Old Age Security (OAS) is a subsidy the Government of Canada pays to seniors who are age 65 and older.

As of April 2025, individual seniors with up to $90,000 of annual income receive $9,000 annually in OAS cash benefits.

Senior couples with up to $180,000 in annual income receive $18,000 annually in OAS benefits, because they can rely on pension income splitting to maximize their OAS subsidies.

All seniors are eligible for OAS if they are Canadian citizens or legal residents, and if they have resided in Canada for at least 10 years since the age of 18. Employment history does not determine eligibility for OAS. Seniors can still receive the subsidy if they have never worked, or if they are still working.

The money seniors get from OAS is not drawn from contributions they have historically made to the program. OAS is funded out of general government tax revenues, and is paid for by today’s taxpayers.

Under Canada’s current tax system, all Canadian seniors are also automatically eligible for the Pension Income Credit, and those with incomes up to $92,000 are also eligible for the Age Credit.

The Guaranteed Income Supplement (GIS) is a component of Canada’s Old Age Security (OAS) system that delivers additional non-taxable financial support to retirees with low incomes.

As of May 2025, single retirees with incomes below $22,056 are eligible to receive the GIS. Retired couples are eligible if their combined income is below:

• $29,136 if a spouse/common-law partner receives full OAS benefits.
• $52,848 if a spouse/common-law partner does not receive OAS benefits.

The figures we use on federal government spending on OAS includes spending on GIS.

Our plan to eliminate seniors’ poverty could be implemented by increasing GIS benefits. At present, eligible single retirees can receive up to $1,087 per month, or $13,044 per year. The $5,000 increase we propose would increase this amount by over 38%.

When OAS was created in 1952, things looked pretty different in Canada. We didn't have the Canada Pension Plan. We didn't have as many tax shelters for retirees, like the Age Credit and the Pension Income Credit. People didn't expect to live for as many years post retirement. And we had 7 working age Canadians paying taxes to help support each retiree - now there are only 3 worker per retiree.

With all of the changes that have taken place between 1952 and today, it's no surprise that we're well past due on updating OAS. It's time to make sure OAS is fit for purpose in 2025.

Our plan would affect only 1 in 5 retirees, and only those with household incomes above $100k (well above the median in Canada). We’re asking this 20% to take about $3,200 less after-tax income.

If you think this change risks compromising their standard of living, please watch our videos to hear directly from some of them about why this isn’t true. Or subscribers can read the Globe & Mail’s Financial Facelift section for shocking stories of how financial planners help seniors maximize OAS payments – whether they need them or not. Or here’s a free column from us.

OAS is not the Canada Pension Plan (CPP). Today’s retirees have not paid into OAS in proportion to the benefits they now receive – even if they worked hard and paid taxes according to the rules of the day.

In anticipation of the baby boom cohort aging, the government changed CPP so Canadians could collect a benefit relatively proportionate to what they contributed. Sadly, Ottawa didn’t do the same for OAS. It remains a government subsidy paid to whomever is eligible – and eligibility rules are far more generous than for most other cash benefits. The generosity of OAS for affluent retirees is now a primary reason we leave a half million seniors in poverty, and rack up large deficits that our kids and future generations will inherit.

After OAS, the Canada Child Benefit (CCB) is probably the best-known cash subsidy delivered by Ottawa. Families receiving the CCB don’t benefit from the same level of generosity extended to retirees.

Ottawa claws back the Canada Child Benefit from families with kids when their household income surpasses $79,000. By contrast, retired couples can have $180,000 in combined income before OAS payments are reduced. This disparity persists even though compared to young families, retirees have the lowest rates of poverty, the highest levels of wealth, and a great deal of housing security (since 70% are home owners).

Sadly, fewer than half of Canadians are aware that low-income families with kids receive smaller cash benefits than retirees. Younger age groups are somewhat more likely to be aware of the discrepancy, but just 31% of Canadians ag 65+ know that the cash benefits they receive exceed what’s available to families with kids.

Liberal, Conservative and NDP governments across Canada are running large deficits. This trend is a threat to generational fairness, because younger and future generations will be saddled with the bills we leave unpaid today. To help understand why this is happening, we took a look at how income taxes have changed over the last 5 decades. Here’s what we found.

Income taxes are lower today than when baby boomers were young.

Because income tax rates are generally lower now than they were half a century ago.

Today’s retirees consume a larger share of the revenue governments collect via income taxes, compared to what we collectively spent on retirees when the baby boom generation was young.

Despite lower tax rates, more tax dollars go to retirees’ medical care and Old Age Security today than half a century ago. This is because the percentage of Canada’s population over age 65 has increased from 8% in 1976, to 19% in 2024.

A larger share of the tax dollars paid by younger people today goes to support retirees, compared to what retirees paid to support older generations when they were young.

The typical 35-year-old now pays around 20-40% more for boomers’ Old Age Security and medical care than boomers paid as young people to support the smaller number of seniors in their day.

Together, these trends result in governments having fewer funds to invest in younger generations — even though these age groups face greater financial insecurity and declining wellbeing. That’s not investing fairly in young and old alike.

Learn more in our full tax trends analysis.

OAS is the largest line item in the federal budget. Fully one-fifth of all federal spending goes to OAS, and this amount is growing faster than most other expenditures put together.

It is impossible to restore balance to the federal budget without factoring in OAS. Politicians who say otherwise are trying to pull the wool over your eyes. There may be other things to cut – and reasonable people can disagree about what these are – but most of the frequently cited targets are simply too small to fill our growing budget hole.