Canada Pension Plan Payment to Rise in 2024: How Much is the Increase?

Updated on February 23, 2024

The Canada Pension Plan (CPP) plays a crucial role in providing retirement income for seniors in Canada. In 2019, the CPP underwent changes aimed at ensuring higher benefits and increased financial stability for Canadians. By slightly raising CPP contributions, these enhancements are designed to secure a better future for retirees. In this article, we’ll delve into the details of the CPP Payment Increase in 2024, exploring the extent of the increase and its impact on Canadians. Stay tuned for valuable insights and updates.

In 2024, the CPP enhancement will bring about additional maximum pensionable earnings and a higher earnings cap. The new maximum pensionable earnings will be 7% less than this elevated cap, providing an example where, if the previous limit was CAD 69,000, the new maximum in 2024 would be CAD 73,830.

CPP Payment Boost in 2024

In Canada, the Canada Pension Plan (CPP) serves as a monthly financial support system, offering disability benefits and retirement pensions. Qualified individuals and retirees receive taxable income on the Canada Pension Payment Date 2023. To find out when your CPP is due, visit www.canada.ca, the official website of the Government of Canada.

The Canada Pension Plan 2023 Payment Date was set for October 27, 2023, with the preceding payment made in September 2023. It’s crucial to understand the benefits and requirements for each category. As part of this plan, Canadians make a small contribution to the CPP, matched by the government in their CPP Account.

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CPP 2023 Payment Date in Canada

Plan Name Canada Pension Plan (CPP)
Started by Government of Canada
Authority Name Employment and Social Development Canada
Purpose of CPP Pension money
Beneficiaries for CPP seniors in Canada
Eligibility for CPP Must have made one contribution towards CPP
Payment Frequency Monthly
Category Finance News
Canada Pension Payment Date 2023 27 October 2023
Payment Mode Direct Bank Transfer
Canada Pension Payment Amount CAD 600 to CAD 1150
Official Website canada.ca

2024 CPP Payment Increase: What to Expect?

In 2024, the CPP enhancement introduces a higher earnings cap, termed the additional maximum pensionable earnings. This cap sees a 7% increase from the previous year’s limit. Notably, employers are mandated to submit both the original and enhanced CPP contributions to the Canada Revenue Agency (CRA), resulting in increased costs for employers despite the same procedural requirements.

CPP Payment Dates 2023 in Canada

Month Date
CPP for October 2023 27 October 2023
CPP for November 2023 28 November 2023
CPP for December 20233 20 December 2023

Enhanced Benefits for Canada Pension Plan in 2023

Since 2019, the Employment and Social Development Canada has raised Canada CPP Payments, primarily benefiting those who started contributing to CPP in that year. Current employees contribute slightly more, aiming for future benefits and improved financial stability for Canadians. The 2019 enhancement introduces two components: one lasting from 2019 to 2023 and the other from 2024 to 2025. These adjustments aim to provide Canadians with enhanced financial assistance.

CPP Payment Limit

CPP Retirement Pension: Maximum of CAD 1,306.57 CPP Post-Retirement Benefit: Maximum of CAD 40.25 CPP Disability Benefit: Maximum of CAD 1,538.67 Post-Retirement Disability Benefit under CPP: Maximum of CAD 558.74 Children of Disabled Canada Pension Plan Contributors: Maximum of CAD 281.72 Children of Deceased Canada Pension Plan Contributors: Maximum of CAD 281.72 Death Benefit (One-Time): CAD 2,500

Impact of CPP Increases on Employees

The second phase of the Canada CPP Payment enhancement is set to kick in either in 2024 or 2025, so stay tuned for updates by reading my blog regularly. According to the CRA’s determined maximum amount of pensionable earnings, eligible individuals will continue making a 5.95% CPP contribution. However, if their annual income exceeds the maximum for phase one, they become eligible for Phase 2 CPP with higher maximum pensionable earnings.

For those whose income surpasses the phase one maximum and aligns with the phase two limit, their employer will deduct a 4% CPP contribution. Below, I’ve provided an estimated increase in CPP contributions for the years 2024 and 2025 – take a look for more details.

Year Original MPE Employee CPP Contribution (5.95%) Phase 2 MPE Enhanced Earnings – Phase 2 Phase 2 CPP Contribution (4%) Total CPP Contribution
2023 CAD 66,600 CAD 3,962.70 not available not available not available CAD 3,962.70
2024* CAD 69,200 CAD 4,117.40 CAD 73,830 CAD 4,630 CAD 185.20 CAD 4,302.60

 

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