If you’re wondering how much will CPP and OAS increase in 2025, you’re not alone! These two cornerstone retirement benefits from the Canadian government are essential for millions of seniors.
Understanding the expected increases can help you better plan your finances and retirement goals. Let’s break this down in a friendly and approachable way.
Tables of Contents
What Are CPP and OAS?
First, let’s quickly recap what CPP and OAS are and why they matter:
Canada Pension Plan (CPP)
The Canada Pension Plan is a mandatory, earnings-based program for workers in Canada. Employees, employers, and self-employed individuals contribute to CPP during their working years. In return, the government provides monthly benefits upon retirement, starting as early as age 60 (with reductions) or as late as 70 (with increases).
The CPP provides a monthly taxable benefit to retirees who have contributed during their working years. The amount you receive depends on your contributions, the age you start collecting, and your average earnings.
- Maximum monthly CPP in 2024: $1,364.60 (at age 65)
- Adjusted annually: Based on the Consumer Price Index (CPI)
Old Age Security (OAS)
Old Age Security, on the other hand, is a non-contributory program funded by general tax revenue. It’s available to Canadians aged 65 and older who meet residency requirements. Unlike CPP, OAS payments aren’t tied to your employment history.
The OAS program also offers:
- The Guaranteed Income Supplement (GIS) for low-income seniors.
- Additional OAS increases for those aged 75 and older.
The maximum monthly OAS payment in 2024 is $727.67 for ages 65–74, with higher amounts for those 75 and older. Payments are adjusted quarterly based on the Consumer Price Index (CPI).
Why Are CPP and OAS Increasing in 2025?
The answer lies in inflation. Canada’s inflation rate has fluctuated in recent years, impacting the cost of everything from groceries to housing. The government adjusts CPP and OAS annually (or quarterly for OAS) to ensure benefits keep up with inflation. This adjustment protects retirees’ purchasing power. For example:
- CPP adjustments are based on wage growth and contributions.
- OAS adjustments occur quarterly to reflect current economic conditions.
In 2025, inflation remains a central factor influencing these increases, offering retirees financial stability during uncertain times.
Factors That Could Influence 2025 Increases
Several factors could affect the actual CPP and OAS increases:
- Inflation Rate Variability: If inflation is higher or lower than expected, benefit adjustments will follow suit.
- Economic Policies: Government decisions, such as changing indexing formulas, could impact increases.
- Personal Factors: For CPP, your contributions and the age you begin collecting affect your payment amount.
How Much Will CPP and OAS Increase in 2025?
CPP Payment Updates
The 2025 CPP increase is determined by indexing benefits to the Consumer Price Index (CPI). Statistics Canada’s CPI measures changes in the price of a “basket” of goods and services—think food, rent, transportation, and more. Here’s what you can expect:
- Maximum monthly CPP benefit: $1,433.00 (up from $1,364.60 in 2024).
- Annual increase percentage: 2.6%, matching inflation in Canada.
For contributors:
| Contribution Details | 2024 Amount | 2025 Amount |
|---|---|---|
| Maximum Pensionable Earnings | $68,500 | $71,300 |
| Maximum Annual Employee/Employer Contribution | $3,867.50 | $4,034.10 |
| Maximum Annual Self-Employed Contribution | $7,735.00 | $8,068.20 |
The updates ensure that CPP continues to provide adequate support to retirees while reflecting rising wages and costs.
OAS Payment Updates
Old Age Security (OAS) payments are adjusted quarterly to keep up with inflation, ensuring that benefits maintain their purchasing power. These adjustments are based on changes in the Consumer Price Index (CPI) and take effect in January, April, July, and October each year.
For the first quarter of 2025, OAS payments remain unchanged due to stable inflation in the previous period. Here’s the breakdown:
- Ages 65–74: Maximum monthly payment remains at $727.67 (same as 2024).
- Ages 75+: Maximum monthly payment stays at $800.44 (same as 2024).
While there is no increase for now, OAS benefits will be reviewed again in April 2025, and future adjustments will reflect any inflationary changes.
For low-income seniors, the GIS adds supplemental income based on need, making OAS a vital lifeline for many Canadians.
Impact of These Increases on Seniors
More Money in Your Pocket
Even small percentage increases can add up over time. Let’s say you’re 68 years old and receiving both CPP and OAS in 2024:
- CPP: $1,000 per month
- OAS: $700 per month
- Total: $1,700 per month
With a 2.6% increase in CPP payment:
- New CPP: $1,026
- New OAS: $700
- New Total: $1,726 per month
That’s an additional $312 per year!
