helping them keep more of what they earn. Recipients of the Allowances can also benefit from the Earnings Exemption.

In order to further reduce barriers to work for low-income seniors, in July 2020, the Government of Canada enhanced the GIS Earnings Exemption in order to allow low-income seniors who work to keep more of their benefits. Since July 2020, a GIS recipient can fully exempt up to $5,000 of their annual employment and/or self-employment earnings, as well as a 50% exemption of their next $10,000 of earnings. This provides a total exemption of $10,000 of a person’s first $15,000 of employment and self-employment earnings.

To ensure that they retain their value over time, OAS benefits are reviewed four times per year (in January, April, July and October) in accordance with changes in the Consumer Price Index (CPI). The CPI measures the price of a collection of foundational goods and services, such as food, shelter, gas and clothing, commonly purchased by Canadian households. The quarterly indexation provides benefit increases to recipients when prices go up. In addition, the OAS Act contains a guarantee ensuring that benefits can never be reduced, even in the event of a decline in the CPI.

As of October 2024, OAS benefits will have increased by 2.8% over the past year (from October 2023 to October 2024). These benefits will continue to be adjusted in accordance with changes in the cost of living.

 Since 2015, the Government has also:

• restored the age of eligibility for the OAS pension and the GIS to 65 from 67, preventing about 100,000 future seniors from falling into poverty;
• increased the maximum GIS benefit for single seniors by 10% in July 2016, helping close to 900,000 seniors who rely almost exclusively on the OAS pension and the GIS, and providing up to almost $1,150 in additional benefits in 2023, indexed to inflation every quarter;
• provided a one-time grant payment to compensate seniors who faced financial hardship because they lost their GIS and Allowance benefits after receiving pandemic benefits. Moreover, to ensure this does not recur, the OAS Act was amended to exclude federal pandemic benefits received in 2021 or later from the calculation of GIS and Allowance benefits, beginning in July 2022; and,
• provided $6 billion over ten years to provinces and territories for the delivery of home care services for seniors who want to continue to live at home.

The Government also released Opportunity for All – Canada’s First Poverty Reduction Strategy in 2018. The Strategy offers a bold vision for Canada as a world leader in the eradication of poverty and is aligned with the United Nations Sustainable Development Goal of ending poverty.

Following the release of Opportunity for All,The Poverty Reduction Act (2019) entrenched into law:

• Canada’s Official Poverty Line, based on the Market Basket Measure (MBM);
• Poverty reduction targets corresponding to a 20% reduction in poverty by 2020 and a 50% reduction by 2030, compared to 2015 levels; and,
• The National Advisory Council on Poverty, to report on the Government’s progress toward meeting its poverty reduction targets.

The MBM is an absolute measure of poverty that establishes poverty thresholds based upon the cost of a basket of food, clothing, shelter, transportation, and other items representing a modest, basic standard of living.

Based on the latest results from the 2022 Canadian Income Survey, the poverty rate for seniors was estimated at 6.0% in 2022. This represents a 15% decrease in the seniors’ poverty rate compared to 2015 (7.1%).