If you’re a Canadian living in the U.S. or just trying to wrap your head around what 2025 has in store for Canada Pension Plan (CPP) and Old Age Security (OAS), you’re in the right place. In this guide, we’ll walk you through the latest changes in age requirements, payment adjustments, and eligibility rules — in a friendly, plain-speak way that even your 10-year-old niece could follow. Whether you’re near retirement or planning ahead, we’ve got you covered.
You might’ve heard your uncle or co-worker say, “Better grab that CPP while you can,” but hang tight — changes for 2025 make it more important to understand your options before you take the leap.
CPP and OAS 2025
| Topic | Details (2025) |
|---|---|
| OAS Age Eligibility | Gradually increasing from 65 to 67 by 2029 |
| OAS Monthly Amount (Age 65-74) | $734.95 |
| OAS Monthly Amount (Age 75+) | $808.45 |
| CPP Contribution Rate | 5.95% (employer + employee) |
| CPP Max Annual Earnings | ~$68,500 to $71,300 |
| OAS Clawback Starts | Income over $90,997 |
| Full CPP Retirement Age | 65 (reduced at 60, enhanced to 70) |
| Official Resources | canada.ca |
In 2025, CPP and OAS are getting a modern upgrade — more contributions, more payout, but also more fine print. Knowing the latest age requirements, clawback limits, and contribution rates is your best weapon to retire smart, not broke. Whether you’re planning for your golden years or already there, these changes are worth paying attention to. Plus, with tools like pension splitting, TFSAs, and the My Service Canada Account, you’ve got more ways than ever to make the most of what you’ve earned.
What’s New with CPP in 2025?
Let’s break it down like your favorite uncle at a BBQ. The Canada Pension Plan is basically the Canadian government’s way of making sure you get a paycheck even after you hang up your work boots. In 2025, the CPP Enhancement program reaches full implementation — a big deal if you’re counting on more money later.
CPP Contribution Rates & Max Earnings
- Contribution Rate: 5.95% for employees and employers (self-employed? You pay both!)
- Max Pensionable Earnings: ~$68,500 to $71,300
- That means more contributions, but also more benefits later.
CPP Payment Boost
The enhancement raises the CPP replacement rate from 25% to 33.33% of your pre-retirement income. Translation: if you made $60K a year, you’ll now get closer to $20K/year from CPP (instead of $15K).
“This isn’t just a tweak. It’s a full-on retirement upgrade,” says retirement planner Joe Fox.
CPP and Inflation Protection
CPP payments are indexed to inflation, meaning they grow along with the cost of living. The 2025 adjustment reflects a 4.4% CPI increase, helping seniors keep up with rising expenses.
OAS in 2025: Age Requirements & Payment Changes
The Old Age Security (OAS) is different from CPP. It’s not based on what you earned but how long you’ve lived in Canada. And guess what? The rules are shifting.
Age Eligibility
The federal government is phasing in an age hike:
- Born before 1958? You’re good at 65.
- Born after? You might be waiting until 66 or 67.
OAS Monthly Payments
- Ages 65-74: $734.95
- Ages 75+: $808.45
- Adjusted quarterly for inflation
The Clawback
If your net income is over $90,997, the government starts clawing back your OAS — 15 cents per dollar over the limit.
Example: If you made $100,000, you’d lose about $1,350 of your OAS.
OAS GIS Supplements
If you’re a low-income senior, don’t forget about the Guaranteed Income Supplement (GIS), which offers additional monthly payments. In 2025, singles can receive up to $1,072.14 per month (including base OAS).
Real-Life Examples
Case 1: Mike (Age 64, Still Working) Mike earns $72,000/year and plans to retire at 66. He continues contributing to CPP, and due to the enhancement, he’ll receive around $1,150/month instead of the older $900 range.
Case 2: Susan (Age 75, Retired) Susan’s OAS just bumped to $808.45/month. Since her total income is under $90K, she keeps every penny.
Case 3: James & Maria (Retired Couple, Modest Income) James and Maria both collect OAS and CPP. By using pension income splitting and pulling money from their TFSA instead of RRSPs, they avoided the OAS clawback and saved over $2,000 in taxes last year.
CPP vs. OAS at a Glance (2025)
| Feature | Canada Pension Plan (CPP) | Old Age Security (OAS) |
| Funding | Contributory (payroll deductions by employees/employers) | Non-contributory (general tax revenues) |
| Eligibility Basis | Work history and contributions | Canadian residency (after age 18) |
| Normal Start Age | 65 (can be taken as early as 60 or delayed until 70) | 65 (can be delayed until 70) |
| Income Tested? | No | Yes (subject to “clawback” if income exceeds a threshold) |
| Maximum Monthly (Age 65) | Approx. $1,433.00 (as of Jan 2025, for new benefits) | Approx. $734.95 (as of July 2025, for ages 65-74) |
| Inflation Adjustments | Annually (based on October CPI) | Quarterly (based on latest CPI) |
| Other Benefits | Disability, Survivor, Children’s | Guaranteed Income Supplement (GIS), Allowance, Survivor’s Allowance |
How to Maximize Your CPP & OAS
1. Delay If You Can
Delaying CPP to age 70 boosts your monthly check by 42%. OAS can also be delayed up to age 70 for a 36% increase.
2. Keep Income Below Clawback
Use Tax-Free Savings Accounts (TFSA) instead of RRSPs in retirement to avoid pushing your income over the clawback threshold.
3. Track Contributions
Sign up for My Service Canada Account to check your CPP contributions and estimate your pension.
4. Consider Pension Splitting
Married? Split your pension income to reduce taxes and clawbacks.
5. Use Government Tools
Try the Canadian Retirement Income Calculator to estimate your total retirement income.
FAQs
Q: Can I get CPP and OAS at the same time?
Yep, you can receive both simultaneously once eligible.
Q: What if I live outside Canada?
You can still get OAS if you lived in Canada for 10+ years after age 18. 20 years if you’re applying from abroad.
Q: Is CPP taxable?
Yes, CPP and OAS are taxable, so plan your withdrawals smartly.
Q: Can I still work and get CPP?
Yes! But if you’re under 70, you may still need to contribute. It can increase your future payments (called Post-Retirement Benefit).
Q: What happens to CPP/OAS if I die?
CPP offers a survivor’s pension and death benefit. OAS stops upon death but surviving spouses may qualify for Allowance for the Survivor.
