If you live in Canada and are availing pension benefits or you are planning for your retirement, then it is very important for you to know about some major changes happening in April 2025. Special changes have been made in the pension plans provided by the Government of Canada so that senior citizens can get better financial security in these times of inflation.
Under these changes, benefits of both Canada Pension Plan (CPP) and Old Age Security (OAS) have been increased, which will be effective from April 2025. In this article, we will explain in detail what changes have been made in CPP and OAS in 2025, why these changes have been made, and how you can take advantage of these changes.
Canada Pension Increase in April 2025
Older Canadians will continue to receive both OAS and CPP pension benefits in April 2025, but there are some important changes:
- CPP (Canada Pension Plan) payments have been increased by 2.7%.
- OAS (Old Age Security) payments have not changed this quarter, but will be reviewed again in April 2025.
OAS and CPP Payment Information for April 2025
| Benefit | Age Group | Maximum Monthly Amount (2025) | Increase Details |
|---|---|---|---|
| OAS (Old Age Security) | 65 to 74 years | $727.67 | No increase |
| OAS (Old Age Security) | 75 years and older | $800.44 | No increase |
| CPP (Canada Pension Plan) | No limit | $1,433.00 | 2.7% increase |
What is OAS (Old Age Security)?
OAS is a monthly pension paid to seniors in Canada. This pension is independent of their career earnings, meaning the amount is not dependent on your lifetime earnings. OAS is paid to all Canadians who are 65 years of age or older. The plan is fully funded by the government.
The OAS payment for the month of April 2025 will be as follows:
- Seniors aged 65 to 74 will receive a maximum of $727.67 per month.
- Seniors aged 75 and older will receive a maximum of $800.44 per month.
There is no increase in OAS this quarter, but OAS payments are adjusted for inflation every three months. This means that if inflation rises, the OAS amount may also increase.
Factors Affecting OAS Payments
OAS benefits are based on the Consumer Price Index (CPI), which measures inflation. It takes into account expenses such as food, transportation, and housing. When inflation rises, OAS payments also rise. But if inflation remains stable, OAS payments do not change.
How to Maximize OAS Benefits?
- Defer OAS payments: If you delay taking OAS payments, your pension increases by 0.6% each month. If you delay taking OAS benefits until age 70, you will receive 36% more.
- Check out the Guaranteed Income Supplement (GIS): GIS is available for low-income seniors, which provides additional financial support in addition to OAS. If you are a low-income senior, applying for GIS can increase your overall income.
What Changes Have Been Made to the CPP (Canada Pension Plan)?
The CPP is a contribution-based pension plan in Canada that provides retirement, disability, and legacy benefits. CPP benefits depend on your lifetime income and the contributions you make. If you contribute to the CPP while working in Canada, you will receive benefits when you retire.
The 2025 CPP increase is a 2.7% increase that took effect in January. Under this:
- CPP payments have increased by 2.7%.
- The maximum CPP payment has increased to $1,433.00 per month (for those who have made the maximum contribution).
- The average CPP payment for new retirees is $808.14 per month.
Reasons for the CPP Increase
The CPP Enhancement Program was introduced in 2019, and will be implemented until 2025. The plan aims to increase CPP payments by 25% to 33.33%. This will be done by increasing contributions made by employees and employers. This will benefit future retirees, especially those who contribute for a longer period of time.
How to Maximize CPP Benefits?
- Work longer and contribute more: If you work longer and contribute more, your CPP benefits will increase. This will give you a higher pension.
- Defer CPP payments: If you start taking CPP benefits after age 65, your pension increases by 0.7% each month. If you defer it until age 70, your pension could increase by up to 42%.
CPP and OAS Payment Dates in 2025
If you are receiving CPP and OAS, you should keep in mind the following dates when you will receive payments:
| Month | Payment Date |
|---|---|
| January | 29 January 2025 |
| February | 26 February 2025 |
| April | 27 April 2025 |
| April | 28 April 2025 |
| May | 29 May 2025 |
Conclusion
CPP payments will increase by 2.7% in April 2025, while OAS will see no change this quarter. Both plans are adjusted for inflation and cost of living to provide financial security to seniors.
If you are planning for retirement, plan your strategy with these changes in mind and make sure you are maximizing your pension benefits.
Frequently Asked Questions (FAQs)
Q1: Why will OAS payments not increase in April 2025?
A: OAS payments are adjusted for inflation every quarter. Inflation remained stable this quarter, so there was no increase.
Q2: Do all seniors receive OAS?
A: Yes, if you are 65 years of age or older and have lived in Canada for at least 10 years, you are eligible for OAS.
Q3: Can I receive both OAS and CPP at the same time?
A: Yes, you can receive benefits from both plans at the same time. OAS is government-funded, while CPP is based on your contributions.
