Simplify Your Cross-Border Retirement

Qualifying For U.S. Social Security, Canada CPP and OAS (Totalization Agreement)

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In 1984, the U.S. and Canada finalized an agreement that allows a person to qualify for both U.S. Social Security and Canadian retirement benefits. This made it easier for people who worked in both countries to qualify for retirement benefits when they may not have been able to without the agreement. In the process, they have also thoroughly confused anybody trying to figure out what benefits they actually qualify. This post is meant to break down the U.S. and Canada retirement benefits for people who have worked in both countries.

The social security department actually does a nice job of breaking down the different benefits and eligibility here.

First, a basic rundown of the different retirement accounts in both countries.

U.S. Social Security

This U.S. retirement benefit is based on total wages earned and the number of years worked. The more you earn and work, the higher your benefit. A person can start social security as early as age 62, but your benefit increases each year that you delay taking it until age 70.

U.S. Medicare

Medicare is the U.S. national health insurance for those over age 65. Medicare starts as early as age 65, for those who qualify. In 2022, basic Medicare costs $170.10 per month, although supplemental plans can cost extra.

Canadian Pension Plan (CPP)

The CPP is Canada’s version of U.S. social security. Like social security you can start drawing early, age 60, but receive a higher benefit if you delay. The CPP is also based on earnings and contributions made into the system by employee and employer. The more you earn and longer you work, the higher the benefit. However, the CPP does tend to be lower than social security.

Canadian Old Age Supplement (OAS)

Unlike social security and CPP, the OAS is not based on wages earned, or how much you paid into the system. OAS is available to Canadian citizens that have lived in Canada for a certain amount of time and earn under a certain amount of money.  In 2022, the maximum OAS benefit is $642 and your individual income must be less than $133,141.  To receive the maximum OAS benefit however, you would have had to have lived in Canada for 40 years after the age of 18.  You can start collecting your OAS at age 65, but you can defer up to age 70, and receive a higher payment.

However, there are two big benefits of collecting an OAS benefit here in the U.S.:

  1. There is no claw back if your income is too high, like in Canada
  2. Although you need to have lived in Canada for 20 years to collect OAS outside of Canada, you can use U.S. social security credits to also meet the residency requirement

Below is a chart that shows how to be eligible for the different benefits without relying on totalization agreement. This does not include eligibility based on any spousal or disability benefits, which may be an option in certain cases.

Non-Totalization Agreement Eligibility

As you can see above, a U.S. worker may have worked in the U.S. for 9 years, his job moved to Canada, and receive no social security benefits. However, the agreement in 1984 allows credits earned in Canada to apply to U.S. social security. Below is the eligibility breakdown if you have worked in both the U.S. and Canada.

Totalization Agreement Eligibility

There is a lot to unpack here but the bottom line is this: There is a very good chance that if you worked in both the U.S. and Canada you will have a combination of benefits that consist of social security, CPP, and OAS. However, as I have written here, there is a very good chance that your CPP will actually reduce your social security benefit. If you have worked in the U.S. and Canada, you should be thankful for the Totalization Agreement. That doesn’t mean you have to necessarily understand it.

Need More Help?

RetireMitten Financial LLC specializes in working with families that have lived and worked in the U.S. and Canada. We can help you determine which benefits you qualify and how to best maximize those benefits. Schedule a complimentary meeting at the button below.

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32 comments

  1. Pingback: CPP Spousal and Survivor Benefits in the U.S. -
  2. Pingback: The 5 Biggest Cross-Border Planning Mistakes to Avoid In 2019 -

  3. It’s good to know that you can get a higher benefit for a CPP if you wait to receive it. My mom wants to do research about CPPs and disability tax credits since my dad is no longer able to work and they’re both getting on in years. Thanks for sharing this info so I can discuss details of CPPs with her soon.

    Reply

  4. Informative post. Am I understanding correctly…if a US citizen will have a SS benefit based 100% on US earnings (38 years US work history), as well as a small CPP (from 9 years in Canada), the CPP will be subtracted from the SS benefit?

