For Canadian retirees, Old Age Security (OAS) can be a steady stream of support. But just because the money shows up in your account every month doesn’t mean the Canada Revenue Agency (CRA) isn’t paying attention. With financial pressures rising and more Canadians relying on government benefits, the CRA has sharpened its focus on how OAS income fits into the bigger tax picture. If you’re collecting OAS, here are three new red flags the CRA is watching for, and a smart way to put that money to work without drawing unwanted attention.
Red flags
The first red flag is unreported income. While many retirees believe their OAS and Canada Pension Plan (CPP) are the only numbers that matter, that’s often not the case. More seniors are working part-time or freelancing in retirement. Others might rent out a room in their home or sell crafts online. These side hustles, even small ones, can trigger CRA attention if they aren’t declared. The agency cross-references income slips and financial accounts. If something doesn’t line up, expect a follow-up.
The second red flag is aggressive deductions or credits. Claiming large medical expenses, charitable donations, or home accessibility renovations isn’t an issue if you have the receipts. But if the claims don’t match your income or usual spending patterns, the CRA might take a closer look. This is especially true for seniors making multiple claims in one year or using unfamiliar tax advisors who promise big returns. If it looks too good to be true, it probably is, and the CRA knows it.
The third red flag is crossing the OAS clawback threshold. For 2025, if your net income is more than $90,997, you’ll start repaying part of your OAS. This recovery tax gets deducted monthly once you pass the limit. What’s tricky is that many seniors don’t realize investment gains, pensions, or even Registered Retirement Savings Plan (RRSP) withdrawals could push them over. The CRA calculates this clawback based on your total income, so it’s important to know where you stand before tax season.
Don’t panic!
While that all might sound intimidating, there’s good news, too. If you don’t need every dollar of your OAS for daily expenses, investing some of it can be a smart move. One strong choice for retirees looking for consistent income is Chartwell Retirement Residences (TSX:CSH.UN). Chartwell operates senior living communities across Canada. If there’s one industry built for long-term growth, it’s housing for an aging population.
Chartwell shares are currently trading around $18. The real estate investment trust (REIT) offers a dividend yield near 3.4%, with monthly payouts. That means you’re getting cash flow every month, which pairs nicely with how OAS arrives in your account. It’s a comfortable match for retirees looking to build a steady income stream that doesn’t fluctuate wildly with the market.
Over the past year, Chartwell has generated about $917 million in revenue and maintains a market cap just under $5 billion. The dividend stock also declared a $0.051 monthly distribution for May 2025, in line with previous months. While it’s not the highest-yielding REIT out there, it makes up for it with consistency and a business model tailored to senior needs.
Bottom line
Even small investments can add up. If you put aside $200 of your OAS each month and buy Chartwell shares, you’d start collecting dividends right away. Those dividends can be reinvested to buy more shares or withdrawn to cover lifestyle expenses. Over time, it creates a little income engine powered by real estate and demographic trends. In fact, if you invested your $8,732.04 OAS maximum payment, it could bring in almost $300 in annual income, or $24.65 monthly!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CSH.UN | $17.99 | 485 | $0.61 | $295.85 | Monthly | $8,715.15 |
And because Chartwell pays a stable monthly dividend and doesn’t generate extreme capital gains, it’s less likely to push you over the OAS income threshold. As long as your total income stays below the recovery limit and you declare everything properly, the CRA should have no issue with how you use your pension. All considered, Chartwell offers a way to turn some of your pension into something steady, dependable, and built for the long term.
