Social Development Canada has announced that CPP benefits, adjusted once a year based on the Consumer Price Index, will increase starting January 1.
The country’s Old Age Security (OAS) benefits, which provide basic minimum income for more than 96% of the country’s seniors, will not see an increase in 2005. OAS benefits are calculated quarterly and retirees have seen a 2.2% increase over the past year in the benefits. The current payout for OAS benefits – paid to those 65 and older – sits at $471.76 per month. In 2003/2004, the OAS system paid out a total of $27 billion to 4.1 million senior citizens.
Through OAS benefits, low-income Canadians also receive Guaranteed Income Supplement (GIS) and the Allowance. Adjusted quarterly, this benefits scheme will not see an increase in payouts in the next quarter.
CPP benefits are funded by workers and their employers, as well as through earnings on investments in the plan. OAS benefits originate from general tax revenues. These two systems make up the two public parts of what Canadians consider a three-part retirement system, the third being private savings and investments.