Human Resources and Social Development Canada has announced the latest benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS).

Canadians already receiving CPP benefits as of December 2006 will get an increase of 2.1% on Jan. 1, 2007. CPP benefits are adjusted once a year, in January. Increases are based on changes in the Consumer Price Index (CPI), the cost-of-living measure used by Statistics Canada, over a 12-month period.

OAS rates are based on the average CPI and are adjusted quarterly (in January, April, July and October). As of Jan. 1, 2007, the basic OAS pension, paid to people 65 years of age and over, will remain unchanged at $491.93 per month. There has been no increase over the previous quarter, although over the past year the OAS benefit rates have increased by 2.5% overall.

The Guaranteed Income Supplement (GIS), the Allowance and the Allowance for the survivor will increase by $18 a month for single recipients and by $29 a month for couples, effective Jan. 1, 2007. This is the second of two identical increases intended to help address the needs of Canada’s poorest seniors. The GIS and Allowance payments provide additional benefits to eligible low-income pensioners and their spouses or common-law partners as well as to eligible survivors.

The OAS program is funded through general tax revenues and provides a basic minimum income for Canadian seniors. Old Age Security provided 4.3 million seniors with approximately $29 billion in 2005-06.

The CPP (or the Quebec Pension Plan in Quebec) is funded through contributions by Canadian workers, their employers and the self-employed, as well as through earnings on investment of the plan’s funds. In addition to retirement benefits, the plan also provides disability benefits, death benefits, survivor benefits, and benefits for children.