Seniors are being auto-enrolled for OAS even after asking to defer

Service Canada is enrolling some seniors for Old Age Security automatically at the age of 65 even though they requested a deferral, creating headaches for those who still earn income and want to maximize the pension’s benefits.

Several financial advisors say Service Canada is taking up to a year or more to process their clients’ deferral requests.

These clients are spending time calling Service Canada agents to get their auto-enrolment reversed and asking for guidance on what to do with the payments they receive in the meantime.

“If you have clients who plan to defer their OAS, prepare them for the fact it won’t be easy and doesn’t appear to be guaranteed to work,” says Adam Chapman, a certified financial planner at YES Money in London, Ont.

As recently as September, Mr. Chapman says one of his clients was auto-enrolled in OAS after having called Service Canada to defer.

Liana Brault, a spokesperson forEmployment and Social Development Canada (ESDC), which oversees Service Canada, said in a response sent by e-mail to questions from The Globe that it processes most deferral requests before auto-enrolled clients begin to receive OAS benefits.

Ms. Brault said Service Canada “makes every effort to process client requests for the deferral of OAS benefits within the standard time frame,” which is 120 days.

However, “processing times may vary depending on workload volumes and the complexity of individual cases,” she added.

The OAS pension, which is separate from the Canada Pension Plan, provides Canadians with a monthly benefit starting at the age of 65. When seniors’ income exceeds a certain threshold for the year, their OAS is clawed back.

In 2013, the OAS rules were changed to allow deferrals. For every month someone defers after turning 65, they receive 0.6 per cent more in OAS benefits. After turning 70 years of age, there’s no benefit to deferring.

Service Canada also began auto-enrolling Canadians for OAS in 2013, sending out a notification letter the month after someone turns 64. If the person doesn’t want their OAS to start at 65, they must contact Service Canada. (If someone doesn’t receive an automatic enrolment letter, they need to contact Service Canada to start OAS.)

Advisors say many clients who are still working at 65 and earning an income above the clawback threshold choose to defer.

Cameron Graham, certified financial planner with Sterling Mutuals Inc. in Sarnia, Ont., says one of his clients who’s still working submitted his deferral request letter to a Service Canada location in August, 2025, four months before turning 65.

However, Service Canada didn’t process the request until this past August and the client received OAS payments until then.

The client now wants to start his OAS pension in January, 2027. However, the client is unable to apply through Service Canada’s online platform until the agency processes his repayment, Mr. Graham says.

“Our workaround, after chatting with a Service Canada employee, was to paper-file the OAS application, which could also take six months to process,” he says. “[We have] very little hope for him to receive his first payment in January.”

Mr. Chapman says two of his clients, a couple, called Service Canada together to defer their OAS.

However, the woman’s deferral request was processed and the man’s wasn’t. The man didn’t find out he’d been auto-enrolled until the couple came home from an extended trip to find several OAS cheques addressed to him in their mailbox.

Mr. Chapman says Service Canada told his client he can’t reverse his auto-enrolment because it doesn’t have a record of his deferral request. Also, OAS rules allow someone to cancel their enrolment and repay what they’ve received for up to six months after they started receiving payments, but his client missed that deadline.

Some clients are able to reverse OAS payments if they’re caught in time, Mr. Chapman says.

“But with [Service Canada’s] processing delays, it seems to open up a window for people like my clients who got caught not realizing these cheques were even showing up.”

Marc Sabourin,portfolio manager with Trans Canada Wealth Management at Harbourfront Wealth Management Inc. in Winnipeg, said in an e-mail to The Globe that one of his clients informed Service Canada two months before turning 65 in July, 2025, that he wanted to defer OAS payments, but was auto-enrolled anyway.

Every month since, the client has contacted Service Canada to have the auto-enrolment reversed. Service Canada hadn’t yet resolved the issue as of September, when Mr. Sabourin last met with the client.

ESDC spokesperson Samuelle Carbonneau said in a statement sent by e-mail that Service Canada is focused on ensuring seniors receive their benefits.

“Urgent and dire needs cases are prioritized and are typically processed within two to three business days,” she said.

Since OAS auto-enrolment was introduced, more than 2.1-million Canadians received their payments without having to apply.

If Service Canada receives a deferral request within six months after someone begins receiving OAS benefits, “the deferral will be honoured, subject to the repayment of any OAS benefits already paid,” Ms. Brault said.

A request received after that “will most likely not be granted” unless, for example, Service Canada caused the delays; then the client would not be penalized.

Clients who received OAS payments but want to defer should set aside the funds received until their deferral request has been accepted, she said, at which point they can repay the funds.