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How Much Will CPP and OAS Increase in 2023?

Canada Pension Plan (CPP) and Old Age Security (OAS) benefits are adjusted yearly to reflect changes in the cost of living or inflation.

Also referred to as the Consumer Price Index (CPI), the government increases pension benefits when the cost of living goes up.

How much will CPP and OAS increase in 2023? We cover this in detail below.

How Much Will CPP Increase in 2023?

CPP payments have increased by 6.5% in 2023 compared to 2022. This increase is much higher compared to what we have seen in recent years and is due to a significant rise in inflation over the last 12 months.

CPP benefits are adjusted once a year in January.

For 2023, the increase was calculated using the percentage change in average CPI between November 2021 to October 2022 and November 2020 to October 2021.

The average of 149.7 divided by 140.5 results in a rate increase of 6.5%.

What is the CPP Amount in February 2023?

Since the average CPI rate increase is up by 6.5%, the maximum monthly CPP payment in February 2023 increased to $1,306.57, compared to $1,203.75 in 2022.

Most seniors get less than the maximum CPP because how much you receive is determined by:

  • The age you start collecting your pension
  • How much you contributed, and for how long
  • Your average earnings while working

The average monthly CPP payment in 2023 is $717.15.

Related: CPP Payment Dates.

How Much Will OAS Increase in 2023?

OAS payments have increased by 0.3% for the January to March 2023 quarter. Unlike CPP, OAS benefits are adjusted for cost of living increases in January, April, July, and October (quarterly).

To calculate the current 2023 increase in OAS, CPI numbers for two periods of 3 months each are used.

For example, for the January to March 2023 quarter, the difference between the average CPI for August-October 2022 and May-July 2022 equals 0.3% ((153.0-152.6)/152.6)).

What is the OAS Amount in February 2023?

With CPI up by 0.3%, monthly OAS payments increased to a maximum of $687.56 (age 65-74) and $756.32 (age 75 and over), respectively, for January to March 2023.

The next adjustment is expected in April.

Other OAS benefits also increased in 2023, including the Guaranteed Income Supplement (GIS), the Allowance, and Allowance for the Survivor.

How much OAS you qualify for depends on how long you have lived in Canada after turning 18. There is also a cap imposed by your taxable income. Income above a threshold amount could result in OAS clawback.

OAS Increase for Seniors Over 75

Seniors aged 75 or older as of July 2022 saw an automatic 10% permanent increase in benefits. This increase continues in 2023.

The current monthly maximum OAS amount of $687.56 for those aged 65 to 74 is 10% less than the $756.32 maximum for seniors over 75.

Will OAS and CPP Increase Again in 2023?

We have already seen the only CPP increase that will occur in 2023.

While the average amount paid to new beneficiaries will fluctuate, the maximum CPP this year will remain at $1,306.57.

OAS benefits will likely increase during the following quarters:

  • April – June 2023
  • July – September 2023
  • October – December 2023

If the CPI indexing rate drops, monthly payments stay the same and do not decrease.

Other Ways to Increase CPP and OAS

You can increase CPP by collecting at a later age, up to age 70, for up to a 42% permanent increase.

This same strategy works for the OAS. Seniors can delay collecting OAS for up to 5 years for up to a 36% increase.

Frequently Asked Questions

Will seniors get a raise in 2023?

Yes, seniors will get a 6.5% increase in CPP payments and a 0.30% increase in OAS payments.

How long do you have to live in Canada to get OAS?

You must have lived in Canada as an adult to receive OAS. Maximum OAS benefit is paid to seniors who have lived in Canada for at least 40 years since the age of 18.

Can I collect OAS at age 60?

No, OAS benefits can only start when you turn 65.

What is the CPP indexing rate for 2023?

The CPP pension indexing rate in 2023 is 6.5%.

Is OAS indexed to inflation?

OAS is indexed to inflation every quarter in January, April, July and October.

What is the indexing rate for federal pensions in 2023?

The federal pension indexing rate in 2023 is 6.3%.

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Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

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2 thoughts on “How Much Will CPP and OAS Increase in 2023?”

  1. Gravatar for Rhoda Waddington

    not sufficient pension increase given the rate of inflation, especially in regard to food, heating, and increase in health coverage not covered by Provincial plans.

    I worked all my life, brought three children into the world, well-educated them, and they pay their fair share of income tax through their jobs.

    I never got a private pension because I chose to work for a non-profit organization at a time when there were no benefits attached, including health. I worked with vulnerable children and fought valiantly with all levels of government for any scraps of help for their families with all levels of government. RETROSPECTively, I wish I had taken my two degrees and obtained a job such as a Government job, with lots of benefits, long holidays, more respect, paid better all around, and with a healthy pension at the end.

  2. Gravatar for Russ Kelly

    That’s really too bad and I respect you for your career path and your giving heart. Yes, at times I too choose not to have a high paying govvernment job with so many holidays, vacation days, sick days, a crazy amount of paid personal days, a fully insane benefits plan including through the roof medical and dental coverage and top it all off with a more than generous pension.

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