A Reference Guide - Old Age Security and Canada Pension Plan

Canada Pension Plan

The Benefits

Retirement Pension

To qualify: Anyone who has made at least one valid contribution to the CPP is eligible to receive a monthly retirement pension. The pension may be received as early as the month following the contributor's 60^th birthday, provided an application is completed and the necessary documents are provided.

Early retirement: To receive a pension before the age of 65, the contributor must have stopped working or reduced his or her employment/self-employment income to less than the maximum monthly retirement pension payable at the age of 65. The income must be at this level for the month before the early retirement pension begins and for the month in which it starts. This requirement does not apply to people who begin their pension at 65 or later.

People receiving a CPP retirement pension can return to work, but can no longer contribute to the CPP.

Amount of benefit: People who start their pension at the age of 65 receive a monthly benefit equal to about 25 percent of their average monthly pensionable earnings during their contributory period.

The amount of a retirement pension beginning before the person's 65^th birthday is reduced by 0.5 percent for each month between the starting of the pension and the month of his or her 65^th birthday. Similarly, the amount of a retirement pension that starts between the ages of 65 and 70 is adjusted upwards by 0.5 percent for each month between the month after the 65^th birthday and the month for which the first payment is made. No adjustment is made after the 70^th birthday. Thus, the maximum adjustment that may be made, up or down, to the retirement pension is 30 percent.

People who apply for a retirement pension after the age of 65 may choose to receive the adjusted pension rate or take a retroactive payment of up to 12 months (or dating back to when they reached 65 years of age if that is less than 12 months).

Sharing of retirement pensions: Spouses in a continuing marriage and partners in a common-law relationship may apply to receive an equal share of the CPP retirement pension earned by both. This may be a tax advantage for them as a couple. Either one of the spouses or common-law partners can apply for this sharing of pensions, but both must be at least 60 years of age and have applied for their CPP retirement pensions.

Pages:  1 2 3 4 5 6 7 8 9 1011 12 13 14 15 16 17 18

Publications