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Canada Pension Plan (CPP) benefits will increase by 1.8% in 2015, Employment and Social Development Canada announced Monday.
For 2015, the maximum CPP retirement benefit for new recipients age 65 will be $1,065 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, 2015.
CPP benefits are revised once a year, in January, based on changes over the 12-month period (November 2013 to October 2014) in the consumer price index (CPI), which is the cost-of-living measure used by Statistics Canada.
Old age security (OAS) benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will remain the same for the first quarter of 2015 (January to March). As of Jan. 1, 2015, the basic OAS pension will stay at $563.74 per month. OAS benefits increased by 0.9% in the previous quarter.
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.
For those with direct deposit, the CPP and OAS payment dates for 2015 are Jan. 28, Feb. 25, March 27, April 28, May 27, June 26, July 29, Aug. 27, Sept. 28, Oct. 28, Nov. 26 and Dec. 22. Those without direct deposit will usually receive their payment within the last three business days of each month.
The OAS is funded through general tax revenues and provides a basic monthly income for Canadian seniors. In 2013/14, approximately $41.8 billion in OAS benefits were provided to 5.4 million individuals.
Agencies/Canadajournal
How do they plan on funding this 1.8% increase?
Off the back of the young already stretched workers that haven’t seen a decent economy yet in their lifetime and sky high home prices (home prices that upon sale further subsidize the luxurious retirement of existing home owners – eg. the retired or retiring, ie. the baby boomer generation), record debt and no good jobs (part-time since Chinese are imported to take all the good ones)
The tax contribution formula that prevailed in the early years of the program was not sufficient to pay for all of the enhancements added in later years. In every social program, there are winners and losers.