CPP and OAS pensions will rise in 2024. CPP goes up by 4.4%. OAS will increase by 0.8%. This article breaks down what’s new. Learn about the higher payments. See how these boosts help with rising costs. Find out the exact amounts and what it means for you
Annual Pension Adjustments
Every year, the Canadian government adjusts CPP and OAS benefits to account for inflation. In 2024, the Canada Pension Plan (CPP) will increase by 4.4% starting in January, while the Old Age Security (OAS) benefits will rise by 0.8% for the first half of the year.
CPP Payment Increase for 2024
- Maximum Monthly CPP Payment: The maximum monthly CPP payout will increase from $1,306.57 in 2023 to $1,364.60 in 2024.
- Average Monthly CPP Payment: The average monthly CPP payment for new beneficiaries will be $816.52.
- Income Cap Increase: The income cap for CPP contributions will rise from $66,000 to $68,500, and a new secondary contribution cap will be introduced at $73,200.
| CPP Payment Type | 2023 Amount | 2024 Amount |
|---|---|---|
| Maximum Monthly CPP Payment | $1,306.57 | $1,364.60 |
| Average Monthly CPP Payment | $758.32 | $816.52 |
OAS Payment Increase for 2024
OAS benefits will see an increase of 0.8% for the period of January to July 2024.
- Seniors Aged 65-74: $727.67, up from $713.34 in 2023.
- Seniors Aged 75 and Over: $800.44, up from $784.67 in 2023.
| OAS Payment Type | 2023 Amount | 2024 Amount |
|---|---|---|
| Seniors Aged 65-74 | $713.34 | $727.67 |
| Seniors Aged 75 and Over | $784.67 | $800.44 |
Importance of the Increases
These pension increases are essential to ensure that seniors’ benefits keep up with rising living costs. The adjustments help protect retirees’ purchasing power and reduce the financial burden caused by inflation
Key Points to Note:
- CPP and OAS contributions: The contribution rate for employees and employers is 5.95% up to the income cap of $68,500, with a secondary contribution rate of 4% for earnings between $68,500 and $73,200.
- Inflation Adjustment Mechanism: Both CPP and OAS are adjusted based on the Consumer Price Index (CPI) to ensure they keep pace with inflation. This helps protect the real value of seniors’ pensions.
Conclusion
The 2024 pension increases will help seniors. More CPP and OAS payments mean less worry. It’s a way to keep up with inflation. But it might not cover all rising costs. Other income sources are still needed. Planning ahead is key. It keeps finances steady. The government wants to make sure seniors don’t fall behind as prices rise.