Big Changes in Old Age Pensions Coming for 2024

As a response to our rising inflation, the Canadian federal government has increased the CPP (Canada Pension Plan) and OAS (Old Age Security) payouts, and Yearly Maximum Pensionable Earnings (YMPE) contributions.

This video gives a nice overview of the increased contributions.

Two-Tiered Yearly Maximum Pensionable Earnings Contributions

The YMPE will now be two-tiered, according to canpension.ca: 

“Starting in 2024:

Earnings from $68,500 to $73,200 will face a new 4% employee and 4% employer additional contribution [r]esulting in combined CPP contributions on around $5,000 more per individual”

They go on to say this increase in CPP payments for workers making more than $68,500 should increase monthly CPP payments:

“By 2030, the CPP enhancement is projected to increase maximum monthly benefits by about $275 compared to 2019 levels. This will significantly boost future retirees’ CPP income.” 

CPP Payment Increase

Pension payments are also set to increase. Again, per canpension.ca:

“After a record inflation adjustment for 2022, CPP payments will likely rise again in 2024 thanks to indexing.

For 2023, the CPP pension increased by 10.2% based on high inflation in late 2021 through 2022. Other factors boosting the 2024 bump will be:

• Ongoing CPP enhancement gradually raising benefits

• Higher YMPE increasing payments for max contributors

• Continued indexing to protect against current inflation

All Canadians who receive CPP retirement benefits will see an upward adjustment in 2024.”

OAS Clawback Limit Also Increased

There are Old Age Security (OAS) clawback in place to have high income seniors repay all or part of their OAS benefits; this clawback has also increased. Again, per canpension.ca:

“The OAS clawback…works on a sliding scale:

Starting in July 2024, the OAS clawback thresholds will increase to:

No clawback on incomes below $93,208 (up from $86,912)

Full clawback above $134,748 (up from $129,758)” 

Shaw & Associates would love to be your go-to resource for all things related to taxes and retirement income—don’t wait until you’re almost ready to retire to start planning for it!

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.