GATINEAU, QC, Dec. 30, 2015 /CNW/ – Employment and Social Development Canada today announced the benefit amounts for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2016.
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.
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“I would like to reiterate the government’s commitment to improve the income security of seniors, which includes increasing the Guaranteed Income Supplement for seniors who live alone, indexing Old Age Security and Guaranteed Income Supplement payments to a new senior’s price index, and cancelling the increase in the age of eligibility, from 65 to 67 years, for Old Age Security.”
—The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development
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For up-to-date CPP and OAS benefit amounts, please visit http://www.esdc.gc.ca/en/cpp/oas/payments.page.
The CPP is a stable, well-designed plan that is portable from province to province. According to the 2013 Chief Actuary Report, the CPP is expected to meet its obligations and remain financially sustainable over the long term under the current contribution rate of 9.9 percent.The OAS program is funded through general tax revenues and provides a basic monthly income for Canadian seniors.
The GIS and the Allowances provide additional income to low-income pensioners, their spouses or common-law partners, and eligible survivors. These benefits are income-tested. This means that a person’s entitlement depends on their previous year’s net annual income, or the combined net income with their spouse or common-law partner, excluding the OAS pension.
The OAS program has played a major role in reducing the incidence of low income among seniors. In 2013, the rate of low income among seniors was 3.7 percent. Canada now has one of the lowest rates of low income among seniors in the world.
