When do CPP and OAS pension payment increases happen around your birthday?

Happy 75th birthday, Luis. I will explain why your Old Age Security (OAS) pension did not increase despite your birthday and what you can expect to happen next.

OAS increase at age 75

In July 2022, there was a change made to OAS so that pensioners 75 and older receive a 10% increase in their pension payments.

The reason your pension did not change, Luis, is because the first increased payment occurs the month after you turn 75. So, you can expect to see an increase in your June payment.

The increase is automatic, so you do not need to worry about applying. It is not a one-time increase, either. It is a permanent 10% increase in your payments.

The maximum monthly OAS payment for the second quarter of 2025 for Canadians aged 75 and older is $800.44 for those who began their pension at age 65. To receive the maximum, your net world income for the 2023 tax year must have been less than $148,179.

Applying for CPP and OAS

When you first apply to begin your OAS or your Canada Pension Plan (CPP) payments, Service Canada provides guidelines for processing the application.

If you apply online, it generally takes less than two weeks. You can apply by registering for or signing into your My Service Canada Account.

If you mail in a paper OAS application or a paper CPP application, it can take up to four months to process.

When does OAS start?

An OAS pension can begin for Canadians as early as age 65. A CPP pension can begin as early as age 60.

If you apply to begin your pension at the earliest possible opportunity, your OAS will begin the month after you turn 65. Your CPP will begin the month after you turn 60. (See CPP payment dates and OAS payment dates for the year.)

There may be advantages to delaying the start of your pensions that you should consider. (Read: “Delaying CPP and OAS to age 70: Is it worth the wait?”)

Retroactive OAS payments

If you apply for OAS after age 65 or CPP after age 60, you can ask Service Canada to back-date your pension start date.

In both cases, you can receive up to 11 months of retroactive payments from the date your application was received by Service Canada. The payments will be made as a lump sum, and your payment amount will be calculated based on the retroactive start date.

In the case of CPP, you cannot receive retroactive payments that begin earlier than the month following your 65th birthday.

Keep in mind that deferring these pensions results in fewer total months of payments in the future, but higher monthly pension payments. If you live a long life, you could receive more total dollars paid by waiting. Both pensions are increased for every month you defer them up until age 70.

Is OAS indexed to inflation?

OAS and CPP are both subject to inflation adjustments. These increases are calculated based on Statistics Canada’s Consumer Price Index (CPI) All-Items Index.

OAS is adjusted quarterly in January, April, July and October. CPP is adjusted annually in January.

OAS was not increased from January 2025 to April 2025 because the CPI did not increase.

The last CPP adjustment was an increase of 2.6% from December 2024 to January 2025.

It bears mentioning that payments will not decrease if the cost of living goes down.

OAS clawback

If your net income when you file your tax return is high, you might have a clawback of your OAS. This is called the OAS pension recovery tax.

The minimum OAS recovery threshold is $93,454 based on your 2025 income. It can be as high as $157,490 for those aged 75 and older who delayed their pension to age 70.

This adjustment is applied from July to June based on your tax return for the previous year, which is typically filed in April.

The pension recovery tax is re-evaluated annually, and any tax withheld from your OAS pension is claimed on your tax return for that year to reduce tax otherwise payable on your income.

CPP post-retirement benefit

If you apply to begin your CPP and you continue working, as long as you are under the age of 70, your pension will be increased. Your ongoing CPP contributions will lead to a CPP post-retirement benefit (PRB) that increases your pension.

You do not need to apply to be eligible for the PRB. If you are a CPP recipient and continue making CPP contributions, your pension will be adjusted the following January.

Your automatic 10% OAS increase

Your question, Luis had a simple answer: 75-year-olds can expect their OAS to increase by 10% the month following their 75th birthday. It seemed worth noting the other important nuances about OAS and CPP pension payments and adjustments and when they occur, as well, so thanks for the inspiration!

Read more from Ask a Planner:

How your net income gets calculated for tax and OAS What retirees need to know about tax brackets for 2025 When and how should I start drawing on my retirement savings? How to plan for taxes in retirement in Canada How much income can I earn while getting OAS?

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