CPP and OAS benefit rates for 2012

CPP benefits increase by 2.8 percent effective January 2012: Yearly Maximum Pensionable Earnings (YMPE) for 2012 set at $50,100

Ottawa (19 December 2011) – Last week Human Resources and Skills Development Canada announced the benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2012.

Canadians already receiving CPP benefits as of December 2011 will see their benefits increase by 2.8 percent on January 1, 2012.  CPP benefits are revised once a year, in January.  Increases are based on changes over a 12-month period (November 2010 to October 2011) in the Consumer Price Index, which is the cost-of-living measure used by Statistics Canada.

The maximum CPP retirement benefit for new beneficiaries will increase on January 1, 2012, from $960.00 to $986.67 per month. This is calculated based on the Average Yearly Maximum Pensionable Earnings (YMPE) for the past five years.

The YMPE for 2012 has been set at $50,100.

Old Age Security benefits, consisting of the basic pension, the Guaranteed Income Supplement (GIS) and the Allowances, are revised quarterly, in January, April, July and October, using the CPI for the previous quarter. On January 1, 2012, OAS benefits will increase by 0.4 percent from the last time the rates were adjusted, which was in October 2011. 

As of January 1, 2012, the maximum basic OAS pension, paid to people 65 years of age and over, will be at $540.12 per month. GIS and Allowances payments will also increase by 0.4 percent.

The annual CPP and OAS indexation rates differ slightly in percentage because they are calculated at different periods during the year.

The current CPP rates will be in effect until December 31, 2012; OAS rates will be adjusted, if required, as of April 1, 2012.

Both OAS and the CPP enhance the quality of life of Canadian seniors by providing a modest base upon which to build additional income for retirement.

The OAS program is funded through general tax revenues and provides a basic minimum income for Canadian seniors. 

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

Canada's public pensions are fully sustainable for generations to come. Canadians can count on their public pensions to be there for them in the future.

The 2012 maximum RRSP deduction limit will be 18 percent of earned income to a maximum of $22,970.


Maximum Old Age Security benefit rates as of Jan. 1, 2012 

Type of Benefit Maximum Monthly Rate  Jan – Mar 2012

Basic Old Age Security pension


Guaranteed Income Supplement


Spouse/Common-law partner of

  • a non-pensioner
  • a pensioner
  • an Allowance recipient



       $732.36          $485.61      $485.61

The Allowance

  • regular
  • survivor




     Maximum CPP benefit rates as of Jan. 1, 2012 

Type of CPP Benefit Maximum Rates for 2012
Retirement pension (at age 65) $986.67
Disability pension $1,185.50
Death benefit $2,500.00
Survivor's pension (under age 65) $543.82
Survivor's pension (age 65 & over) $592.00

Combined pensions:

Survivor/Retirement ( at age 65)





Disabled contributor's child benefits $224.62
Deceased contributor's child benefits $224.62
Yearly Maximum Pensionable Earnings (YMPE) $50,100.00
Year's Basic Exemption (YBE) $3,500.00
Employer / Employee CPP Contribution Rate 4.95% each - up to a maximum of $2,306.70 annually
Self-Employed CPP Contribution Rate

9.9% - up to a maximum of $4,613.40 annually


The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE