|By PR Newswire||
|December 20, 2013 11:34 AM EST||
OTTAWA, Dec. 20, 2013 /CNW/ - Employment and Social Development Canada today announced the benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2014.
CPP benefits will increase by 0.9 percent for those already receiving CPP benefits. CPP benefits are revised once a year, in January, based on changes over a 12-month period (November 2012 to October 2013) in the Consumer Price Index (CPI), which is the cost-of-living measure used by Statistics Canada.
The maximum CPP retirement benefit for new recipients will increase from $1,012.50 to $1,038.33 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 December 31, 2014.
OAS benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will increase by 0.1 percent. These payments 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. The maximum basic OAS pension will increase from $550.99 to $551.54 per month.
The GIS and the Allowances provide additional income to low-income pensioners, their spouses or common-law partners, and eligible survivors. Budget 2011 enhanced the GIS by providing a top-up that represents an investment of more than $300 million per year, to improve the financial security and well-being of more than 680,000 seniors across Canada. This represents the largest increase for the lowest-income GIS recipients in a quarter century.
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.
For further information, please consult the Employment and Social Development Canada website at www.hrsdc.gc.ca.
The Old Age Security (OAS) program and the Canada Pension Plan (CPP) enhance the quality of life of Canadian seniors by providing a modest base upon which to build additional income for retirement.
The OAS program is funded through general tax revenues and provides a basic minimum income for Canadian seniors. The program provided 5.2 million people with over $40 billion in 2012-2013.
The CPP (or the Quebec Pension Plan in Quebec) is funded through contributions by Canadian workers, their employers, the self-employed and through investment earnings on the Plan's funds. In addition to retirement benefits, the Plan provides disability, death, survivor and children's benefits.
The CPP is a stable, well-designed plan that is portable from province to province and fiscally sustainable over the long run. The Chief Actuary of Canada has confirmed that the CPP is financially sound and fully sustainable for generations to come.
Canada's strong public pension system—including the Guaranteed Income Supplement (GIS)—has had great success in reducing poverty among seniors. In fact, the incidence of poverty among seniors in Canada has dropped from a rate of 21.4 percent in 1980 to 5.2 percent in 2011.
MAXIMUM CANADA PENSION PLAN BENEFIT RATES AS OF JANUARY 1, 2014
|Type of Canada Pension Plan Benefit||Maximum Benefit Rates for 2014|
|Retirement pension (at age 65)||$1,038.33|
|Post-Retirement Benefit (at age 65)||$25.96|
|Survivor's pension (under age 65)||$567.91|
|Survivor's pension (age 65 and over)||$623.00|
|Disabled contributor's child benefits||$230.72|
|Deceased contributor's child benefits||$230.72|
|Survivor/Retirement (retire at age 65)||$1,038.33|
MAXIMUM OLD AGE SECURITY BENEFIT RATES AS OF JANUARY 1, 2014*
Type of Old Age Security
Maximum monthly benefit
January - March 2014
October - December 2013
|Basic Old Age Security pension||$551.54||$550.99|
Guaranteed Income Supplement*
|Spouse/Common-law partner of|
|● a non-pensioner||$747.86||$747.11|
|● a pensioner||$495.89||$495.39|
|● an Allowance recipient||$495.89||$495.39|
* These amounts include the Guaranteed Income Supplement and the Allowances top-up
SOURCE Employment and Social Development Canada