Canada Pension Plan
CPP Retirement Benefit
An important point about CPP is that you must apply for it. Application forms are available from the Service Canada website (www.Service Canada.gc.ca or the HRSDC website (www.hrsdc.gc.ca)
Although the standard age for CPP pension benefits is 65, you can start collecting CPP when you are 60 years old, and you can defer it until age 70.
If you start before age 65 you will get a permanent discount based on how early you start collecting. Conversely, if you defer the CPP until after you are 65, you will get a permanent premium based on how long you defer it.
Beginning in 2012, contributors were able to receive their CPP pensions without a work interruption. This will make it easier for Canadians to transition into retirement. Also in 2012 new premium and discount rates started to be phased in.
The amount of your CPP pension is based on the level of your contributions throughout your working life. A key point for women is that periods of time taken out of work for child rearing may be backed out of the calculation. Taking the child rearing period into consideration will often significantly increase the level of pension for mothers who took years out of their career to raise children.
Post-Retirement Benefit
Contributors from age 60 to 69 receiving CPP or QPP pensions who choose to work, are able to continue to make contributions that will increase their benefits by way of the new Post-Retirement Benefit (PRB), which is paid in addition to the basic CPP or QPP pension. If they are not yet 65 years old, they must make contributions, as do their employers. From age 65 to 70, contributions are voluntary. However the employer will have to contribute if the employee does. The self-employed pay both portions. Contributions made while beneficiaries are receiving their CPP or QPP pensions increase only the PRB, which is separate from the other benefits, and cannot be split between spouses or common law partners. Each year these contributions create a new PRB, which starts being paid the following year and continues indefinitely.
CPP Disability Benefit
The disability benefit is available to CPP contributors who are under 65 and have become unable to work because of a severe and prolonged disability. Eligibility also depends on a minimum amount of CPP contributions. The contributors dependent children may also receive benefits.
The disability has to be both severe and prolonged. For CPP purposes, severe means that a person is incapable of regularly pursuing any substantially gainful occupation; and prolonged means that the disability will prevent the individual from going back to work in the next 12 months, or is likely to result in death. Please note that eligibility for disability benefits under other government programs, or insurance policies, does not necessarily qualify you for a CPP disability benefit.
Disability benefits will stop when you are able to work at any job on a regular basis, turn 65, or you die.
Dependent children may be eligible if you are receiving a CPP disability benefit and they are either under 18, or between 18 and 25 and attending school on a full-time basis. When a CPP disability benefit stops for any reason, any related children's benefits also cease.
CPP Survivor's Pension
The Canada Pension Plan (CPP) Survivor's Pension provides a monthly pension to the surviving spouse, common-law partner or children of a deceased contributor.
Quebec Pension Plan (QPP)
The Province of Quebec operates a pension plan which is similar to the Canada Pension Plan for people who work or have worked in the Province of Quebec.
Canada Pension Plan.
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An important point about CPP is that you must apply for it. Application forms are available from the Service Canada website (www.Service Canada.gc.ca or the HRSDC website (www.hrsdc.gc.ca)
Although the standard age for CPP pension benefits is 65, you can start collecting CPP when you are 60 years old, and you can defer it until age 70.
If you start before age 65 you will get a permanent discount based on how early you start collecting. Conversely, if you defer the CPP until after you are 65, you will get a permanent premium based on how long you defer it.
Beginning in 2012, contributors were able to receive their CPP pensions without a work interruption. This will make it easier for Canadians to transition into retirement. Also in 2012 new premium and discount rates started to be phased in.
The amount of your CPP pension is based on the level of your contributions throughout your working life. A key point for women is that periods of time taken out of work for child rearing may be backed out of the calculation. Taking the child rearing period into consideration will often significantly increase the level of pension for mothers who took years out of their career to raise children.
Post-Retirement Benefit
Contributors from age 60 to 69 receiving CPP or QPP pensions who choose to work, are able to continue to make contributions that will increase their benefits by way of the new Post-Retirement Benefit (PRB), which is paid in addition to the basic CPP or QPP pension. If they are not yet 65 years old, they must make contributions, as do their employers. From age 65 to 70, contributions are voluntary. However the employer will have to contribute if the employee does. The self-employed pay both portions. Contributions made while beneficiaries are receiving their CPP or QPP pensions increase only the PRB, which is separate from the other benefits, and cannot be split between spouses or common law partners. Each year these contributions create a new PRB, which starts being paid the following year and continues indefinitely.
CPP Disability Benefit
The disability benefit is available to CPP contributors who are under 65 and have become unable to work because of a severe and prolonged disability. Eligibility also depends on a minimum amount of CPP contributions. The contributors dependent children may also receive benefits.
The disability has to be both severe and prolonged. For CPP purposes, severe means that a person is incapable of regularly pursuing any substantially gainful occupation; and prolonged means that the disability will prevent the individual from going back to work in the next 12 months, or is likely to result in death. Please note that eligibility for disability benefits under other government programs, or insurance policies, does not necessarily qualify you for a CPP disability benefit.
Disability benefits will stop when you are able to work at any job on a regular basis, turn 65, or you die.
Dependent children may be eligible if you are receiving a CPP disability benefit and they are either under 18, or between 18 and 25 and attending school on a full-time basis. When a CPP disability benefit stops for any reason, any related children's benefits also cease.
CPP Survivor's Pension
The Canada Pension Plan (CPP) Survivor's Pension provides a monthly pension to the surviving spouse, common-law partner or children of a deceased contributor.
Quebec Pension Plan (QPP)
The Province of Quebec operates a pension plan which is similar to the Canada Pension Plan for people who work or have worked in the Province of Quebec.
Canada Pension Plan.
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