In 2024, Canadians can expect significant changes to the Canada Pension Plan (CPP) and Old Age Security (OAS). These changes will affect how much people contribute and receive. Let’s explore the details.
Today, Saturday, 24th February 2024, brings important news about the CPP and OAS increase. The Canada Revenue Agency (CRA) has announced new rates and amounts for these crucial pension plans.
Summary of CPP And OAS Increase 2024 Canada
Aspect | Details |
---|---|
CPP Maximum Earnings Increase | From 66,600 dollars (2023) to 68,500 dollars in 2024 |
OAS Clawback Limit Increase | From 86,912 dollars to 90,997 dollars in 2024 |
Age Requirement for OAS | 65 or older |
Current Maximum OAS Payment | 707.68 dollars (age 65-74) and 778.45 dollars (age 75 or older) |
CPP Contribution Rate (2024) | Remains at 5.95% for employees and employers |
CPP 2 Contribution Rate (2024) | 4% for employees and employers |
Key Changes in CPP
The maximum pensionable earnings under CPP will rise to 68,500 dollars in 2024. This is an increase from the 2023 limit of 66,600 dollars. However, the basic exemption limit will stay at 3,500 dollars.
A second earnings ceiling, set at 73,200 dollars, will be used for CPP 2 contributions. This means earnings between 68,500 dollars and 73,200 dollars will be subject to these new contributions. The CPP contribution rate remains at 5.95%, but the maximum contribution limit increases to 3,867.50 dollars.
OAS Updates
For Old Age Security, the maximum payment is currently 707.68 dollars for ages 65 to 74 and 778.45 dollars for those 75 or older. In 2024, the OAS clawback limit will increase from 86,912 dollars to 90,997 dollars.
OAS payments are reviewed four times a year to match the cost of living changes. People over 75 receive an automatic 10% increase since July 2022.
Impact of These Changes
These updates will impact both current and future retirees in Canada. Higher CPP contributions could mean larger future benefits. OAS adjustments help seniors keep up with the cost of living.
These changes are part of ongoing efforts to enhance retirement security for Canadians. They reflect the government’s commitment to ensuring pensions remain relevant and sufficient.
Frequently Asked Questions
What are the new maximum pensionable earnings under CPP for 2024?
The new maximum pensionable earnings under CPP for 2024 will be 68,500 dollars.
How much will the OAS clawback limit increase in 2024?
The OAS clawback limit will increase to 90,997 dollars in 2024.
What is the age requirement for Old Age Security in Canada?
The age requirement for Old Age Security in Canada is 65 or older.
Will the CPP contribution rate change in 2024?
No, the CPP contribution rate will remain at 5.95% in 2024.
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