The government of Canada has established several plans to help people when they retire. These plans focus on two things: health and money for retirement. The money you get from Old Age Security (OAS) and Canada Pension Plan (CPP) is adjusted every year to keep up with the cost of living.
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Canada Pension Increases July-August 2024
From January 2024, the money you get from your pension will increase by 4.8%. This applies to all people getting a pension, those getting a survivor’s pension, and those who used to be members but have now left. The increase is calculated based on the Consumer Price Index (CPI), which measures how much the cost of living has gone up. Statistics Canada reports this every January.
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Pension Boost Canada
Pension Boost Canada is a program that ensures that the value of your pension doesn’t go down over time. It protects your pension from the effects of rising prices. If you want to know more about the increase in CPP and OAS pension amounts, keep reading this post.
Expected Increase in CPP and OAS Pension in July 2024
Increase in CPP Pension in 2024
There will be many changes to the CPP pension next year. These changes will affect both working people and pensioners. Between 2023 and 2024, the benefits from the CPP increased by 4.4%. This is much bigger than the increases we’ve seen in the past because prices have gone up a lot in the last 12 months.
In 2024, the most money you can get from CPP monthly will be $1,364.60. This is up from $1,306.57 in 2023 because the CPI rates have increased by an average of 4.4%. The average amount of money people will get from CPP each month in 2024 will be $758.32. People who are still working will see the effects of the income cap going up from $66,000 to $68,500.
The government is also starting a new thing called a “second additional CPP contribution,” or CPP2. This is for people who earn more than the highest income that can be used to calculate the pension. The benefit for people who are getting a pension would be quite small.
Increase in OAS Pension in 2024
OAS payments increased by 0.80% in the three months ending July 2024. Unlike CPP, OAS payments are changed four times yearly (in January, April, July, and October) to reflect the cost of living. The rise in OAS for 2024 is estimated using CPI data from two three-month periods each.
A 0.8% increase in the CPI means that the most money you can get from OAS each month from January to July 2024 will be $713.34 (for people aged 65 to 74) and $784.67 (for people aged 75 and above). The benefits automatically increased by 10% for people aged 75 or older from July 2022.
This increase will continue until 2024. People over 65 currently receive a maximum of $784.67 each month from OAS, which is 9% less than the amount received by those aged between 65 and 74, who receive $713.34.
Final Thoughts
The OAS and CPP pensions help older people in Canada financially. They are a big part of the money people have when they retire. They ensure the money is distributed fairly based on how much people need and are designed to adjust for rising prices.
Pension Boost Canada is there to reduce the financial pressure on older people and let them continue to live their normal life. It’s usually a good idea to start planning before you retire because the money you save for retirement can only partly cover the gap between your pension and your costs. It can also be affected by rising prices.
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Abhilash, an exam specialist with a passion for education, writes comprehensive articles on exam results and admit cards. His expertise ensures students receive reliable information and useful tips to excel in their exams.