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3.3 Million Seniors to Receive $500 OAS Boost in August

Senior couple at the lake having a picnic
Image source: Getty Images

Old Age Security (OAS) beneficiaries will see the highest quarterly adjustment on their retirement income security benefits. On July 7, 2021, Canada’s Minister of Seniors, Deb Schulte formally announced that the federal government would deliver a $500 one-time payment to older seniors in the week of August 16, 2021.

Budget 2021 contains the said OAS pension adjustment. About 3.3 million older seniors, born on or before June 30, 1947, and are OAS eligible in June 2021, can expect the one-time payment this summer. If you’re eligible, you’ll automatically receive the OAS boost next month.

The $500 one-time OAS boost in August 2021 isn’t a tiny amount. You can buy 28 shares of Corby Spirit & Wine (TSX:CSW.A) or 32 shares of Superior Plus (TSX:SPB) with the money. Since the dividend stocks yield an identical 4.68%, the money can produce $23.40 in extra income. If the investment amount is ten times more, the payout is $234.

More adjustments

In addition to the special payment, OAS benefits will increase by 1.3% in July 2021. The previous maximum monthly OAS pension of $618.45 will bump up to $626.49. Thus, it should translate to a $96.48 increase in the coming year. The government will likewise adjust the Guaranteed Income Supplement (GIS) and the Allowances for inflation.

Budget 2021 also includes implementing a 10% permanent increase to the OAS pension of seniors 75 years old and above in July 2022. The additional amount full pensioners will receive over the first year is $766. It’s the first-ever OAS adjustment since 1973, besides those for inflation.

The measures to supports all seniors come alongside the Canada Pension Plan (CPP) enhancements that aim to strengthen the pension plan for future retirees. Stéphane Lauzon, Parliamentary Secretary to the Minister of Seniors, said the payment from Canada’s pension system will only ever increase or stay the same but will never go down.

Resilient business

Corby manufactures, distributes, and imports alcoholic drinks. The $515.41 million company from Toronto will turn one hundred years old in 2027. It made its market debut on the TSX in 1969. The company experienced profitable organic growth through the years because of its diverse brand portfolio.

As of July 20, 2021, the consumer-defensive stock trades at $18.15 per share, a year-to-date gain of 10%. Corby’s business is resilient, given the 2% and 20% growth in Q3 fiscal 2021 (quarter ended March 31, 2021) versus Q3 fiscal 2020.

Superior gains in Q1 2021

Superior Plus is a $2.73 billion energy distribution and specialty chemicals company.  It distributes and markets propane and distillates and related products and services in North America. The company has more than 780,000 customer locations.

Management reported stellar results for Q1 2021 (three months ended March 31, 2021) versus Q1 2020. Superior’s revenue increased by 22.99%, while net earnings from continuing operations soared 6,754.55% to $75.4 million. The dividend stock isn’t as popular as some peers in the utility sector, yet it outperforms the broader market year-to-date (+30.63% versus +14.39%).

Financial support to seniors

The federal government is aware that Canadian seniors face higher costs. It spent $2.5 billion in July 2020 for the one-time top-up of the OAS and GIS. The OAS boost in August 2021 will cost around $1.7 billion.

Retirees will have more money in their pockets, while others can use the cash to buy more dividend stocks to increase investment incomes.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CORBY SPIRIT AND WINE LTD CLASS A. The Motley Fool recommends SUPERIOR PLUS CORP.

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