Retirees' OAS abroad spikes 9.7% post-pandemic, reshaping retirement abroad trends
The pattern of Canadian retirees receiving Old Age Security (OAS) payments while living abroad has undergone notable changes amid and following the COVID-19 pandemic.
These changes offer insights into evolving retirement preferences and the impact of global disruptions on such decisions.
Before the pandemic, there was a steady increase in the total dollar value of OAS payments to Canadians residing overseas. However, this trend briefly reversed during the pandemic, largely due to severe global travel restrictions.
Despite this, the number of pensioners receiving OAS abroad initially dropped and then surged, with total payments rising to $621m in 2022, marking a significant 9.7 percent increase from a slight retraction in 2021.
This fluctuation is tied to broader trends, including demographic shifts and the global health crisis's impact on retirement planning. Laura Tamblyn Watts, the president and CEO of CanAge, emphasized the pandemic's influence, stating, “the pandemic had a profound impact on how Canadian seniors have been thinking about their retirement.”
This reflection is crucial, considering the ongoing adjustments in the post-pandemic era, including how seniors perceive retirement life outside Canada.
Despite the observed year-to-year changes, the proportion of seniors living abroad and receiving OAS has remained relatively stable over the past decade, fluctuating between 2.2 and 2.7 percent.
This stability is noteworthy, especially when considering that only about 1.3 percent of overall OAS expenditures are directed abroad. However, the total amount of these payments experienced a 50 percent growth from $414m in 2012 to $621m in 2022.
The aftermath of the pandemic has led to a “pandemic correction” and a re-evaluation among seniors about retirement locations, with an increased interest in living abroad.
The spike in OAS payments abroad post-pandemic not only corrects the temporary dip but also signifies a broader realization among Canadian seniors about the potential benefits and affordability of retiring outside Canada.
This shift in perspective is partly due to concerns about the quality of long-term care in Canada, highlighted by the tragic impact of COVID-19 on such facilities. Over 80 percent of Canada's initial COVID-19 fatalities occurred in long-term care and retirement homes, prompting a critical assessment of aging in Canada.
Eligibility for a full or partial OAS pension is determined by the number of years a Canadian has lived in Canada after turning 18, with specific provisions for those living abroad. Seniors can qualify for OAS outside Canada if they have accumulated at least 20 years of residency post-age 18.
Moreover, Canada's international agreements facilitate the receipt of OAS and retirement benefits for Canadians in various countries, underlining the global nature of retirement planning today.
