Old Age Security for the third quarter of 2007 is paid at a maximum rate of $497.83, subject to a clawback that begins at $63,511 and ends at $103,101 when the clawback reduces OAS to zero. For single persons whose income, not including OAS, is less than $15,096, the Guaranteed Income Supplement is paid at a maximum rate $628.36, and for couples both over 65, and if income is less than $19,920, $414.96 per person per month.
Financial planning for retirement usually begins with the concept of preserving Old Age Security. The clawback, which reduces OAS payments at a rate of 15 cents for each dollar over $63,511, is effectively a tax on income received over that amount. Therefore taxpayers who want to preserve their OAS benefits look to income splitting, often done by the simple expedient of shifting RRSP contributions to a spouse with a significantly lower income or shorter tenure in the labour force (which generally results in lower CPP entitlements).
| Type of Benefit | Recipient | Average monthly benefit (March 2007) |
Maximum Monthly Benefit | Maximum Annual Income |
|---|---|---|---|---|
| Old Age Security Pension | All recipients | $466.88 | $497.83 | See note |
| Guaranteed Income Supplement | Single person | $436.16 | $628.36 | $15,096 |
| Spouse of pensioner | $272.34 | $414.96 | $19,920 | |
| Spouse of non-pensioner | $413.26 | $628.36 | $36,192 | |
| Spouse of Allowance recipient | $344.62 | $414.96 | $36,192 | |
| Allowance | All recipients | $359.44 | $912.79 | $27,888 |
| Allowance for the survivor | All recipients | $567.59 | $1,011.80 | $20,304 |
Note: Pensioners with an individual net income above $63,511 must repay part or all of the maximum Old Age Security pension amount. The repayment amounts are normally deducted from their monthly payments before they are issued. The full OAS pension is eliminated when a pensioner's net income is $103,101 or above.
For detailed monthly rates, please refer to the Tables of Rates for Old Age Security, Guaranteed Income Supplement and the Allowance.
| Type of benefit | Average Monthly Benefit (October 2006) |
Maximum Monthly Benefit (2007) |
|---|---|---|
| Disability benefit | $772.88 | $1053.77 |
| Retirement pension (at age 65) | $473.09 | $863.75 |
| Survivors benefit (under age 65) | $347.89 | $482.30 |
| Survivors benefit (age 65 and over) | $293.75 | $518.25 |
| Children of disabled contributors benefit | $200.47 | $204.68 |
| Children of deceased contributors benefit | $200.47 | $204.68 |
| Combined survivors & retirement benefit (pension at age 65) | $667.48 | $863.75 |
| Combined survivors & disability benefit | $911.00 | $1053.77 |
| Death benefit (max lumpsum) | $2,227.82 | $2,500.00 |