Canada Pension Plan - what you need to know
- What happens to my pension if I get divorced or separated?
- Does staying home with my children for a few years affect my pension?
- I am a CPP contributor. How do I qualify for Disability Benefit?
- How could Survivor Benefits help my family?
- How will my future CPP retirement pension be calculated?
- How will my age affect my retirement pension?
What happens to my pension if I get divorced or separated?
If you become divorced or separated from your spouse or common-law partner, you can apply to have your respective CPP credits split between the two of you. This is called "credit splitting".
Under "credit splitting," your respective CPP contributions while you were married or living together are combined and divided equally between you. If you were divorced or separated from more than one common-law partner during your life, you can apply for a credit split for each period of cohabitation.
Credit splitting can affect the amount of any future CPP benefits for both you and your former spouse or common-law partner.
Consult Credit Splitting for more details on who is eligible and how to apply.
Does staying home with my children for a few years affect my pension?
No, it doesn't as long as you apply for the Child Rearing Drop Out provision when you apply for a CPP benefit. This provision is only used if it will increase your benefit.
When you do not have income or have a lower income for a period of time, that means you make fewer or no contributions to CPP. If the reason you are not making an income or are making a lower income from work is to stay home with your children under the age of seven, then you can apply to CPP to have these periods excluded from the calculation of your pension. This will ensure the missing contributions do not affect your pension.
I am a CPP contributor. How do I qualify for Disability Benefit?
Disability Benefits are available to you as long as you:
- have been a CPP contributor for four of the last six years and have earned above a minimum level;
- are ill or disabled due to a severe and prolonged mental or physical condition;
- are under the age of 65;
- are unable to work at any job on a regular basis because of your condition.
It does not matter what causes the disability. CPP would pay you a monthly benefit for as long as you are ill and unable to return to work. Your condition must be considered "severe" and "prolonged" by your doctor.
You may also receive benefits for your dependant children if they are under age 18. If they are between 18 and 25, and are attending school or university on a full-time basis, they may also receive the benefit.
For more information call 1 877 454-4051.
If you are hearing or speech impaired, and use a telecommunications device for the deaf (TDD), please call 1 800 255-4786.
How could Survivor Benefits help my family?
When a CPP contributor dies, CPP pays three kinds of Survivor Benefits:
- The death benefit - a one time lump-sum payment;
- The survivor's benefit - a monthly benefit for your spouse or common-law partner;
- The childrens' benefit - a monthly payment for your dependent children.
To qualify for any or all of these benefits, you must have contributed to the CPP for a minimum number of years. Your spouse or common-law partner and children must also meet certain conditions.
How will my future CPP retirement pension be calculated?
The amount of your future retirement pension will be based on your pensionable earnings and contributions to the CPP from the time you were 18 or from January 1966, whichever is later, up until you begin receiving your retirement benefits. The maximum CPP retirement pension for 2002 is $788.75 per month.
If you would like an estimate of what your retirement pension will be when you retire, you can complete an Estimate Request for a Canada Pension Plan Retirement Pension.
How will my age affect my retirement pension?
Your pension would normally start the month after your 65th birthday. However, you can start your CPP retirement pension as early as age 60.
The amount of your pension will depend on how much and for how long you have contributed to the Plan and on when you want your pension to start. Your pension will be smaller, at the most by 30%, if you take it before age 65 and larger if you take it after, up to a maximum of an additional 30% at age 70.
Taking your pension before age 65
If you take your CPP retirement pension before you are 65, it is reduced by 0.5% for each month that you are under 65 years old. For example, if you want your pension to begin the month after your 60th birthday, your retirement pension will be reduced by 30% (0.5% x 60 months).
To get your retirement pension before age 65, you must have stopped working or at least reduced your earnings from work before your pension begins. Once you begin to receive your pension, you can return to any amount of paid work without affecting the payment. However, at that point, you would not be able to contribute to the CPP on any future earnings. For more information, visit Canada Pension Plan Retirement pension.
Taking your pension after age 65
Your CPP retirement pension is increased by 0.5% for each month after your 65th birthday you delay taking the pension. The maximum increase is 30%. For example, if you want your pension to begin the month after your 67th birthday, your retirement pension would be increased by 12% (0.5% x 24 months).