2012 Federal Budget
Here are the highlights of the federal budget introduced on March 29, 2012 by the Minister of Finance Jim Flaherty.
PERSONAL INCOME TAX MEASURES
Old Age Security (OAS)
Age of Eligibility
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. The individuals who are really affected by these new measures are those born on February 1, 1962 or later. Those who were born between April 1, 1958 and January 31, 1962 will have an age of eligibility between 65 and 67. Option to Defer the OAS Pension To improve flexibility and choice in the OAS program, starting on July 1, 2013, the Government will allow for the voluntary deferral of the OAS pension, for up to five years. It will be possible to receive an enhanced OAS benefit if benefits are deferred after age 65.
For example, an individual who applies for OAS at age 65 in 2012 would receive $6,481 per year. With the proposed measures, this individual could defer the pension to age 70 and receive $8,814 per year. The proposed increase represents 7.2% per year. From a purely mathematical point of view, the crossover point is reached around age 83... read more