Canadian seniors receiving public pensions will see their monthly income rise starting June 2025. The Canada Revenue Agency (CRA) has finalized increases to both the Canada Pension Plan (CPP) and Old Age Security (OAS). These adjustments reflect not only inflation protection but also structural enhancements introduced in recent years to strengthen income security for older Canadians.
CPP & OAS Pension Boost Coming This June
| Feature | Details |
|---|---|
| Programs Affected | Canada Pension Plan (CPP) & Old Age Security (OAS) |
| Effective Date | June 2025 |
| CPP Maximum Monthly Benefit | $1,433 (up from $1,364.60 in 2024) |
| OAS Maximum Monthly Benefit | $727.67 (ages 65–74), $800.44 (ages 75+) |
| CPP Contribution Rates | 5.95% (employees and employers); 11.9% (self-employed) |
| YMPE (2025) | $71,300 |
| YAMPE (2025) | $81,200 |
| OAS Adjustment Frequency | Every quarter: January, April, July, and October |
| Official Information Source | canada.ca – CPP & OAS Payment Figures |
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CPP increase brings higher retirement payments based on expanded earnings limits
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OAS adjusted to reflect inflation, with a bonus boost for seniors aged 75+
CPP Enhancements Explained
The CPP continues to evolve through the multi-phase enhancement that began in 2019. The June 2025 changes are part of this long-term plan, aimed at improving retirement income stability.
The most notable change is the increase in the maximum monthly CPP benefit, now rising to $1,433. However, this maximum applies only to those who have consistently contributed the maximum amount over a full 39-year career. Most retirees will receive less, based on their actual contributions.
The enhancement also introduces a second earnings limit—YAMPE, or Year’s Additional Maximum Pensionable Earnings—now set at $81,200. Contributions between the YMPE ($71,300) and YAMPE are part of the new tiered contribution system under CPP enhancement phase 2. This will eventually lead to even higher benefits for future retirees.
Changes to CPP Contributions
To support the benefit increase, contributions are slightly higher:
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Employees pay 5.95% of their pensionable earnings up to the YMPE
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Employers match this amount
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Self-employed individuals pay the full 11.9%
This additional contribution applies only to employment income and does not affect investment or pension income.
OAS Enhancements in Detail
OAS continues to be adjusted every quarter based on the Consumer Price Index (CPI), ensuring it keeps pace with inflation. The current maximum monthly payments after the June increase are:
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$727.67 for those aged 65 to 74
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$800.44 for those aged 75 and older
The larger amount for seniors aged 75+ is part of the permanent 10% increase introduced in 2022.
Eligibility for OAS remains unchanged. It begins at age 65 for Canadian citizens and legal residents who meet the residency requirements (usually at least 10 years in Canada after age 18).
Why These Increases Matter
The rising cost of living is making it harder for older Canadians to make ends meet. Housing, groceries, and healthcare have all gone up. By increasing both CPP and OAS, the government is responding to these pressures.
These boosts are also part of a long-term retirement income strategy. CPP enhancements are designed to replace a greater share of pre-retirement earnings, especially for younger workers who contribute under the enhanced structure.
The OAS increases, while more modest, help seniors—especially those on fixed incomes—manage rising daily expenses. The 10% bump at age 75 also recognizes the additional challenges faced by older seniors.
Looking Ahead
Future CPP benefit amounts will depend heavily on wage growth and contribution history. As enhancements phase in fully over the next decade, future retirees—especially those born after 1970—will see a much higher return on their CPP contributions.
OAS, being indexed quarterly, will continue to adjust with inflation. The next review and update are scheduled for July 2025.
FAQ
What is the new maximum CPP benefit for 2025?
The new maximum monthly CPP retirement benefit at age 65 is $1,433. This is available only to those with maximum contributions over 39 years.
How much will OAS pay starting June 2025?
Seniors aged 65 to 74 will receive up to $727.67 monthly. Seniors aged 75 and older will receive up to $800.44.
Who qualifies for the CPP increase?
Anyone contributing to the CPP in 2025 will be affected by the new thresholds and benefit calculations. Only those with maximum contributions qualify for the top payout.
Why are there two CPP earnings limits now?
The traditional YMPE remains, but the YAMPE introduces a second tier to support enhanced contributions and future benefits. It applies to high-income earners and is part of phase 2 of the CPP enhancement.
When are OAS rates updated?
OAS is reviewed and adjusted quarterly—in January, April, July, and October—based on the Consumer Price Index.
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