40 years of Canadian residency for full OAS

formerpatriot · Post by **formerpatriot** » Mon May 30, 2016 6:09 pm

I am not sure if this post is appropriate for this forum.
Please send me to an appropriate forum if necessary.

In order to get full Old Age Security benefit, one must have been a Canadian resident for at least 40 years between the ages of 18 and 65. Between age 18 and age 65 (a span of 47 years), I will have spent 6 years as a graduate student in the USA (on a student visa) followed by 7 years of employment in the USA (with a Green card).

Can my 6 years as a student in the USA (on a student visa) be counted towards the Canadian residency test for OAS? After all, at the time my official permanent mailing address was my parent's address in Canada.

If the answer is "yes", then I will have my 40 years (47 - 7 = 40).
If the answer is "no", then I will have only 34 years (47 - 13 = 34).

Thanks

nelsona · Post by **nelsona** » Mon May 30, 2016 11:00 pm

Couple of points to clarify:

The 40 year criteria is only ONE of the ways you can qualify for full OAS. There are a couple of others, which you can read about here:
http://www.esdc.gc.ca/en/cpp/oas/benefit_amount.page

What year were you born?

Also, the 40 years can be amassed anytime after 18, not simply before age 65.

Since you do have a gap in CPP payments for those years, no doubt service Canada will need you to fill out a residence history. On it you will indicate your residence facts. Generally students abroad are considered Cdn residents, but that would also depend on how you filed your taxes back then.

Don't forget that you are entitled to US Social Security because of working 2 or more years in US.

patti · Post by **patti** » Tue May 31, 2016 5:23 am

[quote="nelsona"]Also, the 40 years can be amassed anytime after 18, not simply before age 65.[/quote]

So if you are only at 38 years when you hit age 65, you can simply wait 2 years and qualify for a full OAS at at 67? That seems like a good strategy instead of collecting partial OAS at age 65.

Waiting extra years could be a particularly smart move for people that have enough income to subject themselves to a partial OAS clawback... make larger RRSP withdrawals (and absorb higher taxable income) in those extra years while waiting to reach full OAS qualification.

nelsona · Post by **nelsona** » Tue May 31, 2016 7:22 am

Well, patti, a 38 year old may have no choice but to wait, since the OAS starting age has or is going up to at least 67.

But, really, the decision to take OAS as early as possible (reduced) or wait (full or even full plus) is a decision to make at the time.

As with all these delay tactics offered by the govt, one has to determine when the break even point is and then decide. Generally it takes until your 80's to recoup any delay.

exPenn · Post by **exPenn** » Tue May 31, 2016 8:44 am

The new Liberal government in Ottawa has cancelled the previous government's increase in the eligibility age for OAS to 67, and has rolled it back to 65.

patti · Post by **patti** » Tue May 31, 2016 8:53 am

I wish I was only 38 years old! Sadly what I meant was that I will only have 38 years of residency by age 65. :)

patti · Post by **patti** » Tue May 31, 2016 9:06 am

Just thought of another potential advantage of deferring.

A) We know that deferring from 65 to 70 increases the OAS payout by 36%.
B) We also know that deferring can increase years of residency to the max 40 years. In my example I would go from 38 to 40 years and increase payout by 5%.

Given A and B, would delaying from 65 to 70 increase payout by 41%? In this case you get 2 types of increase from the delay (36% +5%).

nelsona · Post by **nelsona** » Tue May 31, 2016 9:22 am

so, like I said, are you willing to forego cash in hand for higher payout.

Until the recent change in the penalty/bonus for taking/waiting for CPP, it was a no-brainer to take CPP as early as possible: 60 if you weren't working anymore.

It is not so attractive now to take early (except for the chance to get CPP without having any WEP to worry about until you take SS), but still viable. As you can see in the article I cite below, when you defer, it takes 14 year to catch up (probably a little less with the revert to 65 start).

However, what you are proposing won't work, as spelled out in this article:
http://retirehappy.ca/voluntary-deferral-of-oas/

You can EITHER wait to get your 40 year OR you can get the deferral bonus. You can't get both.