While we patiently wait for the federal government to sort itself out, we’ve pulled together some numbers and summaries for you from several reputable sources – the Government of Canada Public Pensions website, the National Seniors Strategy website, and the most recent Statistics Canada Income Survey (2022), and Made in CA. We encourage you to visit the actual official websites for more detailed and up to date information, as numbers are often adjusted for inflation and may be subject to change.
Yearly Income For Canadians Aged 65 or Over
The average monthly income for Canadians over 65 years of age is $1,883, which is $22,600 per year (December 2024). This figure is so low because around 2 million seniors in Canada are living on the Guaranteed Income Supplement from the government. According to Canada Without Poverty, 15% of elderly individuals are living in poverty in Canada. (source: MadeInCA December 2024)
The Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) programs are federally administered and publicly funded income supports for individuals 65 and older. These two programs complement the federally administered Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) towards which all working Canadians must contribute. While the maximum monthly CPP/QPP is $1175.83, the average monthly CPP payment is closer to $696.56 as of March 2020.[7] (See Table 4 below for average OAS, GIS, and CPP/QPP payouts in Canada, and updated numbers (2024) below that).
“… ***The average monthly CPP payment is closer to $696.56”
Table 4. Maximum Annual OAS, GIS, and CPP/QPP Payouts in Canada
INCOME SUPPORT VEHICLE
($)
OAS (Maximum Monthly Payment)*[8] If your income is higher than $90,997 (2024), you will have to repay part or your entire Old Age Security pension.
613.53 – this is maximum amount Updated amounts (see below): 65-74 income must be less than less than $148,451 = may receive up to $727.67 75+ income must be less than $154,196 = may receive up to $800.44
1175.83 ( REALITY: the average eligible benefit paid by C/QPP is about half the maximum“***The average monthly CPP payment in 2022 is closer to $696.56”)
*Regardless of marital status and based on an individual annual income of $125,696
**Amounts based on also receiving full OAS
NOTE: If your income is higher than $90,997 (2024), you will have to repay part or your entire Old Age Security pension.
For seniors aged 65 years and older, the poverty rate was 6.0% in 2022, compared with 5.6% in 2021.
For seniors aged 65 years and older, the poverty rate was 6.0% in 2022, compared with 5.6% in 2021 and the pre-pandemic level of 5.7% in 2019.
For unattached seniors, the poverty rate (13.8%) was more than four times the rate for people in senior families (3.3%) in 2022, though the poverty rate for unattached seniors was less than half of the poverty rate for unattached non-seniors (31.0%).
The median after-tax income of Canadian families and unattached individuals was $70,500 in 2022, a decrease from $73,000 in 2021 (-3.4%), adjusted for inflation. Despite market income remaining relatively stable, median government transfers declined in 2022, as benefits related to the COVID-19 pandemic were discontinued and pandemic-related modifications to the Employment Insurance (EI) program were removed during the year. The annual inflation rate in 2022 was 6.8%, which also contributed to the decline in income from the previous year. Dollar amounts in this analysis are expressed in constant 2022 values. Canada’s official poverty rate was 9.9% in 2022, increasing by 2.5 percentage points from 7.4% in 2021 and approaching the 2019 pre-pandemic rate of 10.3%.
Canadians not able to save enough for retirement.
Why?
According to the NATIONAL SENIORS STRATEGY, while OAS and GIS deliver an indexed maximum benefit of about $14,000 annually depending on marital status at the age of 65, and the CPP/QPP currently pay an indexed maximum benefit at age 65 of about $11,000, this does not mean Canadians can each count on getting a $25,000 indexed pension from government sources. This is due to the fact that the income-tested GIS benefit is quickly reduced by other income (including C/QPP) while the OAS benefit gradually reduces when retirement income exceeds a threshold of about $65,000. Furthermore, the average eligible benefit paid by C/QPP is about half the maximum. As a result, a typical retiree born in Canada with no other sources of income won’t receive $1,200 – $1,300 per month from government sources. For recent immigrants, this amount will be significantly lower for two reasons:
1) residency requirements to qualify for full OAS benefits; and 2) shorter or non-existent C/QPP contribution periods will also affect how much they will be eligible to receive.
According to OECD data, federal public supports, such as CPP/QPP, OAS and GIS, have come to account for 39% of gross income for older Canadians – compared to the OECD average of 59%; while their own capital resources and private pensions account for 42% of gross income – compared to the OECD average of 18%.10 Taken together, this data outlines that older Canadians are having to increasingly rely much more on their own capital resources and private pension schemes than ever before in comparison to most other OECD countries.
While there has always been a need for Canadians to accumulate private retirement savings, the last few decades of economic turmoil has meant a significant decline in the number of Canadians participating in private and workplace pension plans. Currently, 80% of Canada’s 3.2 million federal and provincial public sector workers participate in defined-benefit pension plans that typically provide targeted income replacement of 70% of final earnings integrated with Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) benefits after a 35-year career. For those within Canada’s private sector, however, less than 30% of employed workers have a pension plan. While increasingly, private-sector pension plans are moving towards defined-contribution plans, even private-sector defined-benefit plans typically offer less generous benefits than in the public sector, and typically have longer qualification periods for early-retirement benefits. Furthermore, if provided at all, indexing typically is ad hoc and occurs at rates below inflation.
The reality is that 11 million Canadians now do not have access to workplace pension plans and thus have no choice but to rely on available government administered income supports and their private savings.
While the use of private savings vehicles like Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs) have been promoted, many Canadians are still not able to take full advantage of them. Understanding the above in an economic climate where an estimated 2.8 million Canadians are currently unemployed or underemployed, compounded by the fact that most new job creation is less secure (i.e. part-time, temporary, or self-employment), means we are placing even more of our future older Canadians at risk of living below our established low-income cutoffs.
