{"id":752099,"date":"2026-06-21T19:03:36","date_gmt":"2026-06-21T19:03:36","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/752099\/"},"modified":"2026-06-21T19:03:36","modified_gmt":"2026-06-21T19:03:36","slug":"complex-oas-residency-rules-key-to-court-decision-leaving-retiree-with-benefit-cut-almost-in-half","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/752099\/","title":{"rendered":"Complex OAS residency rules key to court decision leaving retiree with benefit cut almost in half"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

A recent court case involved a man who had to pay back $20,000 of OAS pension after Service Canada said he qualified only for a partial pension, not the full one it originally granted him.JHVEPhoto\/iStockPhoto \/ Getty Images<\/p>\n

The residency rules for claiming Old Age Security are essential to determining whether someone receives a full or partial OAS pension at retirement, or whether they receive it at all. <\/p>\n

Those rules were central to a Federal Court of Appeal decision, released in January, involving a man who had to pay back $20,000 of OAS pension after Service Canada said he qualified only for a partial benefit, not the full one it originally granted him.<\/p>\n

Establishing OAS eligibility<\/p>\n

Unlike the Canada Pension Plan, which is tied to employment and funded by contributions, the OAS is tied to residency and funded from the federal government\u2019s general revenue. A person must be at least 65 years old to apply to receive the OAS.<\/p>\n

The residency rules to receive the OAS differ depending on whether the person is currently living in Canada:<\/p>\n

A person living in Canada must be a Canadian citizen or legal resident and they must have resided in Canada for at least 10 years since the age of 18 to receive an OAS pension. Someone living outside Canada must have been a Canadian citizen or a legal resident the day before they left Canada and they must have resided in Canada for at least 20 years since the age of 18 to receive OAS.<\/p>\n

Years lived and worked in a country with which Canada has a social security agreement<\/a> may count toward the residency test for eligibility purposes.<\/p>\n

Full or partial OAS <\/p>\n

A person will receive a full OAS pension if they\u2019re eligible and have resided in Canada for at least 40 years after the age of 18.<\/p>\n

If the person is eligible for the OAS but resided in Canada for less than 40 years after turning 18, they will receive a partial pension based on the number of years they resided in Canada divided by 40.<\/p>\n

For example, someone eligible for the OAS who was a resident in Canada for 30 years would receive a 30\/40 partial OAS benefit, or 75 per cent of the full amount.<\/p>\n

Once the government approves a partial OAS benefit, the residency ratio will not increase with additional years of residence in Canada.<\/p>\n

Residency rules tested in court<\/p>\n

The recent Federal Court of Appeal decision, Cardenas vs. Canada (Attorney General), involves a man who appealed a decision by Service Canada to deny him a full OAS pension, retroactively, and required him to repay the excess benefit he had already received. <\/p>\n

The man, who was born in Colombia in 1945 and later became a Canadian citizen, lived in Canada between 1974 and 1996. <\/p>\n

Between 1996 and 2010, he lived abroad while working for Canadian companies, spending a total of two-and-a-half months in Canada during those years. He was again a resident of Canada for less than a year between 2010 and 2011 before retiring to Colombia with his wife in 2012. <\/p>\n

In September, 2012, he applied for an OAS pension. Seven months later, Service Canada granted him a full OAS pension, effective October, 2011.<\/p>\n

In 2017, the man\u2019s spouse applied for an OAS pension. Service Canada approved her for a 21\/40 partial OAS pension. After processing her application, Service Canada decided to review the man\u2019s previous application.<\/p>\n

In May, 2018, Service Canada reduced the man\u2019s OAS pension to a 22\/40 partial pension. It also asked him to repay almost $20,000 of pension overpayment he received between 2011 and 2018. <\/p>\n

The couple asked Service Canada to reconsider its decision, but were unsuccessful. They then appealed to the general division of the social security tribunal but were again denied.<\/p>\n

In 2024, the man appealed<\/a> to the appeals division of the tribunal, arguing that because the couple maintained a home in Canada during the years the man was working for Canadian companies, those years should be counted as years of residency. <\/p>\n

Between 1996 and 2010, they kept belongings in the bedrooms of apartments in Canada owned by a friend and would stay in those rooms when in Canada.<\/p>\n

Under the OAS rules, someone who worked abroad for a Canadian company may count those periods as years of residency if they had a permanent home or \u201cmaintained\u201d a self-contained domestic establishment in Canada and met other conditions.<\/p>\n

However, the tribunal found the man was not a resident of Canada between 1996 and 2010. Although he and his spouse had lived in identifiable residences during their Canadian stays, it could not be said they \u201cmaintained\u201d those properties, primarily because they spent so little time in Canada during that period.<\/p>\n

The couple then took the case to the Federal Court of Appeal, which dismissed the appeal this year, ruling the tribunal\u2019s decision had been reasonable. <\/p>\n

Residency and working abroad<\/p>\n

Paul Thorne, director of advanced planning with Sun Life Financial, says that for many clients, residency is a \u201cnebulous\u201d and frequently misunderstood term.<\/p>\n

\u201cThey equate it with physically being somewhere, but under the OAS rules, the [income] tax rules, all of them, residency is a defined term,\u201d he said. <\/p>\n

Under the OAS regulations, a person is resident in Canada if they make their home and ordinarily live in any part of Canada.<\/p>\n

However, the rules also permit someone to be absent from Canada under certain circumstances, such as to attend school, without it interrupting Canadian residency.<\/p>\n

\u201cIf you are either working or going to be outside of Canada for an extended period of time, you should work with someone like a financial advisor to assess what your residency status is,\u201d Mr. Thorne says.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: A recent court case involved a man who had to pay back $20,000…\n","protected":false},"author":2,"featured_media":411122,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[5267,1397,45,49,48,133,5266,2922,131,132],"class_list":["post-752099","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-advisor-noregwall","tag-appwebview","tag-business","tag-ca","tag-canada","tag-finance","tag-globe-advisor","tag-noastack","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/752099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=752099"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/752099\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/411122"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=752099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=752099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=752099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}