How Much Will You Receive from Public Programs in Retirement?

Public retirement plans from the Government of Canada and the Gouvernement du Québec provide a basic minimum income in retirement, subject to certain conditions.

Benefits from the federal Old Age Security program

Old Age Security (OAS) pension

• The amount of the OAS pension is determined based on the number of years of residency in Canada.
• The amount is taxable.
• From October to December 2024, you might have to repay part or all of your OAS benefits. It is the case if your individual net income for 2023  exceeds $86 912 (including OAS benefits). The repayment is equal to 15% of the portion of your net income (including OAS benefits) that exceeds $86 912. However, you cannot repay an amount that is greater than the total of your OAS benefits. The repayment is generally deducted from your benefits. You do not receive any OAS pension if your net income exceeds $142 609 for persons aged between 65 and 74 and $148 179 for persons aged 75 and over.

Guaranteed Income Supplement (GIS)

• To be eligible for the GIS, you must be a pensioner, that is, a person who receives an OAS pension or whose pension application has been approved.
• As indicated in the preceding table, there are 2 levels for the GIS:
  
  • The first ($1086.88) applies to single pensioners, including widowed, divorced or separated persons, as well as in the case where only one spouse is a pensioner and the other is not eligible for the OAS pension or the Allowance.
  • The second ($654.23) applies when both spouses are pensioners. Each spouse is then eligible for his or her own benefit.
• Maximum annual income includes all income (combined for a couple), with the exception of OAS benefits. No GIS is paid if your maximum annual income is greater than the indicated amounts.
  • The OAS pensioner is single, widowed, divorced or separated: The maximum monthly amount is reduced by $1 for each $2 from another monthly income source, excluding the OAS pension.
  • Both spouses are OAS pensioners: The maximum monthly amount for each person is reduced by $1 for each $4 of their monthly combined income, excluding their OAS pensions.
  • Only one spouse is an OAS pensioner and the other is not eligible for the OAS pension or the Allowance: The maximum monthly amount is reduced by $1 for each $4 of combined monthly income, excluding the OAS pension.
• GIS benefits are not taxable.
• If you receive a partial pension under the OAS program, the maximum amount of your GIS benefits could be increased.

Allowance and Allowance for the Survivor

• The maximum monthly amount is equal to the sum of the OAS pension and the GIS at the rate of a spouse of a pensioner. The amount paid to a person whose spouse is deceased could be higher.
• The maximum annual income includes all income (combined for a couple), with the exception of the OAS pension. No Allowance is paid if your maximum annual income is greater than the indicated amounts.
  • The amount is reduced by $3 for each $4 of the surviving spouse's monthly income or the couple's combined income. This applies until the portion of the benefit equivalent to the OAS pension is reduced to zero.
  • For a couple: The pensioner's GIS and the portion of the Allowance equivalent to the GIS are then reduced by $1 for each additional $4 of the couple's combined monthly income.
  • For a surviving spouse: The portion equivalent to the GIS is reduced by $1 for each additional $2 of his or her monthly income.
• Allowance benefits are not taxable. 

In general

• All benefits are paid on a monthly basis. 
• The beneficiary's net income above which you must repay part or all of the Old Age Security pension varies each year to take into account the increase in the cost of living. All the other amounts are revised every three months to take into account the increase in the cost of living. Please note that the increase can be nil. 

You  can find more information on the amounts payable by the Old Age Security pension  on the Government of Canada's website.

The Québec Pension Plan

The amount of your retirement pension is calculated on the basis of the employment earnings on which you have contributed since 1966, the year in which the Québec Pension Plan (QPP) came into effect, or since your 18th birthday.

Each year, your employment earnings are recorded under your name in the Record of Contributors of the QPP, up to the additional maximum pensionable earnings ($73 200 in 2024). The amount of your pension corresponds to 33.33% of the average recorded earnings.

The normal age to receive your retirement pension under the QPP is 65.  If you apply for your pension at that age, you will receive 100% of the expected amounts each month. 

If you are under age 65, your pension will be reduced for each month between the starting date of the pension and your 65th birthday. The adjustment factor will remain 0.5% a month if you are receiving a very small pension and increase to 0.6% if you are receiving the maximum pension.

If you are age 65 or over, your pension will be increased by 0.7% for each month following your 65th birthday, to a maximum of 58.8% at age 72.

1. The amounts apply to persons entitled to the maximum pension.

Details on the retirement pension under the Québec Pension Plan

• To receive your retirement pension, you must apply for it 1 to 3 months prior to the date on which you wish to receive your first payment.
• The pension is taxable.
• The pension is indexed to increases in the cost of living on January 1 of each year. Note that this increase could be nil.
• The pension is paid on a monthly basis.
• If you work and receive a retirement pension at the same time during a given year, your pension for the following year will be increased by 0.5% of the earnings on which you contributed during the year in question. The pension supplement, spread out over 12 months, will be cumulative if you work for several years and will be indexed to the cost of living annually. Therefore, a person who began receiving a retirement pension in January 2023 and continues to work while receiving it will have an increased pension in 2024, based on the income on which he or she contributed during 2023.
• If you are divorced or separated and earnings recorded under your name or your spouse's name in the Record of Contributors of the QPP have been partitioned between you and your former spouse, the calculation of your pension benefit will take the partition into account.
• Certain months in which your earnings were low or nil can be excluded from the calculation of your pension, up to a maximum of 15% of your contributory period. This has the effect of raising your average monthly earnings, thus increasing the amount of your pension. However, the contributory period must be at least 120 months.
  
  Other months can be excluded from the contribution period, such as:
  
  
  • months in which you received, in your own name, family allowances from Québec or the Canada Child Tax Benefit for a child under age 7, or the months in which you were eligible for such allowances without receiving payments
  • months during which you took care of a child requiring exceptional care and received benefits under the Supplement for Handicapped Children Requiring Exceptional Care^{See Note 1} program;
    
  • months for which Retraite Québec paid you a disability pension
  • months for which you were entitled to an income replacement indemnity from the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST).
    

To obtain an estimate of your retirement pension, consult your Statement of Participation under the Québec Pension Plan.

Canada Pension Plan

Although the Canada Pension Plan (CPP) and the QPP are very similar, they are not identical. Regardless of which plan pays your benefits, the amount of the benefits will be determined based on your employment earnings recorded under both plans and the legislative provisions governing the plan that pays your benefits.

You  can find more information on the amounts payable by the Canada Pension Plan  on the Government of Canada's website.

Worth knowing about...

• Your retirement pension under the QPP is not affected by other income you might receive in retirement.
• It is estimated that you will need about 70% of your annual income to maintain your standard of living once you retire. Public plans replace only about 40% of an annual salary of $40,000, so personal savings are necessary. If your annual income is less than $20,000, benefits from public plans should be sufficient.
• Benefits under the OAS program are determined based on your other retirement income (benefits under the QPP or the CPP, benefits from a supplemental pension plan, investment income, income from a registered retirement savings plan (RRSP) or life income fund (LIF), etc.).

• Public Retirement Plans: A Guaranteed Basic Income
• Retirement Plans and Disability
• What Do Retirement Plans Provide When a Contributor Dies?