Working While Receiving OAS: What If I Keep Working While Getting OAS? Any Extra Benefit?

Vish Agarwal
Vish Agarwal
Working While Receiving OAS

Check out the information on Working While Receiving OAS: What If I Keep Working While Getting OAS? Any Extra Benefit? from this article. More details regarding Working While Receiving OAS: What If I Keep Working While Getting OAS? Any Extra Benefits? and other notable things are included in this article.

Working While Receiving OAS

Old Age Security is paid each month to qualified individuals who are aged 65 and older. Generally, people are automatically enrolled in the OAS pension by the Service Canada. However, Service Canada cannot enroll a person if they don’t possess enough information on the individual.

In this situation, they have to apply for the OAS manually. An individual may be allowed to receive OAS while they are working. However, they have to pay back the pension if their income exceeds the income recovery threshold.

Important Links

  1. Child Benefit Payments
  2. Cost of Living Payment
  3. Housing Benefit Dates
  4. Benefit Payment Dates
  5. Worker Benefit Payment

OAS Overview

Name Old Age Security
Administered by Government of Canada
Country Canada
Beneficiaries Citizens of Canada
Age requirements 65 or older
Payment (October – December 2024) $707.68 (Aged 65 – 74) and $778.45 (Aged 75 or more)
Minimum Income Recovery Threshold (2022 Tax Year) $81,761
Maximum Income Recovery Threshold (2022 Tax Year) $134,626 (Aged 65 – 74) and $137,331 (Aged 75 or more)
For more information Canada.ca

What If I Keep Working While Getting OAS?

A person can work while they receive OAS after reaching the qualifying age. People can be working while receiving an OAS pension for a number of reasons. Although they can work and earn more income, their income shouldn’t exceed the minimum income recovery threshold for a particular tax year.

Working While Receiving OAS

If the income goes over this limit, a recovery tax will be applied to their OAS pension. The more they earn over the set threshold,  the higher the amount they will have to pay back.

This is why people should consider their circumstances and estimate how much their net income will be if they decide to keep working while receiving the OAS pension. In case they estimate that their income will not exceed the set threshold, they can keep working while receiving the OAS pension.

The complete information on the OAS Recovery Tax, minimum and maximum thresholds, and other relevant aspects of the OAS can be learned by visiting the authorized web portal of the Canadian Government.

Is there any Extra Benefit?

It is up to the individuals to decide whether they wish to keep working while receiving the OAS or not. There isn’t any specific benefit if people decide to keep working while receiving the OAS Pension.

However, they can get extra income to meet their needs in case the OAS Pension is not sufficient for them. They can keep working without worrying about the OAS Recovery Tax as long as their income stays under the set threshold.

In case people don’t start their OAS pension after turning 65, they can get a higher pension amount depending on how long they have delayed. Generally, people can delay their OAS for up to 5 years. Although they can delay even after 70, there is no benefit in doing so. Moreover, if they delay the OAS Pension longer than 70 years, they won’t be able to access certain benefits, such as GIS.

OAS Recovery Tax

The recovery tax is applied if the net world income exceeds the threshold of a particular year. The minimum and maximum threshold amount associated with the OAS Recovery Tax changes every year.

For income tax year 2022, the minimum threshold is set at 81,761 dollars and the maximum threshold is set at 134,626 (Age 65 – 74) or 137,331 (Age 75 or more).

Tax Year Recovery Tax Period Minimum Threshold Maximum Threshold (Age 65 – 74) Maximum Threshold (Age 75 or more)
2022 July 2024 to June 2024 81,761 dollars 134,626 dollars 137,331 dollars
2024 July 2024 to June 2025 86,912 dollars 142,609 dollars 148,179 dollars

The minimum amount for both age groups stays the same, while the maximum amount is different for both age groups. The recovery tax period for the 2022 income tax year is from July 2024 to June 2024.

The repayment amount will be based on the difference between the net world income and the set threshold. Individuals whose income exceeds the threshold have to pay 15% of the difference between the net world income and the set threshold.

Important Links

  1. Child Benefit Payments
  2. Cost of Living Payment
  3. Housing Benefit Dates
  4. Benefit Payment Dates
  5. Worker Benefit Payment

For example, a person is working while receiving the OAS pension. If the income of this person in 2022 was 96,000 dollars, the repayment calculation will be done as -Net World Income – Income Threshold (2022).

So, 96,000 dollars – 81,761 dollars = 14,239 dollars. Now, apply 15% to the result of the calculated difference. It will be 2,136 dollars. This means that the person has to pay 2,136 dollars in the July 2024 to June 2024 recovery tax period.

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A seasoned tax analyst renowned for his expertise in international taxation. Vish's contributions to the tax news blog provide readers with valuable insights into the complexities of cross-border taxation and compliance.
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