You should definitely read this post to get a comprehensive understanding of the Canada Pension Boost: Expected CPP and OAS Pension Increase in August 2024. Full details inside.
Canada Pension Boost
The Canadian government offers several programs to address the primary concerns of retirees: health and pensions. Payments under the Old Age Security (OAS) and Canada Pension Plan (CPP) are adjusted annually to reflect changes in inflation or the cost of living.
Starting in January 2024, there will be a 4.8% increase in pension payments. This annual cost of living adjustment (COLA) applies to all pensions, survivor pensions, and deferred pensions of former and divested members. Statistics Canada reports the Consumer Price Index (CPI) every January, which measures the rise in the cost of living and is used to calculate pensions.
Canada Pension Boost ensures that your pension maintains its value over time and protects it from the effects of inflation. We recommend reading this post for complete details about the upcoming increase in CPP and OAS pension amounts.
Expected CPP and OAS Pension Increase in August 2024
CPP Pension Increase 2024
Several modifications are being made to the CPP pension that will take effect next year, impacting both employed Canadians and pensioners. From 2023 to 2024, CPP benefits increased by 4.4%. This significant rise is due to a notable increase in inflation over the past year, much larger than in previous years.
In 2024, the maximum monthly CPP payout will increase to $1,364.60 from $1,306.57 in 2023, reflecting the 4.4% rise in CPI rates. The average monthly CPP payment in 2024 will be $758.32. Canadians who are still employed will notice the impact of the income cap increase from $66,000 to $68,500.
Additionally, the government is introducing a “second additional CPP contribution,” or CPP2, which is set above the highest pensionable income threshold. For retirees, this benefit will be relatively small.
OAS Pension Increase 2024
The OAS (Old Age Security) benefits have increased by 0.80% for the quarter ending January–August 2024. These payments are adjusted quarterly in January, April, July, and October to account for the cost of living, unlike the CPP (Canada Pension Plan). The current increase for 2024 is based on CPI (Consumer Price Index) data from two consecutive three-month periods.
With this 0.8% CPI increase, the maximum monthly OAS payments for January through August 2024 are now $713.34 for individuals aged 65 to 74 and $784.67 for those aged 75 and above. Since July 2022, there has been an automatic 10% increase in benefits for seniors aged 75 and older.
This adjustment will continue throughout 2024. Currently, seniors aged 65 and older receive a maximum monthly OAS payout of $784.67. This is 9% higher than the amount received by those aged 65 to 74, who receive $713.34.
Conclusion
Older Canadians benefit from financial support through the OAS and CPP pensions, which are crucial components of their retirement income. These pensions ensure fair distribution based on individual financial needs, adjusting for income levels and inflation.
Canada Pension Boost strives to alleviate financial demands on seniors while allowing them to retain their level of living. It’s advisable to start planning for retirement early, as cash retirement savings can only partially bridge the gap between pension income and expenses and are also vulnerable to inflation.
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