As set out in Chapter 4 of the 2012 Federal Budget::
The Old Age Security (OAS) program is financed from the Government of Canada’s general revenues and provides a monthly pension to most Canadians 65 years of age or over. The maximum annual OAS pension is $6,481.
The Government provides additional support to low-income seniors through the Guaranteed Income Supplement (GIS). The maximum annual GIS benefit is $8,788 for single seniors and $11,654 for couples.
The OAS program provides approximately $38 billion per year in benefits to 4.9 million individuals.
The changes are as follows:
Economic Action Plan 2012 introduces changes to the age of eligibility for OAS benefits, to be phased in gradually, starting in 2023. As well, Economic Action Plan 2012 introduces the option to defer the OAS pension and receive an actuarially adjusted pension, starting on July 1, 2013.
The age of eligibility for OAS and GIS will be gradually increased from 65 to 67, starting in April 2023, with full implementation by January 2029. An 11-year notification period, followed by a 6-year phase-in period, is being provided to ensure that individuals have significant advance notification to plan their retirement and make adjustments.
This proposed legislative change to the age of OAS/GIS eligibility will not affect anyone who is 54 years of age or older as of March 31, 2012. Thus, individuals who were born on March 31, 1958 or earlier will not be affected. Those who were born on or after February 1, 1962 will have an age of eligibility of 67. Those who were born between April 1, 1958 and January 31, 1962 will have an age of eligibility between 65 and 67. For example, as shown in Table 4.2, someone born in April 1960 will be eligible for OAS/GIS at age 66 and one month.For many, the change will mean working until an older age. But how will this change affect those who are receiving disability benefits under plans that end at age 65? Will this affect private and public disability plans? Will it lead to higher costs for disability insurance?