After a lifetime of hard work, seniors deserve dignified and secure retirements. That is why the Government of Canada has worked with provincial and territorial governments to enhance the Canada Pension Plan (CPP). On January 1, 2019, CPP changes came into effect, ensuring better retirement income for today’s workers.
Under the enhanced pension plan, the amounts that Canadians pay into the plan before retirement will gradually rise by 2025. The gradual increase will ensure workers and employers can adjust. Once fully phased in, the CPP enhancement will increase the maximum CPP retirement pension by as much as 50 percent for the youngest workers. Additional improvements to strengthen the CPP will provide further benefits to parents of young children, people with severe and prolonged disabilities, survivors, and the families of deceased workers who had low incomes.
The Government of Canada has also worked to restore the age of eligibility for Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) from 67 to 65 and increased the GIS amount by almost $1,000 per year for the most vulnerable single seniors. These new measures will provide more money to Canadians when they retire, so that they can enjoy a secure and dignified retirement.
Initiatives like these support the Government’s overall commitment to improve the well-being of all Canadians, strengthen the middle class and help those working hard to join it.
“All seniors deserve a fair and dignified retirement that recognizes their hard work. That is why the government took the initiative to strengthen and improve the Canadian Pension Plan. I am pleased that these changes will help seniors plan for their retirement futures while building strong systems that support Canadians in the older years.”
– The Honourable Filomena Tassi, Minister of Seniors
- On January 1, 2019, the Government of Canada implemented reforms to the CPP, increased benefits and contributions, and strengthened the retirement income security of today’s workers to maintain their standard of living when they leave the labour force.
- Five additional CPP improvements also took effect January 1, 2019. These changes provide further support to parents, persons with disabilities, young survivors, and families of deceased low-income workers. The five improvements are:
- The Child Rearing Drop-in supports parents who stop working or reduce their work hours to become the primary caregiver to their children under the age of 7. The provision increases the pensions of parents who reduce their income to take care of their children.
- The Disability Drop-in increases retirement pensions for individuals with severe and prolonged disabilities.
- The Survivor’s Pension Reform eliminates age-based reductions; now every survivor whose deceased spouse/partner made sufficient CPP contributions will be eligible for a survivor’s pension.
- The Flat-Rate Death Benefit is a lump-sum benefit that will be increased to its maximum value of $2,500for all eligible contributors. This means that the estates of all eligible contributors will receive the same amount, regardless of actual earnings.
- The Post Retirement Disability Benefit will support disabled individuals collecting an early retirement pension. Individuals will need to meet the same medical and contributory requirements as for the CPP disability pension.
- Seniors are the fastest-growing demographic group in Canada. By 2030, the number of seniors will reach almost 9.6 million people, representing close to one quarter of Canada’s population.