Saturday, December 22, 2012

Canadian OAS

As a Canadian living for many years in the USA I had not considered applying for a Canadian Old Age Security pension, thinking that the claw back clause would probably eliminate most of it. I also wondered if it would have an impact on my US Social Security. However when I called Service Canada last year they urged me to apply and said that I would receive the benefits I was entitled to without clawback or impact on Social Security. I did apply and it took about a year to finalize but I am happy to say that I am now receiving $245 per month that I wasnt before. Also, since it is a government pension which I didn't specifically contribute to, it is paid out of general taxes, it is not considered in terms of the USA Windfall Provision on Social Security. Much of this is because of the treaty between Canada and the USA on pensions. To be eligible for OAS one has to have resided in Canada and paid taxes for 10 years after the 18th birthday. If you live outside Canada you need to have 20 years to receive the pension. Since there is a treaty with the USA, Canada takes into account the time residing in the USA as well. For example I lived in Canada for nearly 19 years and then 27 years in the USA, so I was eligible to receive the OAS. To calculate it they take the ratio of the number of years you resided in Canada to 40 years, which is the maximum number, and multiply it times a dollar amount. In my case that worked out to $245 per month. Then they calculate any back payments to your 65th birthday and send you the money. It's worth looking into and applying for. Tom