Attention Seniors 65+, The federal government of Canada has taken a significant step by confirming new rules in the Canada Pension Plan (CPP) and Old Age Security (OAS) benefits to reshape the retirement landscape for millions of citizens. The amendments in the existing rules are especially for the retirees aged 65 or above. This change is a broader reform for the pension strategy, which aims to make retirement more sustainable, responsive, and equitable for the aging population. But what do these new changes mean to the seniors? Let’s understand these changes.
New CPP and OAS Rules Just Announced
The Senior population in Canada is increasing rapidly. As per the recent reports from the Statistics Department in Canada, by 2030, almost every individual out of four will be 65 years or above. Though the current status of retirement benefits is quite strong by international standards, it faces quite a pressure due to inflation. Looking at the growing concerns, the federal government has pushed the provinces and territories to reform the existing CPP and OAS, which aim to provide financial assistance to retirees.
To protect the pensioners amidst the inflation and increased cost of living, the Canadian government has confirmed a few adjustments in the existing Canada Pension Plan (CPP) and Old Age Security (OAS) for individuals aged 65 and above. These changes include an increase in benefits, contribution level, updated income and qualifying thresholds, to improved deferral options. Here in this article, we will understand what these changes mean, how they matter, and how the elderly will benefit from it.
Here’s an in-depth guide to what these changes mean, why they matter, and how seniors can benefit. This article will give you all the details that every Canadian retiree and soon-to-be retiree needs to know.
CPP & OAS Reform: Overview
| Article On | CPP & OAS Reform Alert: Government Confirms New Rules for All Seniors 65+ |
| Department | Service Canada |
| Country | Canada |
| Program Name | Canada Pension Plan (CPP) and Old Age Security (OAS) |
| Beneficiary | Retirees aged 65 and above |
| Category | Government Aid |
| Official Website | canada.ca |
Key Changes to CPP and OAS: What’s New in 2025?
Before getting into the details, let’s understand the changes in the Canada Pension Plan and Old Age Security in 2025, which are the foundation of retirement income for working Canadians.
- Increased contribution limits
- Automatic adjustments tied to inflation
- New increased payouts
- Higher access to digital retirement tools
- New incentives for delaying retirement age to 65 years.
These factors will determine how much payout you will get or how much tax you owe to the government.
Increase in CPP and OAS Contribution
Contribution to the Canada Pension Plan (CPP) is increasing
The second phase of CPP contribution continues from the beginning of 2025. So, if you are still employed and age 65 or above, you can choose to contribute to CPP, which can probably increase your future pension benefits. Now, let’s understand what the changes are in CPP 2025.
| Category | 2025 | 2024 |
| Highest Pension Earnings | $69,700 | $66,600 |
| Second Phase Contribution Ceiling | $76,200 | $73,200 |
| Rate of Contribution | 5.95+4% | unaffected |
If an individual is earning more than $69,700, both the employee and the employer will make more contributions. By this, you will qualify for increased CPP monthly payments in the future.
Rise in Old Age Security (OAS) with inflation
The benefits of Old Age Security continue to rise automatically, all thanks to the indexing of quarterly inflation. From 2025 onwards, all the retirees will soon see changes in payments in January and July. Let’s go through the projected monthly payments in July 2025:
| Age | Monthly OAS | Projected OAS |
| Between 65 and 74 | $713.34 | $731.50 |
| Above 75 | $784.67 | $804 |
OAS Clawback Threshold Increased
All the pensioners are quite aware of the term “OAS clawback,” also known as OAS recovery tax. It means the benefits are reduced once the income increases to a certain level. In 2025, this threshold had increased to reflect inflation. Let’s see how much it will increase:
- Level at which OAS begins to reduce: $90,997
- OAS is fully clawed back at this point: $148,000+
This means that the elderly individuals with higher income can make more money before their OAS benefits start to reduce. It provides more breathing room in retirement planning.
Delay in CPP and OAS
Now, postponing your pension till 65 can provide you with higher monthly payouts. Let’s understand how:
- For 70 years, the CPP increases by 0.7 per cent monthly (8.4% annually)
- For 70 years, the OAS increases by 0.6 per cent monthly (0.6% annually)
With an increase in inflation and life expectancy ratio, if you delay your benefits, you can get increased lifetime income, especially if you are financially stable and healthy to wait until reaching that age.
Upgradation in Digital Retirement Tools
The federal government is rolling out some enhanced tools in 2025 to facilitate seniors. They can go digitalized to explore their benefits:
- Track the payment history of CPP and OAS
- Calculate their future retirement benefits
- Get a notification if there are changes to the risk in OAS clawbacks
- Can get early exposure to scenarios of delayed retirement
| Official Website | Click Here |
| Homepage | Moyle-Council.org |
Frequently Asked Questions
Can I Opt for CPP Changes at 65?
Yes, you can opt for CPP changes at 65 if you are still employed. You must ensure that you are opting for continuous contribution, else you will be disqualified.
Who Can Get the Increase?
Individuals who are above 65 and are already receiving the CPP and OAS benefits qualify for the increased benefits.
What if I delay my Benefits until 70 years?
If you delay your benefits till 70 years, in CPP, you will get an annual increase of 8.4% and in OAS, you will get an annual increase of 7.2%.
Can I Get an OAS Increase Automatically?
Yes. An individual who is already receiving the OAS can get an automatic increase, which is indexed to quarterly inflation.
