CANADA PENSION PLAN

 REQUIREMENTS, BENEFITS, AND OPTIONS

 CONTRIBUTIONS

 

You make contributions only on your annual earnings between a minimum and a maximum amount (these are called your pensionable earnings). The minimum amount is frozen at $3,500. The maximum amount is set each January, based on increases in the average wage in Canada.

In 2019, the maximum amount is $57,400. The contribution rate on these pensionable earnings is 10.2 percent, split equally between you and your employer. If you are self-employed, you pay the full 10.2 percent. The maximum contribution for employers and employees in 2019 is $2,748.90 each.

If you are self-employed, the maximum contribution is $5,497.80. Your contributions are based on your net business income (after expenses).

BASIC BENEFITS

Upon reaching the age of 65, you automatically qualify for benefit and will be payable for life. The benefits are calculated based on your contributions over the years. You will qualify for the maximum available if you contributed the maximum every year.

EARLY RETIREMENT

You may collect CPP as early as 60. As a result of new rules beginning in 2011, your CPP is reduced by .6% for each month before the age of 65.

LATE RETIREMENT

You may also defer the receipt of CPP until the age of 70 if you continue to work and contribute. Your payments will be increased by .7% per month you defer payment after age 65.

SURVIVORS BENEFITS

Upon the death of a CPP annuitant, the surviving spouse or partner is entitled to a portion of the deceased pension. The amount is based on factors such as age and contributions, but is approximately 60% of the deceased pension. Children under18, under 25 and still in school or over eighteen, unmarried and disabled are also entitled to benefits.

DEATH BENEFITS

The estate of a deceased is entitled to a one-time lump sum benefit of no more than $2,500.

DISABLED INDIVIDUALS

Individuals with disabilities may be entitled to a disability pension if they are unable to find gainful employment. The pension converts to the regular pension at age 65.

CREDIT SPLITTING

If one spouse or partner is eligible for higher CPP benefits than the other, the higher benefits may be transferred to the lower beneficiary to a maximum of 50%.

For More Information please visit:

https://www.canada.ca/en/services/benefits/publicpensions/cpp.html