LINE 113 - OLD AGE SECURITY PENSION
Please note ...
In 1989 and 1990, if your Net Income BEFORE adjustments (line 234) is over
$50,000, you will have to pay back part of your OAS. See LINE 235 section for
worksheet.
This line refers
to the Old Age Pension which is given to almost all Canadians at the age of
65. There are no qualifying tests other than residence and age. Enter the
amount from Box (F) if you received a T4A (OAS) slip or the amount in Box (K)
if you received a T4(P) slip. Do NOT report any Guaranteed Income Supplement
or spouse's allowance received. GIS and spouse's allowances are not taxable
BUT if your spouse received either, you must take them into account for net
income purposes if you wish to claim your spouse as a dependent on line 303,
Page 2 or Line 326 if you try and transfer deductions from your Spouse on
Schedules 7 and 8 for 1988 and Schedules 7 and T1C and the new GST form for
1989 and 1990.
Please note again!
Guaranteed Income Supplement payments do not go in this space. The amount on
line 113 should never exceed THE BASE MONTHLY PENSION TIMES THE NUMBER OF
MONTHS YOU RECEIVED THE PENSION UNLESS a retroactive payment for 1989 pension
was paid in 1990, or 1987 in 1988, or 1988 in 1989. etc. If this was the case,
it is important to make sure that the retroactive amount was also not included
on the 89, 87 or 88 tax return.
The most important
requirement before collecting the pension is that you must have reached the
age of 65. Health and Welfare Canada requires that you prove this by filing
certain documents. They prefer a birth or baptismal certificate, but they
understand that many people were born in circumstances where proper records
were not kept, so other suitable documents will be accepted. If you have
difficulty in securing these documents, do not delay your application because
of this. Merely indicate in your application that the proof of age will
follow.
To qualify for an
Old Age Security Pension you must have fulfilled certain residence
requirements. Since July 1, 1977, there are two separate sets of rules that
apply in this area. The new rules are being phased in over a 40-year period,
but effectively for all people turning 65 before July 1, 1987 the more
favorable set of rules will apply.
Under the old
rules the Old Age Security Pension is an all or nothing payment. There are
three ways to qualify under these rules:
1. By having lived
in Canada for any full 40 years since your 18th birthday;
2. By having lived
in Canada continuously for the last 10 full years, or;
3. By having lived
in Canada for the last full year before making the application and by making
up any absences from Canada in the last ten years with three times that amount
of time in Canada in the preceding period since your 18th birthday. As an
example of using this last method if you made up your last year of residence
with July, 1978 at age 68, and had previously spent all of 1970, 1971 and 1973
and no other time in Canada in the last ten years, your period of absence in
that ten years would be 10 - 4 = 6 years and would have needed 6 x 3 = 18
years in Canada between your 18th birthday and July 1968.
Obviously if you
can qualify under these rules you will have them applied since they will give
you the full pension. In determining the amount of time absent from Canada
short periods of temporary absence such as for vacation or going to school are
not counted.
Under the new
residence rules all that is needed to qualify you for a pension is 10 full
years of residence in Canada since your 18th birthday. The full amount of Old
Age Security Pension is then multiplied by the number of full years spent in
Canada since your 18th birthday and divided by 40. If you have resided more
than 40 years in Canada you would of course receive the full pension. The new
rules apply whenever you cannot qualify under the old ones.
There is a
catch here!
Once you have begun receiving a partial pension any further time spent in
Canada cannot be used to increase your pension. If you aren't careful this
could have a drastic affect. Let's look at an extreme example. You became a
landed immigrant to Canada for the first time in 1977 and spent one full year
here at that time. Then, because of a very good job opportunity, you went
overseas and did not return to Canada until late March 1981. In April, 1990
(having some time earlier reached your 65th birthday) you fulfill the minimum
10-year requirement for receiving a partial pension of 10/40 of the full
amount, but you cannot increase this later. If you forego your application for
a further 8 months you will give up 8 months of partial pension at 1/4 of the
full amount (the dollar equivalent of two months of full pension) in order to
be eligible for the full amount of the pension for the rest of your life.
