CPP and OAS Getting a Raise This June: Big news is coming for Canadian seniors this June! The Canada Revenue Agency (CRA) just confirmed that both the Canada Pension Plan (CPP) and Old Age Security (OAS) are getting a bump in payments. These changes are set to kick in June 2025 and are designed to help retirees keep up with rising living costs. Let’s break it down in a way that’s easy to understand—whether you’re just planning for retirement or advising clients as a financial expert.
CPP and OAS Getting a Raise This June
The CPP and OAS increases in June 2025 show Canada’s commitment to helping seniors keep up with inflation. Whether you’re just stepping into retirement or planning ahead, understanding these changes can help you make the most of your benefits.
| Benefit | Current Monthly Amount (April–June 2025) | Upcoming Increase | Effective Date |
|---|---|---|---|
| CPP Maximum Payment | $1,433.00 | 2.6% increase | January 2025 |
| OAS (Ages 65–74) | $727.67 | 1.0% increase | July 2025 |
| OAS (Ages 75+) | $800.44 | 1.0% increase | July 2025 |
| Next Payment Date | – | – | June 26, 2025 |
Understanding the Canada Pension Plan (CPP)
The Canada Pension Plan is a key part of retirement planning. It’s a contributory, earnings-based program designed to provide retirement, disability, and survivor benefits.
Key Details:
- Contribution Rates: Workers contribute 5.95% of pensionable earnings up to $71,300, and employers match that. Self-employed folks cover both portions, totaling 11.9%.
- Maximum Monthly Payment: For 2025, retirees at 65 could get up to $1,433.
- Average Payment: New retirees in 2025 can expect about $808.14 a month.
- CPP Enhancement: Since 2019, enhancements have been increasing benefits, raising the replacement rate from 25% to 33.33% of earnings and covering a higher earnings level by 2025.
Understanding Old Age Security (OAS)
The OAS provides a monthly payment to seniors who meet residency and legal requirements.
Key Details:
- Current Payment: $727.67 for ages 65–74; $800.44 for 75 and over.
- Upcoming Increase: Payments go up by 1.0% in July 2025, reflecting Consumer Price Index (CPI) changes.
- Eligibility: To get full OAS, you need at least 40 years of Canadian residency after age 18. Partial pensions are available with at least 10 years of residency.
CPP and OAS Getting a Raise This June for Maximum Benefits
Here’s where it gets interesting. Many seniors combine CPP, OAS, and the Guaranteed Income Supplement (GIS) to maximize retirement income.
- GIS Amounts: Up to $1,086.88 for singles, and $654.23 each for couples (April–June 2025).
- Eligibility: GIS is for low-income OAS recipients. The amount depends on marital status and income.
How These Increases Impact You
Imagine Joe, a 67-year-old retiree living in Ontario. He’s getting CPP at $1,200 a month and OAS at $727.67. With the new adjustments, his OAS will rise by 1%, adding about $7.30 a month, while his CPP might increase by roughly $31 depending on his contribution history. That’s nearly $40 extra per month—enough for a couple of dinners or to help cover utility bills.
Practical Tips to Maximize Benefits
Here are some pro tips, whether you’re a senior or an advisor:
- Apply Early: Apply for CPP and OAS a few months before you turn 65 to avoid delays.
- Consider Deferring OAS: Delaying OAS by a year boosts payments by 7.2%. Delaying until 70 means a 36% increase!
- Track Income: For GIS, keeping your taxable income low helps maximize benefits. Consider tax-free income sources like a Tax-Free Savings Account (TFSA).
- Consult a Pro: Financial advisors can help tailor a plan to combine CPP, OAS, GIS, and private savings for maximum retirement income.
Action Steps for Seniors and Advisors
- Check Eligibility: Visit the CRA’s eligibility page and make sure you qualify.
- Set Up Direct Deposit: Avoid delays by signing up through your My Service Canada Account.
- Plan Your Taxes: Remember, CPP and OAS are taxable. Consider strategies like splitting income with your spouse or using deductions.
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Frequently Asked Questions (FAQs)
Q1: How do I apply for CPP and OAS?
A: Apply online through My Service Canada Account or by mail.
Q2: Can I receive both CPP and OAS?
A: Yes, you can collect both as long as you meet the eligibility for each.
Q3: What if I delay OAS?
A: You’ll get an increase of 0.6% per month delayed, up to 36% at age 70.
Q4: Are CPP and OAS payments taxed?
A: Yes, both are taxable and must be reported.
Q5: How often are OAS payments adjusted?
A: Every quarter—January, April, July, and October—based on CPI changes.
