Canadian retirees have fresh reassurance this summer. Beginning July 2025, the federal government has announced a modest increase to Old Age Security (OAS) benefits, bringing much-needed relief to seniors grappling with rising living expenses.
Those aged 65–74 will now receive \$735.35 per month, while individuals aged 75 and older will collect \$808.44. The change reflects a 1% quarterly adjustment, driven by inflation-linked indexing. Though not a dramatic raise, for seniors living on fixed incomes, the extra monthly support is a welcome addition in an era where affordability challenges are front and center.
Why the OAS benefit is increasing
OAS benefits are not static—they are directly linked to the Consumer Price Index (CPI), ensuring that payments adjust in response to changing costs of living. Every three months, the Canadian government reviews CPI trends and updates OAS payments accordingly.
For the period of July to September 2025, the adjustment landed at 1.0%, representing a 2.3% increase compared to last year. This ongoing commitment provides seniors with a measure of financial protection against inflationary spikes, even if the increases sometimes feel modest compared to real-world cost pressures.
Updated OAS payment amounts for July 2025:
| Age Group | Monthly OAS (July 2025) |
|---|---|
| 65 to 74 | \$735.35 |
| 75+ | \$808.44 (includes 10% age-based boost) |
This distinction between age groups reflects a permanent 10% increase introduced in 2022 for Canadians aged 75 and older, recognizing the additional challenges faced by older seniors.
Who qualifies for Old Age Security?
Eligibility for OAS is not automatic for everyone. To qualify, Canadians must meet certain requirements:
- Be at least 65 years old.
- Be a Canadian citizen or legal resident.
- Have lived in Canada for at least 10 years since turning 18.
Many Canadians are enrolled automatically as they approach 65, but it’s still important to verify through a My Service Canada Account. This ensures that paperwork and eligibility details are up to date so payments begin on time.
For those who have lived and worked abroad, eligibility may vary depending on Canada’s social security agreements with other countries.
Additional supports available alongside OAS
OAS alone may not cover all retirement needs, especially for low-income seniors. Fortunately, several additional programs exist:
- Guaranteed Income Supplement (GIS): Provides extra monthly payments to low-income OAS recipients.
- Allowance: Available for low-income spouses or common-law partners aged 60–64 of GIS recipients.
- Allowance for the Survivor: Supports low-income widows or widowers aged 60–64.
These add-ons can significantly increase monthly income and are often underutilized by eligible seniors. Checking eligibility for these programs is essential for maximizing retirement income.
When to expect July 2025 payments
OAS payments follow a consistent schedule. They are usually issued on the third-to-last business day of each month. For July 2025, payments are expected to land between July 27 and July 29, though the exact deposit date may vary depending on banking institutions.
For seniors relying on these funds to manage bills and daily expenses, knowing payment timing in advance can help ensure smoother budgeting.
The tax factor – OAS and clawbacks
Unlike some benefits, OAS payments are taxable income. Recipients must report them on annual tax returns. However, by default, no taxes are deducted at source unless requested. Seniors can choose to have taxes withheld from each payment to avoid large bills at tax time.
There’s also the OAS clawback rule, formally known as the OAS recovery tax. If your annual income exceeds \$90,997 in 2025, your OAS will be gradually reduced. The full clawback applies if income reaches:
- \$148,541 for those aged 65–74
- \$154,196 for those aged 75+
High-income seniors should plan carefully, as clawbacks can reduce or eliminate OAS payments entirely.
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Should you delay OAS? Strategic planning matters
For Canadians nearing 65, deciding when to start OAS is a major financial choice. The program allows individuals to delay benefits for up to five years. Each month of deferral increases payments by 0.6%, to a maximum of 36% at age 70.
This strategy can be beneficial for seniors still working past 65, or those expecting higher income later in retirement. It ensures larger, inflation-protected payments down the road.
On the other hand, taking OAS at 65 may make more sense for individuals with lower life expectancies, greater immediate needs, or limited retirement savings. Consulting with a financial planner can help make the best choice based on personal circumstances
OAS in the broader retirement income system
OAS is just one piece of Canada’s retirement income framework. It works alongside:
- Canada Pension Plan (CPP): Provides retirement, disability, and survivor benefits based on contributions.
- Private pensions or workplace retirement plans.
- Personal savings tools such as RRSPs and TFSAs.
Together, these sources aim to create a reliable safety net, though gaps remain—especially for Canadians without employer pensions or significant personal savings. For many, the OAS increase in July 2025, though modest, plays an essential role in maintaining financial stability.
The inflation challenge for seniors
While the government’s indexing system keeps OAS benefits tied to inflation, critics argue that the increases often lag behind real-world costs. Seniors across Canada have highlighted growing pressures from:
- Rising grocery and food prices.
- Higher housing costs, particularly for renters.
- Escalating utility and energy bills.
- Out-of-pocket healthcare expenses.
For seniors living alone or without additional pension income, even modest hikes in OAS can feel insufficient. The July 2025 increase underscores both the importance of the program and the limits of its effectiveness in combating today’s affordability crisis.
Planning ahead – steps for seniors
To make the most of OAS and related programs, seniors should consider:
- Checking eligibility online: Use My Service Canada Account to verify payments and enrollment.
- Exploring supplements: Apply for GIS or allowances if income is low.
- Considering deferral: Delaying OAS can boost lifetime benefits for those who can afford it.
- Planning for taxes: Decide whether to have withholding applied to avoid tax surprises.
- Reviewing retirement budgets annually: Adjust spending plans as benefits increase.
These steps can help seniors maximize the value of their benefits while avoiding pitfalls such as clawbacks or unexpected tax liabilities.
5 SEO-Friendly FAQs
Q1: How much is the OAS payment in July 2025?
Canadians aged 65–74 will receive \$735.35 monthly, while those 75 and older will get \$808.44.
Q2: Why are OAS payments increasing in 2025?
The increase is based on quarterly inflation adjustments tied to the Consumer Price Index (CPI).
Q3: When will July 2025 OAS payments arrive?
Payments will be deposited between July 27 and July 29, 2025, depending on the bank.
Q4: Is OAS taxable income?
Yes. OAS must be reported on annual tax returns. Seniors may request tax withholding to avoid large year-end bills.
Q5: Can I delay my OAS payments for a larger benefit?
Yes. Deferring OAS for up to five years increases payments by 0.6% per month, up to a 36% boost at age 70
