Will seniors get a raise in 2023 in Canada?

Many seniors in Canada rely on government assistance in their retirement and old age. These funds help seniors pay for their cost of living expenditures. But in the last few years, inflation has wreaked havoc on the wallets of Canadians of all ages. However, seniors are often hit harder since they don’t always have a way to bring in more money like their youthful counterparts. So, the question becomes, will seniors get a raise in 2023 in Canada? By the end of this article, you’ll understand where you can expect a raise in your government benefits. Continue reading to learn more!

Will seniors get a raise in 2023 in Canada

What are the 2023 senior benefits in Canada?

Provincial and territorial governments have benefit programs for seniors. These programs are aimed at helping senior citizens live a decent life in their old age. There are federal programs that also help these senior citizens to retire comfortably. Top of the list is the Old Age Security (OAS), Canada Pension Plan (CPP), and the Guaranteed Income Supplement (GIS). The CPP, OAS, and GIS are three retirement schemes initiated to take care of the aging populations in Canada.

To answer the question, will seniors get a raise in 2023 in Canada? we need to understand how these programs work. Let’s take a closer look below.

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Old Age Security (OAS)

The Old Age Security program started in 1927 as a monthly payout to residents who are 65 and older. All qualified seniors are entitled to this benefit. That is, whether they are born Canadians or legal residents. 

The entry barrier to this program is low, as an applicant does not need an employment history to qualify. The sole requirement is that the person must have stayed in Canada for over 10 years since turning 18. 

This length of years helps to determine how much dollars a person will get from this benefit scheme. For a person to get the maximum allowed under the OAS program, they must be a resident in Canada for at least 40 years.

Related Reading: How to Calculate OAS in Canada

Guaranteed Income Supplement (GIS)

The Guaranteed Income Supplement is an addition to the OAS program. It was created to provide supplementary income to low-earning seniors. Thus, to qualify for this program, a recipient must already be an OAS beneficiary. 

As for additional criteria, the person’s income must fall into the recognized low-income category. Although, the situation is different when the applicant is married or has a common-law partner. In those cases, both incomes will be combined to determine if the couple qualifies for the GIS benefit. Recipients do not have to worry about paying taxes on these benefits. This is because GIS benefits are not taxable.

GIS Allowance

This allowance falls under GIS, and it applies to persons aged between 60 to 64. To qualify, the person must be the spouse or common-law partner of a person already receiving GIS. But to receive this allowance, interested persons must apply to Service Canada. They must also file their income taxes yearly to determine eligibility.

GIS Allowance for the Survivor

When a GIS recipient dies, the government does not abandon their spouse or common law partner. Instead, the surviving partner receives an allowance. To qualify for this allowance, the applicant must meet the age requirements of 60 to 64. Then, they must be low-income earners living in Canada. Like the other allowance package, interested persons must apply to Service Canada. Then, they must file yearly income taxes as well.

Canada Pension Plan (CPP)

The Canada Pension Plan was launched in 1966 as a contribution program for working Canadians. Its mechanism is simple. First, the government sets annual contribution rates. Then, working Canadians make contributions to this scheme to cash out upon retirement.

Eligible applicants can start receiving CPP payments once they turn 60. However, the amount of the monthly payment goes up the longer you wait to collect CPP. Age 65 is the sweet spot to start claiming payments, but you’ll receive the highest amount if you wait until age 70.

To qualify, an applicant must have made one contribution during their employment. The number of years of this contribution affects how much CPP payments a person will receive. Naturally, the more you contribute, the more you will receive from CPP in your later years.

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Related Reading: Best Pension Plans in Canada

What are the increases for seniors in 2023?

As we saw above, Canada has several public pension programs in place to meet the needs of seniors. But as times change, these sums, which are usually fixed, are rather insufficient to meet all their needs. As a result, the government makes room for increments where necessary. Below, we consider some projections for 2023:

How much will CPP increase in 2023? 

CPP is expected to increase by 6.5% based on the indexation rate as of January 2023. Indexation refers to certain adjustments to cover inflation and heightened costs of living.

How much will Canada’s Old Age pension increase in 2023?

OAS payments are adjusted four times a year, at every quarter, to match inflation rates. That is, in January, April, July, and December. To calculate these adjustments, the government relies on the Consumer Price Index (CPI). 

From November 2022 to now, the CPI has risen almost 7%, and the OAS payments are expected to toe this line. However, the exact amount of the increase for OAS will not be finalized until July.

Related Reading: How much will CPP and OAS increase in 2023?

How much will GIS increase in 2023?

The first thing to note about GIS increments is that it is reliant on the Consumer Price Index (CPI). Generally, monthly payments do not go down when the cost of living goes down, but they go up when the indices do. 

Presently, we only have figures for April to June 2023 to work with. A single, widowed, or divorced person will get a maximum of $1,032.10 per month. To be eligible, you must earn less than $20,952 per year. The GIS payment only went up a bit since the previous quarter. Unfortunately, this indicates Canadian seniors can’t expect a significant increase in their GIS payment for 2023.

Will seniors get a raise in 2023 in Canada?

Back to the big question: will seniors get a raise in 2023 in Canada? Here’s what we know. CPP is expected to make an estimated 6.5% increase in payments, based on available figures. Then, the OAS payments are expected to slightly increase in the coming quarter, given that the inflation rate has so far jumped by 0.7%. Finally, GIS beneficiaries will likely earn around the same figures in 2023, as official data does not suggest any increments at the moment.

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Read More: Old Age Security Increase in 2023: What You Need to Know

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