The Canadian government addresses the two primary concerns of retirees: health and pensions. One of the key ways they do this is through programs like Old Age Security (OAS) and the Canada Pension Plan (CPP), which are adjusted annually to reflect increases in the cost of living and inflation.
In January 2024, pensions will see a 4.8% increase. This adjustment affects all pensioners, including survivor pensions and deferred pensions. The Consumer Price Index (CPI), reported by Statistics Canada every January, measures the cost of living increases and is used to calculate these pensions.
Increase
Pension Boost Canada aims to protect your pension from depreciation, shielding it from inflation’s impact. Let’s cut into the upcoming CPP and OAS pension increases for 2024.
CPP Increase
Several changes are coming to the CPP pension in 2024, affecting both working Canadians and pensioners. From 2023 to 2024, CPP benefits have increased by 4.4%. This significant increase reflects the notable rise in inflation over the past year.
The maximum monthly CPP payout will rise from $1,306.57 in 2023 to $1,364.60 in 2024, thanks to the average 4.4% increase in CPI rates. The average monthly CPP payout in 2024 will be $758.32. Additionally, the income cap will increase from $66,000 to $68,500, impacting working Canadians.
The government is also introducing a “second additional CPP contribution,” or CPP2, set above the highest pensionable income threshold. For retirees, this benefit will be minimal.
OAS Increase
OAS benefits are adjusted quarterly for cost-of-living increases in January, April, July, and October. For January through July 2024, OAS benefits have increased by 0.80%. This increase is calculated using CPI data from two three-month periods.
The maximum monthly OAS payments for January through July 2024 will be $713.34 for those aged 65 to 74 and $784.67 for those 75 and older. Seniors aged 75 and above saw a 10% increase in their benefits starting in July 2022, which will continue until 2024. Currently, seniors over 65 receive a maximum monthly OAS payout of $784.67, 9% more than those aged 65 to 74, who receive $713.34.
Impact
The OAS and CPP pensions provide essential financial support to older Canadians, ensuring a fair distribution based on financial needs and adjusting for inflation. Pension Boost Canada aims to reduce financial pressures on seniors, allowing them to maintain their standard of living.
It’s crucial to start planning for retirement early, as personal savings alone may not bridge the gap between pensions and expenses and are also vulnerable to inflation. Staying informed about these pension adjustments can help in planning a more secure retirement.
In conclusion, the upcoming increases in CPP and OAS pensions reflect the government’s commitment to protecting retirees from inflation and ensuring their financial stability. Knowing these changes and planning accordingly can help retirees make the most of their benefits and maintain their quality of life.
FAQs
When will the pension increase take effect?
In January 2024, pensions will rise by 4.8%.
How much is the maximum CPP payout in 2024?
The maximum CPP payout is $1,364.60 monthly.
What is the OAS increase for seniors 75 and older?
Seniors 75 and older receive $784.67 monthly.
How often are OAS benefits adjusted?
OAS benefits are adjusted quarterly.
What is the income cap increase for CPP in 2024?
The income cap will rise from $66,000 to $68,500.