Finally, in order
to have the Old Age Security Pension continue being paid to you for more than
6 months when you are out of the country, you must have had at least 20
years of residence in Canada since your 18th birthday. This is not
affected by the date on which you began the pension, so that if you qualified
for the pension with 19 years of residence, then after one more year of
residence, you could apply for the pension to be paid to you anywhere in the
world.
HOW AND WHEN TO APPLY
An Old Age
Security pension cannot be paid until an application has been made and
approved. Application forms are available at all Post Offices, Old Age
Security, and Canada Pension Plan offices in Canada. All questions on the form
should be answered fully. When you have completed the application form, mail
it in the envelope provided, to the Regional Old Age Security Office in the
capital of the province in which you live; if you no longer live in Canada,
mail it to the regional office in the province in which you last resided. If
possible, a copy of proof of age should be sent in with the application form.
If you have not yet obtained proof of age documents, your application should
not be delayed because of this. Proof of age can be obtained and mailed later.
You should apply
six months before becoming eligible for the pension. This will allow
time for proof of age to be obtained, if necessary, and for your history of
residence to be confirmed.
If any person
cannot make an application because of infirmity, illness, or any other good
reason, someone else may apply on his or her behalf.
ASSISTANCE IN APPLYING FOR AN OLD AGE
SECURITY PENSION
If you require
assistance in completing an application for the Old Age Security pension, you
should get in touch with the Old Age Security office in your province or the
nearest Canada Pension Plan office. Representatives of these offices will make
home visits when necessary.
If there is a
CEN-TA Group office near you, the consultant there will be pleased to help
you with the application.
PLEASE NOTE.
1989 WAS THE LAST YEAR THAT THE GROSS AMOUNT OF OAS AND CPP MAY BE TRANSFERRED
TO AN RRSP. HOWEVER FOR 1991, you will be able to roll over $6,000 into a
Spousal plan. Also for 1990 and 1991, you must transfer any RRSP or Pension
monies DIRECTLY from plan to plan. You may no longer take the money into your
possession for a couple of months, and then redeposit it into another plan
after using it for an intermediate purpose.
Old Age Security
payments were $337.04 a month in Jan 1989 and went to $340.07 in 1990 and
$354.92 in 1991. They can be changed every three months with indexing to the
(excess over 3%) CPI (Consumer Price Index).
LINE 114 - CANADA OR QUEBEC PENSION
PLAN BENEFITS
Simply fill in the
amount shown on the orange or brown slip T4A(CPP) which you received from the
Canada Pension people. If the amount is incorrect or you don't receive the
slip, contact your nearest Canada Pension Plan office.
For want of a
better place to put this, I shall now outline some facts about the Canada
Pension Plan which every Canadian should know.
The Canada Pension
Plan is not just a retirement plan that one receives at the age of 65. Under
the CPP umbrella are: death benefits; retirement benefits; benefits for
orphans of deceased contributors; widows' and widowers' benefits; disability
benefits; and also benefits for children of disabled contributors.
RETIREMENT BENEFITS
Contributions must
have been paid in for one year. This does not mean a whole year; it could have
been paid in for only one month's work if you earned over the annual minimum
below:
<$&TABLE1[-]>Low
earnings would not qualify you for a large pension, but there would be
something and you should apply for it. If the amount is very low it will be
paid in quarterly or annual amounts. The maximum retirement benefit for 1988
was $543.06 per month, for 1989, it was 556.25 per month, for 1990 it was
$577.08 per month and for 1991 it is $604.86 per month reducing by .05% for
each month it is taken out prior to age 65, because, yes, you may now take it
out at age 60. (As a matter of interest, in 1984, it was $387.50 per month -
inflation helps.)
