CPP and Old Age Security rates changing in the new year
By Boundary Sentinel
Employment and Social Development Canada announced Friday the benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2014.
CPP benefits will increase by 0.9 percent for those already receiving CPP benefits. CPP benefits are revised once a year, in January, based on changes over a 12-month period (November 2012 to October 2013) in the Consumer Price Index (CPI), which is the cost-of-living measure used by Statistics Canada.
The maximum CPP retirement benefit for new recipients will increase from $1,012.50 to $1,038.33 per 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, 2014.
OAS benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will increase by 0.1 percent. These payments 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. The maximum basic OAS pension will increase from $550.99 to $551.54 per month.
The GIS and the Allowances provide additional income to low-income pensioners, their spouses or common-law partners, and eligible survivors. Budget 2011 enhanced the GIS by providing a top-up that represents an investment of more than $300 million per year, to improve the financial security and well-being of more than 680,000 seniors across Canada. This represents the largest increase for the lowest-income GIS recipients in a quarter century.
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.
For further information, please consult the Employment and Social Development Canada website at www.hrsdc.gc.ca.
