Public Pension Plans

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Old Age Security Benefits

Changes to Old Age Security

The Government of Canada, in Budget 2012, announced three changes to ensure that the Old Age Security (OAS) program remains on a sustainable path:

1. Eligibility for the Old Age Security pension and the Guaranteed Income Supplement

The Government of Canada proposes to gradually increase the age of eligibility for the OAS pension and the Guaranteed Income Supplement (GIS) between the years 2023 and 2029, from 65 to 67. People currently receiving OAS benefits will not be affected by the proposed changes.

2. Voluntary deferral of the Old Age Security pension

The Government of Canada also proposes a voluntary deferral of the Old Age Security (OAS) pension that will give people the option to defer take-up of their OAS pension by up to five years past the age of eligibility, and subsequently receive a higher, actuarially adjusted pension.

3. Proactive enrolment for OAS benefits

To improve services for seniors, the Government of Canada proposes to start a proactive enrolment process that will remove the need for many seniors to apply for the OAS pension and the GIS. This means that eligible seniors will no longer need to complete an OAS pension or GIS application. Proactive enrolment will be implemented in a phased-in approach from 2013 to 2016. People who are eligible for proactive enrolment will be notified personally by mail. Service Canada will continue to send applications to those seniors who cannot be proactively enrolled for OAS benefits. Applications are also available on the Service Canada website.

Benefit Payment Rates

Financial planning for retirement usually begins with the concept of preserving Old Age Security. The OAS clawback is effectively a tax on income received over that amount. Therefore taxpayers who want to preserve their OAS benefits look to income splitting, often done by shifting RRSP contributions to a spouse with a significantly lower income or shorter tenure in the labour force (which generally results in lower CPP entitlements).

Old Age Security pension and Guaranteed Income Supplement amounts - October to December 2016
Your situation Maximum monthly payment amount Maximum annual income to receive the OAS pension
Old Age Security (OAS) pension
Regardless of your marital status $578.53 $119,615 (individual income)
Guaranteed Income Supplement (GIS) amounts for individuals receiving a full Old Age Security (OAS) pension
If you are a single, widowed or divorced pensioner $864.09 $17,544 (individual income)
If your spouse/common-law partner receives the full OAS pension $520.17 $23,184 (combined income)
If your spouse/common-law partner does not receive an OAS pension $864.09 $42,048 (combined income)
If your spouse/common-law partner receives the Allowance $520.17 $42,048 (combined income)
Allowance and Allowance for the Survivor amounts - October to December 2016
Your situation Maximum monthly payment amount Maximum annual income to receive the OAS pension
Allowance
If your spouse/common-law partner receives the GIS and the full OAS pension $1,098.70 $32,448 (combined income)
Allowance for the Survivor
If you are a surviving spouse or common-law partner $1,309.67 $23,616 (individual income)

For aggregate Old Age Security program amounts and figures, see the Quarterly report of Canada Pension Plan and Old Age Security monthly amounts and related figures.

Footnote 1 The maximum annual income is the income level at which you cannot receive the Old Age Security (OAS) pension or benefits. See what income and deductions are considered in the maximum annual income allowed to be eligible for the OAS pension (see the related information on the Canada Revenue Agency's Web site) and for the OAS benefits.

Footnote 2 If your individual net income is above $70,954 for 2013, your monthly Old Age Security (OAS) pension payment amount will be reduced, beginning in July 2014, to recover the repayment amount owed. If your income is $114,815 or above, your entire OAS pension will be recovered.

Canada Pension Plan

Canada Pension Plan Payment Rates

CPP benefits will increase by 1.2 percent for those already receiving CPP benefits. For 2016, the maximum CPP retirement benefit for new recipients age 65 will be $1,092.50 per month, an increase of $330 for the year compared to the 2015 maximum CPP retirement benefit.

The new CPP rates will be in effect until December 31, 2016. CPP benefits are revised once a year, in January, based on changes over the 12-month period (November 2014 to October 2015) in the Consumer Price Index (CPI), which is the cost-of-living measure used by Statistics Canada.

OAS benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will increase by 0.1 percent for the first quarter of 2016 (January to March). As of January 1, 2016, the basic OAS pension will increase from $569.95 to $570.52 per month.

OAS benefits are also based on the CPI, but are reviewed quarterly (in January, April, July and October) and revised as required to reflect increases in the cost of living as measured by the CPI. 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.

Maximum Monthly Canada Pension Plan benefit Amounts as of January 1, 2016
Type of Canada Pension Plan benefit Maximum monthly benefit amounts for 2016
Retirement pension (at age 65) $1,092.50
Post-Retirement Benefit (at age 65) $27.31
Disability pension $1,290.81
Survivor's pension (under age 65) $593.62
Survivor's pension (age 65 and over) $655.50
Disabled contributor's child benefits $237.69
Deceased contributor's child benefits $237.69
Death benefit $2,500.00
Combined pensions
Survivor/Retirement (retire at age 65) $1,092.50
Survivor/Disability $1,290.81
Flat rate
Survivor's pension $183.93
Disability pension $471.43