Big Changes Coming to CPP & OAS in 2025 – Are You Ready?

On: Tuesday, April 22, 2025 4:57 AM

Big Changes Coming to CPP & OAS in 2025 – Are You Ready?

Friends, if you live in Canada and depend on post-retirement assistance through CPP (Canada Pension Plan) or OAS (Old Age Security), then this news is very important for you. From April 2025, some important changes are going to happen in CPP and OAS, which can affect your monthly income.

Today we will tell you what these two schemes are, what changes are coming in them, who will get the benefit, and how you can ensure that you are getting the right amount at the right time.

First of all, know what are CPP and OAS?

Canada Pension Plan (CPP)

CPP is a kind of government pension scheme in which people working in Canada deposit a part of their salary. This deposited amount is later received as pension every month after retirement. The special thing about CPP is that the more your earnings and contributions, the more pension you will get.

Old Age Security (OAS)

OAS is given to those who have spent at least 10 years in Canada after the age of 18. It does not depend on your earnings. That is, even if you have never worked, but you are a citizen and fulfill the rules, you can still get this pension.

What is going to change in April 2025?

Now let’s talk about the important changes that will come into effect from April 2025:

Payment date:

The next payment date for both CPP and OAS has been fixed as 26 April 2025. If you are already receiving payment, then on this day your money will come directly to your bank account.

Increase in payment:

The government has announced an increase in the amount of both CPP and OAS schemes. This increase is decided on the basis of inflation every year. Usually this increase is between 1% to 3%, so that the elderly can get some relief from the effects of inflation.

Changes in OAS rules:

If you are going to be 65 years old in 2025 and want to apply for OAS, then now you may have to follow some additional documents or new guidelines. The government may bring some new conditions to ensure that only eligible people take benefits.

How do CPP and OAS payments work?

Let’s now take a look at how these two schemes work:

How does CPP work?

Suppose you worked in Canada for 30 years and every month your salary was deducted for CPP. Your employer also contributed the same amount. After retirement, the government sends you a fixed amount every month according to your contribution.

If you start taking CPP at age 60, you’ll get less money because you started early. But if you wait until age 70, your monthly amount increases.

How does OAS work?

The beauty of OAS is that it’s not based on your job or earnings. If you’ve spent 40 years in Canada after age 18, you’ll get the full OAS benefit. If you’ve spent less time, payments may be proportionately less.

How do I check if I’m eligible?

How do I check eligibility for CPP?

Create or log in to my Service Canada account
You can see how many years and how much you’ve contributed.
Use the CPP calculator
This will help you estimate how much pension you’ll get each month after retirement.

How do I check eligibility for OAS?

Confirm length of residence
If you have spent at least 10 years in Canada after age 18, you are eligible.
Apply for OAS
You can apply 6 months before you turn 65. The application can be made online or at your nearest Service Canada office.
Find out the payment amount
The amount of OAS depends on the number of years you have lived in Canada.

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Other things you should know

Can I receive CPP and OAS while working?

Yes, you can receive CPP and OAS while working. But if your income is high, OAS may be subject to a tax or clawback (recovery tax).

What is OAS clawback?

If your annual income is more than $79,845 (2025 projected figures), the government may take back some of your OAS. This is called the OAS clawback or recovery tax.

Is CPP and OAS taxable?

Yes, the money received from both these schemes is taxable. That means you have to include it in your annual income and pay tax on it.

Understand with an example:

Example 1:

Rakesh ji is 65 years old and has worked in Canada for 35 years. He has contributed every month to CPP. Now he is getting $1,200 CPP and $600 OAS every month.

Example 2:

Sunita ji is 65 years old but she has never worked. She has spent 40 years in Canada, so she is getting full OAS (about $700/month) but not CPP.

Frequently Asked Questions (FAQs)

1. When do you get CPP and OAS?

Every month, it is deposited directly in the bank on a fixed date. For February 2025, this date is 26 February.

2. When can I start CPP?

You can start CPP at age 60, but you’ll get less money. The amount is higher if you start at age 65 or 70.

3. What if I move out of Canada?

If you’ve lived in Canada for the qualifying period, you can still receive OAS, but there are some conditions.

4. Are CPP and OAS taxable?

Yes, both are taxable. The tax rate is based on your total income. Depends.

Conclusion:

The CPP and OAS are a great support for Canadian seniors. The changes coming in February 2025 will benefit many people, especially those looking for a steady income after retirement.

If you or someone in your household is receiving the CPP or OAS, it’s time to double-check your documentation and eligibility. Also, make sure you applied on time and are receiving money in your account on the right date.

For any information, you can visit the Service Canada website or contact your nearest centre.

If you found this information useful, share it with others so that more people can benefit from it.