As 2024 approaches, Canadians receiving the Old Age Security (OAS) pension can look forward to an increase in their payments. The federal government adjusts OAS payments quarterly to keep pace with inflation, ensuring that seniors maintain their purchasing power as the cost of living rises. In this article, we’ll provide detailed information on the OAS increase for 2024, what factors influence these adjustments, and how much seniors can expect to receive.
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How Much Will OAS Increase in 2024?
The OAS payment is adjusted quarterly based on the Consumer Price Index (CPI), a measure of inflation that tracks the cost of goods and services in Canada. The most significant increases tend to occur at the beginning of each year, reflecting inflation trends from the previous year.
In 2023, OAS payments saw a significant increase due to elevated inflation levels, with the July 2023 increase being 0.9% for the third quarter. While the exact 2024 OAS increase won’t be confirmed until the end of the year, experts estimate that seniors could see an increase in the range of 1.5% to 3% in 2024, depending on inflation.
For example:
- If the OAS pension is currently $615.37 per month for seniors aged 65 to 74, a 2% increase would raise it to approximately $627.67 per month.
- For those 75 and older, who currently receive $679.16 per month, a 2% increase would raise the payment to $692.74.
Breakdown of OAS Payment Amounts for 2024
Here’s a look at the potential OAS payment amounts for 2024, assuming an estimated 2% increase:
- OAS Pension (Aged 65 to 74):
- Current (2023): $615.37 per month
- Estimated (2024): $627.67 per month
- OAS Pension (Aged 75 and Older):
- Current (2023): $679.16 per month
- Estimated (2024): $692.74 per month
What Influences OAS Increases?
OAS increases are determined by changes in the Consumer Price Index (CPI). The CPI measures inflation, which reflects the rising costs of goods and services. As inflation rises, the OAS payments are adjusted to ensure that seniors can continue to afford necessities without their purchasing power being eroded by higher prices.
These increases occur automatically, and seniors don’t need to apply for them. The adjustments are made every quarter (January, April, July, and October), but the most noticeable changes usually occur at the beginning of the year.
Eligibility for OAS Payments in 2024
To be eligible for Old Age Security in 2024, individuals must meet the following criteria:
- Age: You must be 65 years of age or older.
- Residency: You must have lived in Canada for at least 10 years after turning 18 to qualify for partial OAS. To receive the full OAS pension, you need to have lived in Canada for at least 40 years after the age of 18.
- Citizenship: You must be a Canadian citizen or legal resident at the time your OAS application is approved.
Even if you live outside of Canada, you can still receive OAS as long as you meet the residency requirements.
How to Maximize Your OAS Payments
While OAS payments are based on residency and inflation adjustments, there are several strategies to ensure you’re maximizing your pension:
- Delay Receiving OAS: By delaying your OAS payments past the age of 65, you can increase your monthly benefits. For every month you delay receiving OAS (up to age 70), your payment increases by 0.6%. This means if you delay for the full five years, your OAS payments will be 36% higher.
- Ensure Maximum Residency: The longer you have lived in Canada, the closer you will be to receiving the full OAS pension amount. If you fall short of the 40-year residency requirement, your payments will be proportionately reduced.
- Consider the Guaranteed Income Supplement (GIS): If you have a low income and receive OAS, you may also be eligible for the Guaranteed Income Supplement (GIS), which provides additional monthly benefits. The GIS amount is determined by your income level, and it increases as your income decreases.
Key OAS Payment Dates for 2024
Seniors receiving OAS can expect payments on the following dates in 2024:
- October 29, 2024
- November 28, 2024
- December 27, 2024
Additional Support for Seniors: GIS and Allowance Programs
In addition to OAS, low-income seniors may also qualify for the Guaranteed Income Supplement (GIS) and the Allowance program. The GIS is a non-taxable benefit for low-income seniors, while the Allowance is designed to support seniors aged 60 to 64 who are married to or living with an OAS pensioner.
The GIS and Allowance payments are also adjusted quarterly to reflect inflation, ensuring that seniors with limited income are not adversely affected by rising living costs.
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The OAS increase for 2024 will provide essential financial relief to Canadian seniors, ensuring that their pensions keep pace with the rising cost of living. With expected increases between 1.5% and 3%, seniors can look forward to higher monthly payments starting in January 2024.
By understanding how the adjustments work and exploring strategies to maximize their OAS benefits, Canadian seniors can secure greater financial stability in retirement. Stay informed about quarterly OAS increases and ensure you meet the residency requirements to get the full benefit of this important program.