I'll provide the first part of the answer, and maybe Mr. McCombs will answer the second part.
The first thing is there are two components of universality for the OAS: OAS and GIS.
GIS is not available to everybody. This is income tested, so it's targeted to low-income seniors. On that aspect there is already a very clear selection criteria.
For the OAS, some criteria are also established: age, legal status, residence in Canada, and so on. In that specific case, the person would remain eligible, but the payment would be suspended while the person was incarcerated and then would be reinstated. In other words, when the person is released, the person will not have to reapply; the payments that were suspended will be restarted.
I will leave Mr. McCombs to comment on the constitutionality.