Question

Bjorn has lived outside of Canada for six years from age 48 to age 54. Otherwise, he has lived in Canada since age 18. He is applying for Old Age Security Pension (OAS) at age 65. What would be the reduction in his OAS benefit? A. No reduction B. 10% reduction C. 20% reduction D. 30% reduction

Answer 1

Bjorn's OAS benefit would be reduced by 15% due to his 6 years of residency outside of Canada.

Step-by-step explanation:

To calculate the reduction in Bjorn's Old Age Security Pension (OAS) benefit, we need to consider his years of residency outside of Canada. Bjorn has lived outside of Canada for 6 years from age 48 to age 54, which is a total of 6 years. According to the rules set by the Social Security Administration, for each year of residency outside of Canada, there is a reduction of 1/40th or 2.5% in the OAS benefit.

Since Bjorn lived outside of Canada for 6 years, the reduction in his OAS benefit would be 6 x 2.5% = 15%. Therefore, the correct answer would be C. 20% reduction.

Learn more about OAS benefit reduction