CPP and OAS While Living in Portugal: A Guide for Canadians
← Guide to Portugal for Canadians · Part of our 8-step guide to moving to Portugal from Canada
One of the first questions Canadians ask before retiring to Portugal is simple: will my CPP and OAS still be paid? The short answer is yes for CPP, and usually yes for OAS, but the rules, the tax and the paperwork change once you stop being a Canadian resident. This guide explains how CPP and OAS work while living in Portugal, what tax you pay and where, and the steps to take before you move.
Quick Answer
- CPP is paid to you anywhere in the world, including Portugal.
- OAS continues indefinitely if you lived in Canada for at least 20 years after age 18. If not, it usually stops after six months outside Canada.
- GIS and the Allowance stop after six months outside Canada.
- Canada withholds non-resident tax on your pensions, but the Canada–Portugal tax treaty reduces the rate, and Portugal gives a credit for tax already paid.
Canada Pension Plan (CPP) in Portugal
CPP is based on your contributions, not where you live, so it is paid to Canadians living in Portugal for life. You can receive it by cheque or, more conveniently, by international direct deposit into a Portuguese bank account in euros. If you have not opened one yet, see how to open a bank account in Portugal.
Old Age Security (OAS) in Portugal
The 20-year rule
OAS is based on how long you lived in Canada. If you lived in Canada for at least 20 years after turning 18, your OAS keeps being paid no matter how long you live in Portugal. If you lived in Canada for less than 20 years after 18, OAS is normally paid only for the month you leave and the following six months, then stops until you return.
How the Canada–Portugal social security agreement helps
Canada and Portugal have had a social security agreement since 1981. It lets periods of residence or contributions in Portugal count toward meeting the minimum requirements for OAS, and Canadian periods count toward Portuguese pension eligibility. It does not increase the amount of your OAS, but it can help you qualify.
File the OAS Return of World Income every year
Non-residents who receive OAS must file an annual Return of World Income with the Canada Revenue Agency. If you do not, your OAS payments can be stopped. The OAS recovery tax (clawback) still applies based on your worldwide income.
GIS and the Allowance
The Guaranteed Income Supplement, the Allowance and the Allowance for the Survivor are only paid while you live in Canada. They stop after you have been outside Canada for six months, so lower-income retirees should factor this into their budget before moving.
How Your Canadian Pensions Are Taxed in Portugal
Canadian withholding tax
Once you are a non-resident of Canada, CPP, OAS and other pensions are subject to Canadian non-resident withholding tax. The default rate is 25%, but the Canada–Portugal tax treaty generally caps the Canadian tax on periodic pension payments at 15%, and lower in some cases. Some retirees also benefit from a Section 217 election, which can reduce the Canadian tax further when most of their income comes from Canada.
Portuguese income tax
If you become a Portuguese tax resident (generally by spending more than 183 days a year there or keeping a home you intend to live in), Portugal taxes your worldwide income at progressive rates, with a foreign tax credit for the Canadian tax already withheld. Portugal’s old Non-Habitual Resident regime is closed to new applicants, and its replacement, IFICI, does not cover pensions. In practice, most new Canadian retirees pay tax at Portugal’s standard rates.
RRSPs and RRIFs
Lump-sum RRSP withdrawals after you leave Canada are usually withheld at 25%. Regular RRIF payments may qualify for the lower treaty rate. Plan withdrawals with a cross-border advisor before you go, because timing can make a big difference.
Before You Leave Canada: Checklist
- Confirm your years of Canadian residence after 18 to see whether your OAS will continue.
- Ask about the departure tax, which treats many investments as sold on the day you leave.
- Set up international direct deposit for CPP and OAS.
- Tell Service Canada and the CRA your new address and residency status.
- Arrange health coverage, since provincial health plans end once you move away. See our guide to healthcare in Portugal for Canadians.
- Choose your residency visa. Most retirees use the D7 passive income visa, and your pensions count toward its income requirement.
FAQs: CPP and OAS in Portugal
Can I collect CPP if I live in Portugal?
Yes. CPP is paid to you anywhere in the world, including Portugal, and can be deposited directly into a Portuguese bank account.
Will I lose my OAS if I move to Portugal?
Not if you lived in Canada for at least 20 years after age 18. In that case OAS is paid indefinitely abroad. Otherwise it usually stops after six months outside Canada.
Is GIS paid to Canadians living in Portugal?
No. The Guaranteed Income Supplement stops after you have been outside Canada for six months.
Do I pay tax on my CPP and OAS in Portugal?
Usually yes. Canada withholds non-resident tax at a reduced treaty rate, and if you are a Portuguese tax resident, Portugal taxes the pension too but gives a credit for the Canadian tax.
Do my CPP and OAS count toward the D7 visa income requirement?
Yes. Pensions are passive income, so CPP, OAS and private pensions count toward the D7 visa income requirement.
Talk to a Portugal Property Specialist
Every move is different. If you are a Canadian thinking about buying in Portugal, get in touch with Annamarie for a no-pressure conversation, or tell us what you are looking for on our Help Me Find a Property page.
This article is general information, not legal, tax or financial advice. Rules change often, so confirm details for your situation with a qualified professional.
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