How to Calculate Your Personal CPP and OAS Increases
For CPP:
- Log in to your My Service Canada Account to see your estimated monthly benefit.
- Multiply your current benefit by the estimated inflation rate (e.g., 2.6%).
Example: $1,000/month × 1.026 = $1,026/month in 2025.
For OAS:
- Check your latest OAS statement or Service Canada account.
- Apply the same inflation estimate (adjusted quarterly).
Example: If you received $600 per month in OAS payments in December 2024, your monthly OAS amount will more likely remain the same for the first quarter of 2025.
CPP and OAS Payment Schedule for 2025
Here is the anticipated payment schedule for CPP and OAS in 2025. Payments are typically made on the third-to-last business day of each month:
| Month | CPP Payment Date | OAS Payment Date |
|---|---|---|
| January 2025 | January 29 | January 29 |
| February 2025 | February 26 | February 26 |
| March 2025 | March 27 | March 27 |
| April 2025 | April 28 | April 28 |
| May 2025 | May 28 | May 28 |
| June 2025 | June 26 | June 26 |
| July 2025 | July 29 | July 29 |
| August 2025 | August 27 | August 27 |
| September 2025 | September 25 | September 25 |
| October 2025 | October 29 | October 29 |
| November 2025 | November 26 | November 26 |
| December 2025 | December 22 | December 22 |
Note: These dates ensure predictability, allowing retirees to manage their monthly budgets effectively
How to Check Your CPP and OAS Payments
Staying informed about your benefits is easy:
- Online: Log in to your My Service Canada Account.
- By Mail: Review benefit statements sent by Service Canada.
- By Phone: Call Service Canada at 1-800-277-9914 for assistance.
These resources help you verify payment amounts, update personal information, or delay benefits.
Additional Tips for Maximizing Retirement Income
While the annual increases are a boon, there are strategies to maximize your retirement income:
1. Delay CPP and OAS
The longer you delay taking CPP (up to age 70) or OAS (up to age 70), the more you’ll receive monthly.
- CPP: Delaying past age 65 increases benefits by 8.4% annually (up to 42% more at age 70).
- OAS: Deferring past 65 adds 0.6% per month, or up to 36% more at age 70.
This strategy works best for those with other income sources or in good health.
2. Combine Benefits with Other Income Sources
CPP and OAS are just part of your retirement income. Supplement them with:
- Registered Retirement Savings Plan (RRSP) withdrawals
- TFSA savings
- Part-time work or other passive income streams like workplace pensions.
For low-income retirees, the GIS provides additional support. Ensure you apply for GIS alongside OAS to maximize household income.
Related content:
3. Watch for Clawbacks
Both CPP and OAS are taxable. High-income seniors may face OAS clawbacks through the Old Age Security Recovery Tax. In 2024, if your net income exceeds $90,997, you’ll gradually lose your OAS benefits due to the OAS pension recovery tax. This clawback continues until your income reaches $148,451. Keep your taxable income under $90,997 in 2025 to avoid losing the benefits.
CPP and OAS in the Context of Rising Costs
With food, housing, and healthcare expenses rising, the increases to CPP and OAS are crucial for retirees. While they may not fully offset inflation for everyone, they provide a stable foundation.
Budgeting Tips
- Track Spending: Use tools like budgeting apps to monitor expenses.
- Cut Costs: Look for senior discounts or government subsidies for housing, transit, or energy bills.
- Plan for Surprises: Set aside a portion of CPP or OAS increases for emergencies.
The Future of CPP and OAS
As Canada’s population ages, the sustainability of CPP and OAS remains a key topic. Enhancements to CPP, such as the introduction of the Year’s Additional Maximum Pensionable Earnings (YAMPE), aim to provide higher benefits while balancing contributions. For OAS, discussions around eligibility age and benefit levels are ongoing, reflecting Canada’s focus on long-term financial planning.
Final Thoughts
So, how much will CPP and OAS increase in 2025? In summary:
- CPP payments: Up 2.4%, with maximum monthly benefits reaching $1,433.00.
- OAS payments: Maximum monthly benefits of $727.67 (65–74) and $800.44 (75+).
For most retirees, this means a modest boost in monthly income—helpful for covering everyday expenses and staying ahead of rising costs.
With predictable payment schedules and inflation-indexed increases, these updates offer financial reassurance to retirees. Use these changes wisely to secure your financial future and enjoy the retirement you deserve.
Have questions about CPP, OAS, or retirement planning? Let’s chat in the comments below!
