The month of March 2025 will witness massive changes for retired citizens in Canada with respect to the Canada Pension Plan (CPP) and Old Age Security (OAS) plans. These changes are made to ensure that the finances of seniors are kept stable amid the inflationary trend.
If you already are receiving these benefits or planning your retirement, it is worthwhile to be aware of the changes ahead to make the right financial decisions.
In this article, we shall look into the CPP and OAS pension hikes coming in March 2025, the rationale behind the changes, and how to enhance your retirement income.
ALSO READ: New stimulus checks landing bank accounts
Pension Changes in March 2025 – An Overview
Come March 2025, seniors in Canada will continue with their monthly OAS and CPP benefit payments. This year, an increase of 2.7% was granted to CPP payments while OAS remained unchanged this quarter. However, OAS will be re-evaluated again in April 2025 based on the inflation figure.
With the knowledge of how these benefits work, when to begin receiving them, and how to optimize them, you will be financially secure during your retirement.
Payment Schedule of the Pensions Due in March 2025
| Benefit | Age Group | Maximum Monthly Amount (2025) | Increase Details |
|---|---|---|---|
| Old Age Security (OAS) | 65 to 74 years | $727.67 | No change from the previous quarter |
| Old Age Security (OAS) | 75 years and over | $800.44 | No change from the previous quarter |
| Canada Pension Plan (CPP) | All Eligible | $1,433.00 | Increased by 2.7% |
Understanding Old Age Security (OAS)
What is Old Age Security?
Old Age Security (OAS) is another monthly pension paid to Canadians aged 65 and over, whether they have worked at all or not. Thus, it differs from the CPP in that the CPP is a payment based on contributions made while working, while OAS is the payment given to all those who fit into the established residency criteria.
OAS Payment Status in March 2025
For the quarter of January-March 2025, OAS payments will be:
- From ages of 65-74: $727.67 per month.
- From ages of 75+: $800.44 per month.
This quarter has not witnessed an increase, but every three months OAS payments are adjusted according to inflation to protect the purchasing power of the older citizens.
ALSO READ: US Government Confirms a New Social Security Payment of Up to $5,108 on March 19
Factors Influencing OAS Payment Amounts
For OAS, every quarter the payment is reviewed and adjusted according to Consumer Price Index (CPI). The CPI measures living costs, which include food, transport, and housing. If inflation spikes, the CPI increases thereby increasing OAS payments.
Ways in which you might maximize receiving the OAS benefits
Delay OAS Payments: The longer you put off drawing OAS benefits, the more your monthly amount increases (by up to 0.6% for each month), which makes it 36% higher by the time you are 70.
If your income is low, you could receive additional support-granting OAS with GIS through its facilties.
2025 Amends to the Canada Pension Plan (CPP)
Canada Pension Plan definition
Canada Pension Plan (CPP) refers to a contribution-based pension that pays retirement, disability, and survivor benefits. Payments are unlike OAS since OAS are made according to contributions made by you when you worked.
CPP increases for 2025
In January 2025, an OAS benefit increase of 2.7% went into effect as part of the adjustment for inflation and the enhancement to the CPP.
- Maximum monthly benefit: $1,433.00 (for people who made the maximum contribution).
- Average monthly benefit for new retirees: $808.14.
How the CPP Enhancement Works
Since its inception in 2019 and phased in gradually to 2025, the CPP Enhancement Program is aimed at increasing the CPP replacement rate from 25% to 33.33%.
The highlights of the CPP Enhancement are as follows:
- Increased contributions coming from both the employees and employers.
- Increased benefits for future retirees, especially for the young, have been consistent contributors.
Ways to maximize CPP
- Contribute more throughout your life: The more you contribute, the higher your CPP benefits.
- Postpone CPP payment: By waiting to receive any CPP payments after age 65, the monthly payment will increase by 0.7% per month, resulting in a 42% increase by age 70.
2025 Payment dates for OAS and CPP
Your payment dates for receiving OAS or CPP are as follows:
| Month | Payment Date |
|---|---|
| January | January 29, 2025 |
| February | February 26, 2025 |
| March | March 27, 2025 |
| April | April 28, 2025 |
| May | May 29, 2025 |
Conclusion
These amendments to Canada’s pension plans concerning the changes applied to OAS and CPP benefits shall appear prominently in the updates. At least this quarter has seen no changes in OAS payments, while the CPP has once again increased in benefits due to the continued implementation of the CPP Enhancement Program.
Build your financial knowledge about these OAS and CPP changes, and implement strategies towards maximizing them for your financial security throughout retirement. Actively manage your pension plan and initiate the process of keeping yourself updated with any future changes that come your way, so you can live your retired life free of financial anxieties.