CRA Announces Pension Payment Increase: In today’s time when the prices of everything are constantly increasing, a good news is coming for senior citizens dependent on pension. According to some recent reports, the Canadian government is planning to increase pension payments through CRA (Canada Revenue Agency).
This initiative will be very beneficial for the elderly who depend on government schemes like CPP (Canada Pension Plan) and OAS (Old Age Security) to meet their needs after retirement.
If you also want to know who will be eligible in this new scheme, how much money will increase and what things are important to keep in mind, then read this article till the end.
What is the objective of CRA’s new scheme?
The main objective of the government is that every senior citizen should get financial security even after retirement.
In view of inflation and rising cost of living, the government amends the pension schemes every year. This is the reason why CRA is now working on increasing the pension amount.
In simple words, this scheme will bring relief to those senior citizens living in Canada who bear their essential needs like medicine, rent, electricity-water bills and food expenses in limited income.
Complete information about this scheme is also given on the CRA website. Let us understand this scheme in detail.
Understanding CRA’s new pension plan
In Canada, OAS (Old Age Security) payment is adjusted every three months based on CPI (Consumer Price Index) and inflation rate. Meaning, there may be a change in payment every quarter.
On the other hand, changes in CPP (Canada Pension Plan) are made on an annual basis. There can be many changes in it such as:
- Change in payment amount
- Change in maximum pensionable income
- Maximum annual payment limit
- Change in contribution rate
- Change in income limit
The amount of OAS payment is also affected by how many years you have resided in Canada after the age of 18.
OAS has increased by 1.3% in the current year.
- Maximum monthly OAS payment for people aged 65 to 74: CAD $727.67
- For 75 years and above: CAD $800.44
The maximum eligible earnings for CPP have also increased by 14%.
If an employee contributes to CPP for 40 years, he will get up to 50% more CPP retirement payment.
Therefore, it is very important to keep contributing to CPP regularly during your tenure so that you can get a higher pension at the time of retirement.
CRA New Plan Brief Description
- Plan Name: CRA New Plan – Increase in Pension Payments
- Start: Canada Revenue Agency
- New Increased Amount: Further in the article
- Eligibility Age: 60 years or above
- Read full information here
Who will be eligible?
Now the biggest question is who will get the benefit of this increased pension?
Some eligibility rules have been fixed for this:
- The applicant must be a Canadian citizen or permanent resident.
- The applicant’s income should be limited i.e. low income.
- All senior citizens taking advantage of OAS and CPP will be eligible for this increased pension.
- The minimum age for OAS is 60 years, for CPP also 60 years, but if you start taking benefits at the age of 65, the amount of payment will be higher.
- The applicant must have contributed to CPP during working life.
- Must have been residing in Canada for at least 10 years.
- Tax returns must be filed on time every year.
Under this scheme, millions of retired citizens will get the help they need every month.
The CRA keeps changing the policies and rules related to OAS and CPP from time to time so that pension plans can be more effective.
How much will be the increased pension amount?
This question is in everyone’s mind that how much will the pension increase?
CPP and OAS payments are the main income sources for senior citizens.
The income limit is being increased in OAS in 2025.
The increased pension in CPP depends entirely on how much and for how many years you have contributed during your career.
You can contribute to CPP only on wages between $3500 and the annual maximum eligible income.
This maximum income limit has been fixed at $71,300 in 2025. This means that those whose annual earnings are within this limit can make the maximum contribution and their pension will increase accordingly.
Employees who contribute for a long time will get higher CPP pension at the time of retirement.
For example, if an employee contributes to CPP for 40 years, he can get 50% more CPP pension.
OAS is also increased from time to time so that the effect of inflation can be balanced.
Why is this change necessary?
If we look at the current economic situation, then this change is very important.
Day-to-day inflation is increasing.
Medicines, rent, food items, electricity and water bills – everything has become expensive.
It is becoming difficult to live on limited income after retirement.
In such a situation, the increase in CPP and OAS will be like a relief for senior citizens.
With this, they will be able to:
- Be able to afford their medicines.
- Will be able to pay rent and essential bills.
- It will be easy to buy food items.
- Will be able to maintain a better standard of living.
This initiative of the government is considered a big step towards strengthening the financial condition of the elderly.
What to do next?
If you want to get a good pension at the time of retirement, then it is important that:
- Contribute to CPP continuously during the tenure.
- File your tax returns on time each year.
- Keep your information updated by visiting the CRA portal.
- Login to My Service Canada Account to make CPP contributions.
- Keep calculating the situation and potential pension.
The higher the contribution, the higher the pension.
Conclusion
The main objective of the changes made by the CRA to the CPP and OAS plans in 2025 is to reduce the financial challenges of senior citizens.
This change will prove to be very important not only for the current generation of pensioners but also for the future generation of retirees.
You can get complete and latest information by visiting the government website CRA or www.canada.ca.
Finally, keep contributing to the CPP continuously throughout your career so that you can get maximum benefits at the time of retirement.
We hope you liked this article about CRA New Scheme – Increase in Pension Payments. If you have any further questions or information, do let us know.
