How the CRA is Increasing Your OAS Pension in 2024

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Are you a senior who receives the (Old Age Security) OAS pension from the Canada Revenue Agency (CRA)? If so, you might be wondering how much your OAS pension will increase in 2024. Well, we have some good news for you. The CRA is adjusting the OAS pension amount every quarter based on changes in the Consumer Price Index (CPI). This means that your OAS pension will keep up with inflation and the rising cost of living. In this article, we will explain how the CRA calculates the OAS pension increase, how much you can expect to receive in 2024, and what you can do to maximize your retirement income.

Also Read: How to Claim Housing Benefit New CRA Benefits in 2024
OAS pension
Learn how the CRA is increasing your OAS pension in 2024, how much you can expect to receive, and what you can do to maximize your retirement income.

How the CRA Calculates the OAS Pension Increase

The OAS pension is a monthly benefit that you can receive if you are 65 years or older and meet the residency and legal status requirements. The OAS pension amount is determined by how long you have lived in Canada after the age of 18 and your net income. The OAS pension is considered taxable income and is subject to a recovery tax if your net income exceeds a certain threshold.

The CRA adjusts the OAS pension amount every quarter (January, April, July, and October) based on changes in the CPI. The CPI is a measure of the average change in prices of a fixed basket of goods and services that Canadians typically buy. The CPI reflects the cost of living in Canada and is used to index various government benefits and taxes.

The CRA uses the CPI data from Statistics Canada to calculate the percentage change in the OAS pension amount. The percentage change is applied to the maximum OAS pension amount for the previous quarter to determine the new maximum OAS pension amount for the current quarter. The new maximum OAS pension amount is then multiplied by the percentage of the full OAS pension that you are entitled to based on your years of residence in Canada.

For example, if the CPI increased by 1% from the previous quarter, the maximum OAS pension amount would increase by 1% as well. If the maximum OAS pension amount for the previous quarter was $700, the new maximum OAS pension amount for the current quarter would be $707 ($700 x 1.01). If you have lived in Canada for 40 years or more after the age of 18, you would receive the full OAS pension of $707. If you have lived in Canada for 20 years after the age of 18, you would receive 50% of the full OAS pension, which is $353.50 ($707 x 0.5).

How Much OAS Pension Will You Receive in 2024?

The OAS pension amount for 2024 will depend on the CPI changes in 2023 and the first quarter of 2024. Based on the latest CPI data from Statistics Canada, the OAS pension amount increased by 0.8% for the October to December 2023 quarter, for an increase of 3.7% over the past year, from January 2023 to January 2024¹. This means that the maximum OAS pension amount for the October to December 2023 quarter is $734.21, up from $728.61 in the previous quarter.

If the CPI continues to increase at the same rate in 2024, we can estimate the OAS pension amount for each quarter of 2024 using the following table:

QuarterCPI ChangeMaximum OAS Pension Amount
January to March 20240.8%$740.28 ($734.21 x 1.008)
April to June 20240.8%$746.44 ($740.28 x 1.008)
July to September 20240.8%$752.69 ($746.44 x 1.008)
October to December 20240.8%$759.02 ($752.69 x 1.008)

Of course, these are only estimates and the actual OAS pension amount for 2024 may vary depending on the actual CPI changes. The CRA will announce the official OAS pension amount for each quarter on its website.

If you are 75 years or older in June 2022, you will also receive a 10% increase of your OAS pension starting in July 2022². This means that your OAS pension amount will be 10% higher than the maximum OAS pension amount shown in the table above. For example, if you are 75 years or older in July 2022, your OAS pension amount for the January to March 2024 quarter will be $814.31 ($740.28 x 1.1), instead of $740.28.

How to Maximize Your Retirement Income

The OAS pension is a valuable source of income for Canadian seniors, but it may not be enough to cover all your expenses in retirement. That’s why you should also consider other sources of income, such as the Canada Pension Plan (CPP), personal savings, investments, and other government benefits.

The CPP is another monthly benefit that you can receive if you have contributed to the CPP during your working years. The CPP amount is based on your contributions and earnings history, and you can choose when to start receiving it between the ages of 60 and 70. The earlier you start, the lower your monthly amount will be, but the longer you will receive it. The later you start, the higher your monthly amount will be, but the shorter you will receive it. The average CPP retirement pension as of 2022 is $814.58 per month.

