OLD AGE SECURITY BENEFIT RATES TO INCREASE ON OCTOBER 1, 2005

Ottawa, September 29, 2005 — Social Development Canada today announced that Old Age Security (OAS) benefit rates will increase as of October 1, 2005. Increases in OAS rates are based on changes in the average Consumer Price Index (CPI).

As of October 1, 2005, the basic OAS pension, paid to people 65 years of age and over, will be $479.83 per month. This is an increase of 0.6 percent over the previous quarter. Since 1973, all OAS benefits have been adjusted quarterly (in January, April, July and October).

The maximum Guaranteed Income Supplement (GIS) and Allowance payments, which provide additional benefits to eligible low-income pensioners and their spouses or common-law partners, as well as to eligible survivors, will also increase by 0.6 percent.

In addition to the quarterly increase, the GIS, the Allowance and the Allowance for the survivor will also increase by a total of 7 percent over two years, beginning in 2006. These benefits will be increased by $18 a month for single recipients and by $29 a month for couples, effective January 1, 2006. They will increase by the same amount again on January 1, 2007. Funding for this initiative was provided for in the February 2005 federal budget and is therefore built into the existing fiscal framework.

The OAS program is funded through general tax revenues and provides a basic minimum income for Canadian seniors. It is the most widely accessible source of income for older Canadians, providing 4.2 million seniors with approximately $28 billion in 2004-2005.

The Canada Pension Plan (or the Quebec Pension Plan in Quebec), is funded through contributions by Canadian workers, employers and the self employed, as well as through earnings on investment of the Plan’s funds. The Canada Pension Plan also provides disability benefits, death benefits, survivor benefits, and benefits for children.

Together, the CPP and the OAS program enhance the quality of life of Canada’s seniors by providing a modest income base on which to build for retirement.

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Media Relations
(613) 941-1110

Website: www.sdc.gc.ca

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BACKGROUNDER

Maximum Old Age Security benefit rates as of October 1, 2005