The new benefit amounts for the Canada Pension Plan (CPP) and Old Age Security (OAS) have been announced.

According to Employment and Social Development Canada, effective January 1st, 2016, CPP benefits will increase by 1.2 per cent for those already receiving them. For 2016, the maximum CPP retirement benefit for new recipients age 65 and older will be $1,092.50 per month, an increase of $330 for the year compared to the 2015 maximum CPP retirement benefit.

The new CPP rates will be in effect until December 31st, 2016. CPP benefits are revised once a year, in January, based on changes over the 12-month period in the Consumer Price Index (CPI), which is the cost-of-living measure used by Statistics Canada.

OAS benefits, which consist of the basic OAS pension, the Guaranteed Income Supplement (GIS) and the Allowances, will increase by 0.1 per cent for the first quarter of 2016 (January to March). As of January 1st, 2016, the basic OAS pension will increase from $569.95 to $570.52 per month.

OAS benefits are also based on the CPI, but are reviewed quarterly (in January, April, July, and October) and revised as required to reflect increases in the cost of living as measured by the CPI. Although OAS and CPP benefits are not indexed at the same time, they are both adjusted with the cost of living over a given year.