The federal government is moving to ensure the roughly 40,000 Canadians missing out on Canada Pension Plan (CPP) payments receive their benefits automatically.

In Tuesday’s federal budget, the Liberals said they would amend legislation so that CPP contributors over the age of 70 are automatically enrolled. Currently, seniors have to apply to receive their pensions, and some are missing out because they apply late or not at all, according to the budget document.

With the change, the estimated 40,000 people missing out on CPP would begin to receive a monthly pension of $302 in 2020, the budget said. Another 1,500 people turning 70 that year would be automatically enrolled.

For those who don’t want to enrol in CPP, the government is proposing to extend the opt-out period from six months to a year.

The $9.6 million to pay for automatic enrolment would come from the CPP account.

Guaranteed income supplement

The government is also raising the guaranteed income supplement (GIS) ceiling from $3,500 to $5,000.

Working seniors can earn up to $3,500 per year in employment income without triggering a reduction in GIS, an amount that hasn’t changed since 2008.

“This does not reflect the reality of today’s labour market in which many seniors have self-employment income,” the budget says.

By 2020, the Liberals said they would increase the full exemption ceiling to $5,000 per year and introduce a partial exemption of 50% that applies to an additional $10,000 of employment income (beyond the initial $5,000).

The proposed changes will also make self-employment income eligible for the exemption.

The budget estimated the enhanced GIS would cost approximately $1.76 billion over four years.

The moves are among several measures aimed at retirees, including the introduction of deferred annuities.