Dates when payments will arrive
If you are a new pensioner or have already been receiving a government pension, this is the time of year you may wish to become familiar with both the payment amounts and dates you might expect to receive them.
In 2017, recipients of the Quebec Pension Plan (retirement, disability, orphan’s, surviving spouse’s pensions) who have signed up for direct deposits can expect to receive their payments on the last working day of each month: Jan. 31, Feb. 28, March 31, April 28, May 31, June 29, July 31, Aug. 31, Sept. 29, Oct. 31, Nov. 30 and Dec. 28.
The maximum monthly amounts for those applying for the Quebec retirement pensions beginning in 2017 will be $1,114.17 for those 65 years of age, $713.07 for those 60 years of age (64% of the maximum QPP pension at age 65) or $1,582.12 for those 70 years of age (142% of the maximum QPP pension at age 65). Please note that those who began receiving QPP prior to 2017 may not be entitled to the maximum 2017 amounts because of how QPP is indexed. Also, not everyone is entitled to the maximum QPP benefit. The QPP has an online calculator for those who wish to estimate what their maximum QPP benefits might be if they were to apply now.
The maximum monthly surviving spouse’s pension for those between ages 45 and 64 will be $895.81. For those 65 or over, it is up to $668.50 per month. If you are already receiving a retirement pension, you will be paid a combined pension subject to a maximum amount that may not be equal to the sum of both the survivor’s pension and the retirement pension. QPP benefits are taxable. Quebec residents who would like more information about these benefits can call the Régie des rentes du Québec at 1-800-463-5185 or can apply for the benefits online.
For those who receive pension benefits under the federal Old Age Security (OAS) program, those payments can be automatically deposited into bank accounts typically on the third to last business/banking day of the month. In 2017, these dates will be Jan. 27, Feb. 24, March 29, April 26, May 29, June 28, July 27, Aug. 29, Sept. 27, Oct. 27, Nov. 28 and Dec. 20.
The OAS pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or older who meet certain legal status and residence requirements. Individuals are allowed to postpone receiving their OAS payments for up to five years. Those who take their OAS later will receive a higher OAS payment.
To qualify for an Old Age Security (OAS) pension, in addition to being 65 or older, they must be a Canadian citizen or legal resident of Canada on the day preceding the application’s approval or, if no longer living in Canada, must have been a Canadian or legal resident of Canada on the day preceding the day he or she stopped living in Canada. Furthermore, if they are a resident of Canada at the time of application, they must have lived in Canada for at least 10 years after turning age 18. For OAS applicants living outside Canada, they must have lived in Canada for at least 20 years after turning age 18. If one is not covered by either of these two scenarios they may still qualify for some type of pension. For more information on OAS you can call Service Canada at 1-800-277-9914 or consult the Service Canada website.
The maximum OAS monthly benefit payment for the first quarter of 2017 will be $578.53. OAS pension payment rates are reviewed and adjusted, if necessary, in January, April, July and October to reflect any increases in the cost of living as reflected by the Consumer Price Index.
Pensioners with individual net income that exceeds $74,788 in 2017 may have to repay part or the entire maximum OAS pension amount when they file their 2017 tax return. If the pensioner’s income exceeds $121,071 in 2017, they will have to repay all OAS benefits received in 2017. In the following tax year, the OAS payments will be reduced by the same amount as the OAS claw back from the previous year. OAS benefits are also taxable. John Archer is an Associate Portfolio Manager and Wealth Advisor with RBC Dominion Securities in Montreal. He can be contacted via email at John.archer@rbc.com or by phone at 514-878-5040. For information regarding your own government pension please contact the relevant pension office as indicated above.