Facing rising living expenses, Canadian seniors may be able to receive substantial monthly financial assistance through a combination of federal pension programs. While the various federal programs have different monthly payment amounts, seniors are eligible to combine multiple payments to receive substantial monthly totals.
Maximizing the Benefit of your Pension
Reaching the desired monthly pension payments is easier when a senior understands how to optimize Canada’s retirement benefits systems. The Old Age Security (OAS) payment program is a pillar of the Canadian pension plan.
Seniors qualify for OAS with a base amount of $734.95 for the age bracket 65 to 74 and $808.45 for 75 and older due to a permanent 10% increase effective 2022.
Strategic delayed benefit claiming yield higher rewards. OAS is a pension that can be claimed starting at 65, and has a deferral option until 70.
The deferral cap is 36% for each of the 3 years, with a bonus of 0.6% for each month delayed. This not only makes OAS provide nearly $1,000 a month, but provides significant benefit for lifetime payments.
Furthermore, Canada Pension Plan (CPP) provides an additional layer of payment support with a maximum of $1,433 for monthly claims at 65, and an average payment of $844 based on individual work history.
Combining Benefits for Maximum Financial Support
Low income seniors have access to additional support through the Guaranteed Income Supplement (GIS) which pays out as much as $1,086.88 a month for single seniors whose yearly earnings are under $21,768. This non-taxable benefit significantly supplements monthly income for eligible seniors.
Enhancements to the support structure exist on a provincial level. GAINS, a part of the Ontario provincial program, supplements up to $87.00 a month to qualifying seniors, which is an addition to the federal benefit. Though these provincial supplements are smaller, they nonetheless support the federal provisions significantly.
The Allowance for the Survivor program issues monthly allowances up to $1,647.34 to surviving spouses aged 60 to 64, which helps during tough life transitions. Partners of GIS recipients are eligible for these allowances and may qualify for $1,381.90 monthly.
The resulting combination of these several programs (OAS, CPP, GIS, and provincial supplements) enable seniors to access thorough monthly support. The timing of receiving benefits, especially the decision to defer OAS, impacts the total lifetime pension income. These critical decisions around pre-retirement hinges on the senior’s personal health, wellbeing, and financial situation.
Main stipulations consist of: Canadian citizenship or legal residency, a minimum of ten years of residency after age 18 for partial Old Age Security (OAS) benefits, and several income limits for supplementary programs in place to ensure the benefits go to the intended target population.