The cost of living in Canada keeps increasing; elderly citizens will have some economic respite. In June 2025, the federal government will introduce a long-overdue monthly payment increase for the Canada Pension Plan (CPP) and Old Age Security (OAS).
These increases are aimed at keeping up with inflation and helping retired Canadians live their twilight years comfortably. Here, we’ll tell you what these benefits are, how much they’re rising by, who is eligible, when you’ll get the additional money, and how to ensure that you receive what you’re entitled to.
What Are CPP and OAS?
Canada Pension Plan (CPP)
The CPP is a contributory retirement benefit. Working Canadians and their employers contribute a share of their income into this plan over the course of their working lives.
When a person retires (as soon as age 60, but most often at 65), they can start to receive an ongoing monthly retirement benefit based on how much and for how long they contributed. CPP also offers disability, survivor, and death benefits based on eligibility.
Old Age Security (OAS)
In contrast to CPP, the OAS is not established on prior employment or contributions. It is a taxable monthly pension financed by general tax revenues and comes to Canadians who are 65 and older and have the necessary legal status and residence.
The OAS program also involves:
- Guaranteed Income Supplement (GIS) for low-income seniors
- Allowance for spouses or common-law partners of GIS recipients
- Allowance for the Survivor for low-income widowed people between 60 and 64
What’s Changing in June 2025?
Beginning June 2025, the Government of Canada will boost CPP and OAS recipients’ monthly payments. This is just part of the government’s continuous work to have pension payments adjust to changes in the Consumer Price Index (CPI) as well as support seniors to keep their purchasing power during times of inflation.
CPP Increase Details
- Average CPP recipient: Can expect an increase of $30 to $50 per month
- Maximum CPP recipients: May get as much as $70 more a month based on contribution record
- Why: CPI-indexed boost linked to last year’s inflation
OAS Increase Information
- For 65-74-year-old seniors: Projected increase of $20 to $35 a month
- For seniors 75 and older: Could get as much as $45 more a month
- Recent precedent: The OAS was permanently increased by 10% for seniors 75+ in July 2022, and the same increases are considered on an annual basis.
The boost will be seen in the June 2025 OAS and CPP payment period, giving a timely lift to pay for rent, groceries, medication, and utilities.
Why Are CPP and OAS Payments Increasing?
The government raises CPP and OAS benefits according to the Consumer Price Index (CPI), a gauge of inflation. If prices on necessities such as housing, groceries, and transportation rise, retirement income must also increase in order to keep up with the cost of living.
Other reasons are:
- Cost of living increases: Inflation in Canada is ongoing, and fixed-income seniors are among the most vulnerable.
- Economic stimulus: Additional funds for retirees keep money circulating in local economies through spending.
- Commitment to retirement security: The government has committed to shielding seniors from financial insecurity.
Who Is Eligible for the June 2025 Increase?
For CPP:
You qualify for the increase if you:
- Already have Canada Pension Plan retirement, disability, or survivor benefits?
- Are you aged 60 or more and have you made valid contributions to CPP?
- Have not withdrawn from automatic indexing.
The boost is automatic you don’t need to apply or notify your records.
For OAS:
You qualify for the boost if you:
- Are 65 and older
- Are you a Canadian citizen or legal resident?
- Have lived in Canada for 10 years or more since reaching age 18 (for partial pension).
- Have 20 years of Canadian residence since age 18 for a full pension.
Once more, the OAS boost is automatic to all eligible recipients.
When Will the Increases Be Effective?
The increase to payments will start with the June 2025 payment period. Here’s what to expect:
- CPP Payment Date: June 26, 2025
- OAS Payment Date: June 26, 2025
- New amount: Will be reflected in your direct deposit or check value in that month.
To check your new payment value, sign in to your My Service Canada Account (MSCA), where all your benefit payment information is accessible.
How to Check or Apply for CPP/OAS
If you are already receiving CPP or OAS, you do not need to do anything. If you’re approaching 60 (CPP) or 65 (OAS) and you wish to apply, here’s what you need to do:
How to Apply for CPP:
- Online: Through My Service Canada Account
- By mail: Mail a completed application to Service Canada.
Apply at least 6 months before you would like your benefits to begin.
How to Apply for OAS:
- Automatic enrollment: Certain people are automatically enrolled and advised
- If not enrolled: Apply by My Service Canada Account or by mail.
- It’s best to apply 6 months prior to age 65.
Will This Affect Taxes or Other Benefits?
Yes, in a few important ways:
- CPP is taxable. The added income will form part of your taxable income.
- OAS is subject to clawback and taxation. If you earn more than $90,997 (2025 estimate), you will be required to pay back some or all of your OAS.
- GIS might be affected: Higher OAS will cut GIS by a small amount for those who are close to their income limits.
Remember to factor these increases into your 2025 tax return.
What Seniors Should Do Now
To get the most out of this coming pension boost:
- Check if you qualify.
- Log in to MSCA to verify your payment amounts.
- Change your direct deposit information if it has changed.
- Discuss tax implications with a financial advisor.
- Qualify for any ancillary benefits such as GIS, where relevant.
Read More:- UK Government Announces June 2025 Housing Benefit Adjustments – Full Guide for Renters
Conclusion
The June 2025 CPP and OAS increases are a beneficial step for Canada’s seniors and retirees. With a small but significant monthly increase, the government is seeking to assist older Canadians in keeping themselves financially stable in the face of economic adversity.
For millions of recipients, these additional dollars can truly have an impact on covering necessary bills, eliminating financial stress, and living a higher standard of living. If you’re already receiving payments, you don’t have to lift a finger the funds will be deposited into your account automatically. But if you’re near retirement, now’s the ideal time to review your eligibility and get your applications in.
Canada’s pension framework remains among the world’s strongest, and this future adjustment is yet another move to ensure it remains so.
FAQs:-
What is the reason behind the June 2025 CPP and OAS payment increase?
The federal government is adjusting payments to match inflation and improve income support for seniors.
Who is eligible for the OAS increase?
Canadian residents aged 65 or older who meet residency and income criteria qualify for the boosted OAS.
Where can I check my new payment amount?
You can log into your My Service Canada Account (MSCA) to view updated CPP and OAS benefit details.