Personal savings and investments are also important for your retirement income. You should save and invest as much as you can during your working years, and use tax-advantaged accounts such as the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA) to grow your money faster. You can also use the HustleHub platform to find the best deals on financial products and services, such as savings accounts, credit cards, loans, mortgages, and insurance. HustleHub is a one-stop shop for all your financial needs, and it helps you save time and money by comparing hundreds of offers from different providers.

Other government benefits that you may be eligible for include the Guaranteed Income Supplement (GIS), the Allowance, and the Allowance for the Survivor. These are additional monthly payments that are available to low-income seniors who receive the OAS pension. The GIS is for single, widowed, or divorced seniors, the Allowance is for seniors who have a spouse or common-law partner who receives the OAS pension, and the Allowance for the Survivor is for seniors who are widowed and between the ages of 60 and 64. The payment amounts for these benefits vary depending on your income and marital status, and they are not taxable.

Conclusion

The CRA is increasing your OAS pension in 2024 to help you cope with inflation and the rising cost of living. The OAS pension amount is adjusted every quarter based on changes in the CPI, and you can expect to receive more money in 2024 than in 2023. However, the OAS pension alone may not be enough to fund your retirement lifestyle, so you should also consider other sources of income, such as the CPP, personal savings, investments, and other government benefits. You can also use HustleHub to find the best financial products and services for your needs, and save time and money in the process.

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FAQ’s

Q: How do I apply for the OAS pension and other benefits?

A: You can apply online, by mail, or in person at a Service Canada office. You should apply at least six months before you turn 65 or when you meet the eligibility criteria.

Q: How do I defer my OAS pension?

A: You can choose to defer your OAS pension for up to five years after you become eligible, in exchange for a higher monthly amount. You can indicate your choice when you apply for the OAS pension, or you can notify Service Canada before your 65th birthday.

Q: How do I report my income for the OAS pension and other benefits?

A: You must report your income to the CRA every year by filing your income tax return. The CRA will use your net income to determine your eligibility and payment amount for the OAS pension, the GIS, the Allowance, and the Allowance for the Survivor.

Q: How do I avoid the OAS recovery tax?

A: The OAS recovery tax is a clawback that reduces your OAS pension if your net income exceeds a certain threshold. For 2023, the threshold is $81,761. You can reduce your net income by using strategies such as splitting your pension income with your spouse, contributing to an RRSP, or investing in a TFSA.

Q: How do I increase my CPP retirement pension?

A: The CPP retirement pension is based on your contributions and earnings history. You can increase your CPP retirement pension by working longer, earning more, or delaying your CPP start date. You can also take advantage of the CPP enhancement, which will increase your CPP contributions and benefits gradually from 2019 to 2025.

Q: How do I check my CPP and OAS payment dates and amounts?

A: You can check your CPP and OAS payment dates and amounts online by using the My Service Canada Account (MSCA). You can also sign up for direct deposit to receive your payments faster and more securely.

Q: How do I update my personal information for the CPP and OAS?

A: You can update your personal information such as your address, banking information, marital status, or citizenship status online by using the MSCA. You can also contact Service Canada by phone, mail, or in person.

Q: How do I appeal a decision about my CPP or OAS application or payment?

A: If you disagree with a decision about your CPP or OAS application or payment, you can request a reconsideration within 90 days of receiving the decision. If you are still not satisfied, you can appeal to the Social Security Tribunal of Canada within 90 days of receiving the reconsideration decision.

Q: How do I access other financial resources and programs for seniors?

A: There are many other financial resources and programs available for seniors in Canada, such as the Canada Seniors Benefit, the Age Credit, the Pension Income Credit, the Home Accessibility Tax Credit, and the New Horizons for Seniors Program.

Q: How do I use HustleHub to find the best financial products and services for my needs?

A: HustleHub is a platform that helps you compare hundreds of offers from different providers of financial products and services, such as savings accounts, credit cards, loans, mortgages, and insurance. You can use HustleHub to find the best deals, save time and money, and achieve your financial goals. To get started, visit HustleHub.

Source: (1) Old Age Security payment amounts – Canada.ca. https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html. (2) Old Age Security: How much you could receive – Canada.ca. https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/benefit-amount.html. (3) Old Age Security payment amounts – Canada.ca. https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html. (4) CPP and OAS Payment Increase 2024. What To Expect. https://canpension.ca/articles/cpp-oas-2024.

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