e-4708 (Social affairs and equality)

The Old Age Security (OAS) program plays a critical role in providing income security to Canadians in their senior years, particularly lower-income seniors. The benefits under the OAS program include the basic pension, which is paid to all persons aged 65 or over who meet the residence requirements, the Guaranteed Income Supplement (GIS) for low-income recipients of the OAS pension, and the Allowances for low-income Canadians aged 60 to 64 who are the spouses/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. 

To ensure they retain their value over time and to protect the purchasing power of beneficiaries, 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.

Quarterly indexation provides increases to OAS beneficiaries when prices go up. As of April 2024, OAS benefits have increased by 3.2% over the past year (from April 2023 to April 2024), protecting the value of benefits received by Canadians.

In addition, the Old Age Security Act (OAS Act) contains a guarantee ensuring that benefits can never be reduced, even in the event of a decline in the CPI. Should the average cost of living decrease, OAS benefit amounts stay at the same level as during the previous three-month period.

The Government remains committed to improving the income security of all seniors and continues to seek ways to strengthen the OAS program for all seniors, as demonstrated by a broad range of measures. Since 2015, the Government has:

•         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;

•         enhanced the GIS Earnings Exemption so that low-income seniors who work can keep more of what they earn. As of July 2020, the enhanced exemption applies to employment and self-employment income and provides a full exemption on up to $5,000 of annual earnings as well as an additional 50% exemption on employment and self-employment income between $5,000 and $15,000. This means that working GIS recipients can earn up to $15,000 in employment and self-employment income before the GIS benefit reduction applies to their full income;

•         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,

•         increased the OAS pension by 10% for seniors 75 years and older in July 2022, which provided over $800 in additional financial support to full pensioners aged 75 and over during the first year.

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. These thresholds can be adjusted to reflect families of different sizes. If a family’s disposable income is below the applicable threshold for the region in which they live, they are considered to be living in poverty.

The current MBM methodology establishes poverty thresholds for 53 different geographic regions in the provinces, including 19 major cities, and 13 geographic regions in Yukon, the Northwest Territories and Nunavut. This allows the MBM to be sensitive to regional differences in living costs.

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%). Despite a lower poverty rate than in 2015, there were approximately 36,000 more seniors living in poverty in 2022, owing to an increase in the overall population of seniors between 2015 and 2022.