    Reply

  5. Bryan, thanks for the prompt reply! After posting my question I continued digging around your blog and learned that only “substantial” earning years count. My hubs was a low-paid artist for many years, so out of 38 US working years, apparently he only gets WEP credit for 23, despite having paid FICA taxes for all 38 years. Will the SSA claw back CPP benefits if he claims it immediately? He’ll be 69 this year, so not a lot of time left before SS at 70. This is so frustrating. Some years he just barely missed the income threshold. I feel caught up in legislation that wasn’t intended for us.

    Reply

    1. Hi Renee, Yes, unfortunately it sounds like he will have a WEP reduction in his SS benefits because of his CPP. This reduction will start once he turns on social security (or CPP) whichever is second.

      Thanks,
      Bryan

      Reply

  6. I qualify for USA social security based on 100% US earnings BUT I also qualify for Canadian CPP and OAS 100% Canadian earnings; do I choose one country’s plan and drop the other? second question Canada’s OAS is not on years worked BUT on years living in canada – must be 20 years after age of 18. So do I apply for my OAS pension and if I do does SS deduct from my SS benefit ?

    Reply

    1. Hi Beverly, No, you don’t choose one country’s plan. You will be eligible to recieve benefits from both the U.S. and Canada. Yes, if you have lived in Canada for more than 20 years, you should be eligible to collect OAS. No, OAS does not impcat your U.S. SS benefit.

      Thanks,
      Bryan

      Reply

      1. Hi Bryan,
        I love your website and is very informative. I lived in Canada for 14 years after age 18 and now I live in the United States but I only have 29 credits with Social Security. Do you think will I be eligible for AOS? Thanks and looking forward to hearing from you.

        George.

  8. Hi Bryan,

    Found your website very informative. I was born in Canada and moved to the US before I was 18 years old. My entire working life has been in the US so I am 100% social security. My question is would I be given any credit for OAS benefits for the time I lived in the US or do I need to have at least one year of Canadian residency to get the OAS benefits? The social security and Canadian information is not very clear on this and a bit confusing. Thanks!

    Reply

    1. Hi Stephan, Thanks for the question. Unfortunately, if you didn’t live in Canada after age 18, you won’t qualify for OAS. Social Security helps qualify for OAS, but it doesn’t increase your benefit. If you have 0 years of residency, you won’t qualify for any benefit.

      Thanks, Bryan

      Reply

  9. A nice overview, thanks for the blog! For persons with disabilities, it can get quite nuanced. CPP- drop out periods, years you can drop from the calculation which boost your earnings: up to 1st 7 years of a child’s life if you were the primary caregiver; 16% of lowest earning years; any years for which you were eligible for CPP disability. SSA- if you have a disability or if you are blind (different rules), you can obtain a “period of disability” which freezes your insured status (and you do not require 40 quarters, can be a much lower quarter number), but you must apply within 1 year of disability ending or reaching retirement age. Many Canadians may qualify for this lower number of credits, which means you can qualify as fully insured under SSA rules (AIME calculation), without relying on the treaty and then become eligible for Medicare in the US, which the USA-CAN treaty calculation does not permit.

    Reply

  10. Sorry I dont know why I am confused here, but I am a US born Citizen eligible for Full SS but I worked and lived in Canada for a few months shy of 10 years, working full time making decent money. Would it behoove me to apply for both when I retire in 10 years? I appreciate your help!!!

    Reply

    1. Hi Ted,

      Yes, it almost always makes sense to turn on both social security and CPP if you qualify for both. Depending on how many years you have worked in the U.S., you may have a small WEP reduction, but still you are better off.

      Thanks,
      Bryan

      Reply

  11. Bryan,
    You indicate that the WEP provision becomes effective once CPP is turned on, which is what I had believed. However, SSA has reduced my wife’s SS because she is eligible for a government pension. Could you tell me the policy operations reference specifying that WEP is not applied until CPP is turned on ? Thank you

    Reply

    1. Hi Peter,
      Thanks for the question. I was just referencing when a person qualifies for CPP and social security. If a person qualifies and is collecting another pension that causes the WEP reduction, WEP would start as soon as she starts social security because of the other pension which is causing the WEP reduction.

