OAS Benefits

Written by Johnny Kwong, CPA on Nov. 29, 2016

What is the value of deferring my OAS benefits, sometimes also called OAS pension, to a future year?

There are several reasons why you might want to defer your OAS benefits, such as:

1)     Based on current and future sources of income you may be able to keep thousands more.

2)     You’re planning to work past 65 years of age;

3)     You’re in good health;

4)     Your overall financial and retirement plan indicate it’s a good idea.

Some questions that may come to mind when you think that you may want to defer your OAS benefits are:

Why would I want to defer OAS benefits?

The main reason to defer OAS benefits is that there is a claw back rule that states that your OAS benefits are to be repaid if your net income in 2016 exceeds $73,756. The repayment is 15% of income above this amount to a maximum of the OAS benefit that was received in the year.

So, if your income when you are 65-70 is expected to be over $120,000 you will have to repay all of the OAS benefits that you receive.  There is absolutely no benefit in receiving those benefits in those years. You would be much better off to defer the receipt of those benefits until you are 7o and increase the monthly amounts that you will receive at that time by 36% as described below.

What is the value of deferring OAS benefits?

By deferring your OAS pension, your monthly pension payment will increase by 0.6% for every month you delay receiving it, up to a maximum of 36% at the age of 70. It should be noted that there is no financial benefit in deferring your OAS pension after the age 70.

How long can you defer accepting OAS benefits?

Service Canada allows individual to defer receiving OAS for up to 60 months (5 years) after you become eligible.

How do I notify Service Canada that I want to defer my OAS pension?

There are two ways to notify Service Canada that you want to defer your OAS pension:

  • Access your my Service Canada account and follow the guidelines to delay receiving your OAS pension.
  • Service Canada implemented a process to automatically enroll seniors who are eligible to receive the OAS pension. So in the month after you turn 64, you will receive an automatic enrolment letter by mail and you can defer your OAS pension by signing and returning the automatic enrolment letter by mail.

How do I notify Service Canada when I want to start receiving my OAS benefits?

If you choose to delay receiving your OAS benefits, you can apply up to 11 months before the date you want your OAS benefits to start.

If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.

Thanks to Johnny Kwong of KWB Chartered Accountants for providing this content.

Johnny Kwong, CPA


Johnny received his Bachelor of Commerce Degree in 2011, from Athabasca University. In April 2013, he joined the KWB team and began pursuing his CPA designation. He was officially admitted as a CPA member in December 2016 and continued working as a Senior Staff Accountant at KWB. In February 2019, Johnny was promoted to the role of Manager at KWB, and now continues to expand his knowledge and experience in a variety of areas.

In his personal life, Johnny is a proud father to two beautiful girls, who regularly surprise him with their own achievements. He and his wife are continuing to enjoy all the experiences of their parenting journey…except for the still persisting lack of sleep. In his minimal spare time, Johnny enjoys watching movies, going for long walks, and still attempts to find time to sneak in a date night here and there.

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