The 2025 pension changes could impact your retirement plans in a big way. Let me show you how to navigate CPP, OAS, and GIS updates to maximize every dollar and save on taxes.
1. Payment Dates for CPP, OAS, and GIS in 2025
Let’s start with something simple but important: when you’ll actually get your money. The Government of Canada has set a unified payment schedule for CPP, OAS, and GIS in 2025. Here’s the schedule:
- January: January 29, 2025
- February: February 26, 2025
- March: March 27, 2025
- April: April 28, 2025
- May: May 28, 2025
- June: June 26, 2025
- July: July 29, 2025
- August: August 27, 2025
- September: September 25, 2025
- October: October 29, 2025
- November: November 26, 2025
- December: December 22, 2025
These dates are usually in the last week of the month. If a payment date falls on a weekend or holiday, you’ll get your money a bit earlier.
Pro tip: For added convenience, set up direct deposit through your My Service Canada Account. Not only does it make sure your money lands in your account on time, but it’s also a safer and more reliable option than waiting for a mailed cheque.
2. Canada Pension Plan (CPP) Updates for 2025
Here are the key updates for 2025:
1. Cost of Living Adjustment (COLA)
CPP payments increase annually to match inflation. For 2025, the adjustment is 2.6%.
Example:
- Monthly CPP in 2024: $1,000
- 2025 increase (2.6%): +$26
- New monthly payment: $1,026
This helps retirees maintain their purchasing power as costs rise, though it’s a pretty measly increase this year, unfortunately.
2. Two-Tier CPP System (CPP Enhancement)
A reminder that higher earners will now have to contribute more. Here’s how that works:
- Base CPP: Applies to earnings up to $71,300 (YMPE).
- Employee rate: 5.95%
- Employer match: 5.95%
- Self-employed: 11.90%
- Enhanced CPP (CPP2): Applies to earnings between $71,300 and $81,200.
- Employee rate: 4.00%
- Employer match: 4.00%
- Self-employed: 8.00%
Contributions are capped at $4,429.10 for incomes over $81,200.
Examples of Contributions
Income | Base CPP Contribution | CPP2 Contribution | Total |
$40,000 | $2,171.75 | $0.00 | $2,171.75 |
$60,000 | $3,363.75 | $0.00 | $3,363.75 |
$80,000 | $4,033.10 | $348.00 | $4,381.10 |
$100,000 | $4,033.10 | $396.00 | $4,429.10 |
Why This Matters
This new system helps higher earners save more for retirement, with CPP replacing up to 33.33% of lifetime earnings (up from 25%).
Think of it like upgrading to a premium subscription: you contribute more now but will enjoy better payouts later on.
I go over the CPP enhancements in way more detail in this other CPP Enhancement video of mine, so check that out.
3. Old Age Security (OAS) Updates for 2025
Here’s what’s new for 2025:
Cost of Living Adjustment (COLA):
OAS payments are reviewed every quarter to keep up with inflation. For the January to March 2025 period, there won’t be an increase, as the CPI showed a small dip over the last three months. But don’t worry—over the past year, benefits have still grown by 2.0%, helping seniors keep pace with rising living costs.
OAS Clawback Threshold Updates:
The OAS pension recovery tax, commonly known as the “clawback,” requires higher-income seniors to repay a portion or all of their OAS benefits if their net income surpasses a specified threshold. For the period from July 2024 to June 2025, this threshold is set at $90,997. Seniors with net income exceeding this amount are required to repay 15% of the excess.
Example: If your net income is $100,000, the repayment would be 15% of the difference ($100,000 – $90,997), which equals approximately $1,350.
To minimize the impact of the clawback, strategies such as income splitting or using your Tax-Free Savings Account (TFSAs) can help keep your net income below the threshold.
Increased OAS Pension at Age 75:
Seniors aged 75 and older receive a 10% increase in their OAS payments, a measure introduced in July 2022 to address the financial challenges faced by older seniors.
For the January to March 2025 quarter:
- Ages 65–74: Maximum monthly payment is $727.67.
- Ages 75+: Maximum monthly payment increases to $800.44.
Government of Canada
4. Guaranteed Income Supplement (GIS) Updates for 2025
The Guaranteed Income Supplement (GIS) offers financial assistance to low-income seniors in Canada. Updates for 2025 include:
Keeping Up with the Cost of Living
GIS payments also adjust every quarter to match changes in the cost of living. For January to March 2025, the maximum monthly GIS payment for a single senior stays at $1,086.88, as there wasn’t a CPI increase over the last three months. But here’s some good news: GIS benefits have grown 2.0% over the past year, from January 2024 to January 2025, helping seniors keep pace with rising costs.
Updated Income Thresholds
Whether you qualify for GIS depends on your income. For the first quarter of 2025, the annual income limit for a single person is $22,056. These thresholds adjust regularly to reflect inflation and shifts in the cost of living.
Retirement planning is about making the most of every opportunity. From CPP to OAS and GIS, staying informed can make a huge difference in your financial future. Download our free guide on saving taxes in retirement and explore our financial planning services to create a plan tailored just for you. Don’t forget to like and subscribe for more expert tips to help you thrive!