      Thanks,
      Bryan

      Reply

  12. Hi Peter.
    U.S born but only worked there less than 5 years before moving to Canada as a young man & have worked there and lived over 40 years in Canada.
    Now approaching 65 yrs.old & ready for CPP and OAS.
    Is there any point in claiming any U.S SS or even mentioning it?
    Thanks,
    J.R

    Reply

  13. Hello,
    My name is Jackie and I’m a senior Canadian citizen lady of 75.
    I would like to move back to Florida to be close to my daughter.
    I lived in The USA for 21 years but only have 27 credits so I do not qualify for SS benefits. I do however have a full pension in Quebec, Canada. I would only make $1105.38 US monthly and was told that I could not even get a supplemental income from Florida as one can only make $936.00 a month to qualify. There is no way one can live in Florida on $1105.38.
    Does the totalisation agreement help in such cases?
    I’m confused and saddened !
    I would love to get advice from someone with expertise in this matter,
    Thanking you in advance.
    Sincerely, Jackie Wilson

    Reply

    1. Hi Jackie,

      I’m not sure I totally understand your issue. You may qualify for U.S. social security because of your time in the U.S. and Canada. I would reach out to social security about using your Canada work to qualify. I’m not sure what the supplemental income you are referring to is? GIS in Canada? This typically does not apply in the U.S.

      Thanks,
      Bryan

      Reply

  14. hi, i was born in canada. have worked in the usa to qualify for ss. i currently own land in canada and have been a seasonal resident for all my life. i am 65. would i qualify for oas?
    thank you for your help in this.
    george.

    Reply

  15. Hello. I am a Canadian citizen who worked in the us for a few years and have 15 credits towards Social Security and the rest in Canada. I assume I can use my Canadian work experience to qualify for SS.

    If I made $120000 over those years and that is worth $200000 in today’s money (adjusting for inflation) and I divide by 35 years, it gets me to about $5700 average income. If I apply the 90% on the first $1000ish and 32% on the rest (PIA), I would get about $2400. Is this correct?

    Another question is: Do I get the full $2400 per year, or is it reduced because I only have 15 out of 40 qualifying quarters. Thanks!

    Reply

    1. Hi,

      Yes, you should qualify for SS when you include your Canadian work experience. You need a minimum of 6 credits, so you should be good. I’d say your estimate of $200 per month also sounds right as well. Good luck, as it will take some time to get SS started. It is a long process when you need to get two countries involved. I’d start the application sooner rather than later. I have a client that is in a similar situation and has been waiting for a year with no luck.

      Thanks,
      Bryan

      Reply

  16. Hi Bryan, my wife worked for 10+ years in Canada, then we moved to the US, and she was a stay-at-home mom for several years, and worked about 5 years after the kids had grown. If we decide to apply for Social Security and CPP for her, she will need to have credit for her Canadian work applied in order to be eligible for Social Security.

    What evidence will we need to provide for her Canadian work experience? This was over 30 years ago now, so we don’t have much of a paper trail. Or would we just provide her SIN number, and the Canadian government would look up their records?

    Reply

    1. Hi Jim,

      She will apply for social security but then SS will reach out to Canada to determine her work experience there. As you can imagine, this is a long process. Here is the form she will need to use her Canada work experience: https://www.ssa.gov/forms/ssa-2490-bk.pdf

      However, she may be eligible for a higher spousal benefit under your record. This would be a much easier process and potentially more money for her.

      Thanks,
      Bryan

      Reply

  17. Hi Bryan I started work when in Canada in 1980 worked until 1996 then I transferred to the USA were I worked until this month when my job was eliminated. I am now 64 and thinking of taking my SSI in the USA but is it possible to get any retirement from Canada

    Thanks chris

    Reply

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