As Canadians approach retirement, understanding the various public pension programs becomes essential for financial planning.
In 2025, four primary programs – Old Age Security (OAS), Guaranteed Income Supplement (GIS), Canada Pension Plan (CPP), and Quebec Pension Plan (QPP) – offer benefits to eligible individuals.
This article provides a detailed overview of these programs, their eligibility criteria, and the benefits they offer.
Old Age Security (OAS)
OAS is a federal program providing a monthly pension to Canadians aged 65 and older. Eligibility requires Canadian citizenship or legal residency and a minimum of 10 years of residence in Canada after the age of 18.
The benefit amount is influenced by the duration of residency and income levels. As of January to March 2025, the maximum monthly OAS payments are:
- Ages 65 to 74: Up to $727.67
- Ages 75 and over: Up to $800.44
It’s important to note that OAS benefits are considered taxable income. Individuals with an annual net income exceeding $90,997 in 2024 may be subject to the OAS pension recovery tax, commonly known as the “clawback,” which reduces the OAS amount received.
Benefits are fully repaid if income surpasses $142,609 for those aged 65 to 74, and $148,179 for those 75 and over.
Guaranteed Income Supplement (GIS)
GIS is a non-taxable benefit aimed at low-income seniors receiving OAS. Eligibility depends on marital status and income thresholds. For January to March 2025, the maximum monthly GIS payments are:
- Single, widowed, or divorced individuals: Up to $1,086.88, with an annual income below $22,056
- Married or common-law partners (both receiving OAS): Up to $654.23 each, with a combined annual income below $29,136
- Married or common-law partners (one receiving OAS, the other not): Up to $1,086.88, with a combined annual income below $52,848
These amounts are subject to change based on individual circumstances and are adjusted quarterly.
Canada Pension Plan (CPP)
CPP is a contributory, earnings-related social insurance program. Canadians aged 60 and above who have made at least one valid contribution are eligible for retirement benefits.
The standard age to begin receiving CPP is 65, but individuals can choose to start as early as 60 or delay up to 70, with adjustments to the benefit amount.
As of 2025, the maximum monthly CPP payment at age 65 is $1,433. The actual amount received depends on factors such as the duration and amount of contributions and the age at which benefits commence.
Quebec Pension Plan (QPP)
QPP serves as Quebec’s counterpart to the CPP, providing similar retirement, disability, and survivor benefits to Quebec residents.
Eligibility requires at least one year of contributions, with benefits calculated based on the contributor’s earnings and contribution history.
In 2025, QPP contributions are set at 12.80% of annual employment income between $3,500 and the maximum pensionable earnings of $71,300. The maximum monthly QPP retirement benefit at age 65 is $1,387.08.
Summary of Maximum Monthly Benefits for 2025
| Benefit Program | Maximum Monthly Payment |
|---|---|
| OAS (65-74) | $727.67 |
| OAS (75+) | $800.44 |
| GIS | $1,086.88 |
| CPP | $1,433.00 |
| QPP | $1,387.08 |
Enhancements and Additional Support
To address inflation and rising living costs, the Canadian government has implemented enhancements to these pension programs:
- CPP Enhancements: Starting in 2019, CPP benefits are gradually increasing. By 2025, the income replacement rate will rise from 25% to 33.33% of covered earnings, and the maximum income subject to CPP contributions will increase by 14%, reaching $79,400. These changes aim to provide higher retirement income for contributors.
- OAS Increase for Seniors 75 and Over: Effective July 2022, OAS benefits for seniors aged 75 and over have been permanently increased by 10%, reflecting the government’s commitment to supporting older Canadians.
Understanding the various public pension programs—OAS, GIS, CPP, and QPP—is crucial for Canadians planning their retirement.
Each program has specific eligibility criteria and benefits designed to provide financial support during retirement.
Staying informed about these programs and any enhancements ensures that individuals can maximize their retirement income and maintain financial stability in their later years.
FAQs
Can I receive both CPP and OAS benefits simultaneously?
Yes, eligible Canadians can receive both CPP and OAS benefits concurrently, as they are separate programs with distinct eligibility requirements.
How does deferring OAS payments affect the benefit amount?
Deferring OAS payments beyond age 65 increases the monthly benefit by 0.6% for each month deferred, up to a maximum of 36% at age 70.
Are CPP and OAS benefits considered taxable income?
Yes, both CPP and OAS benefits are considered taxable income. Recipients may have taxes deducted at the source or may need to pay taxes when filing their annual tax return.