Canada’s pensioners are getting a modest raise. Employment and Social Development Canada announced the benefit amounts for the Canada Pension Plan and Old Age Security effective Jan. 1. CPP benefits will increase by 1.8 per cent for those already receiving Canada Pension.
For 2015, the maximum CPP retirement benefit for new recipients age 65 will be $1,065 a month. This increase is calculated on the average yearly maximum pensionable earnings for the last five years. The new CPP rates will be in effect until Dec. 31.
Canada Pension benefits are revised once a year, in January, based on the consumer price index changes over 12 months, in this case from November 2013 to October 2014, said a news release from the federal government. The index is the cost-of-living measure used by Statistics Canada.
Old Age Security benefits, which consist of the basic OAS pension, the guaranteed income supplement and the allowances, will remain the same for the first quarter of 2015. As of Jan. 1, 2015, the basic OAS benefit will stay at $563.74 per month.
OAS benefits are also based on the consumer price index but are reviewed in January, April, July and October and revised as required to reflect increases in the cost of living. Although OAS and CPP benefits are not indexed at the same time, they are both adjusted with the cost of living over a given year, the news release said.
Old Age Security is funded through general tax revenues and provides a basic monthly income for Canadian seniors. In 2013-14, about $41.8 billion in benefits were provided to 5.4 million individuals.
The CPP, or the Quebec Pension Plan in Quebec, is funded through contributions by Canadian workers, their employers and the self-employed and through investment earnings on the plan’s funds. In addition to retirement benefits, the plan provides disability, death, survivor and children’s benefits.
