Working and aged 60 and over
If you work while receiving your Canada Pension Plan (CPP) retirement pension, you may increase your retirement income with a lifetime benefit. This is called the Post-Retirement Benefit (PRB). You might be eligible if you are:
- 60 to 70 years of age
- working and contributing to the CPP
- receiving a retirement pension from the CPP or the Quebec Pension Plan (QPP)
To get this benefit, you and your employer have to make CPP contributions toward the PRB. If you are self-employed, you have to pay both the employee and the employer portions of the CPP contributions.
Once you reach 70, you will stop making CPP contributions toward the PRB.
Note: Working in Quebec
If you work in Quebec after you started receiving your CPP retirement pension, you could receive a retirement pension supplement from the QPP.
60 to 65 years of age and working
CPP contributions toward the PRB are mandatory for working CPP retirement pension recipients under age 65.
65 to 70 years of age and working
Starting at age 65, you can choose not to contribute to the CPP.
To stop contributing, you must fill out form CPT30 Election to stop contributing to the Canada Pension Plan, or revocation of a prior election. Give a copy of the form to your employer, and send the original to the Canada Revenue Agency (CRA).
If you have more than one employer, you must give a copy of the form to each of your employers. You cannot choose to contribute toward a PRB with one employer and not contribute with another.
If you are self-employed, you must complete the applicable section of the CRA's Schedule 8 CPP contributions on Self-Employment and Other Earnings and file it with your Income Tax and Benefit Return.
You can start contributing once again but only one change can be made per calendar year. Submit section D of a new CRA form CPT30 Election to stop contributing to the Canada Pension Plan, or revocation of a prior election. Give a copy of the form to your employer, and send the original to CRA. If you are self-employed, contact CRA.
Do I need to apply?
No, you don't have to apply to receive your PRB. If you are eligible, it will be paid to you automatically, unless additional information is needed.
For each year that you make a valid contribution to the CPP while receiving your retirement pension, you become eligible for a PRB the following January.
How much can I get?
Like the CPP retirement pension, the amount of each PRB will depend on how much you earn, the amount of CPP contributions you made during the previous year, and your age as of the start date of the PRB.
You can get an estimate of your PRB amount by using the Canadian Retirement Income Calculator (CRIC). The CRIC can also give you an idea of your other retirement income, including CPP and OAS benefit estimates.
The maximum PRB for one year is equal to 1/40th of the maximum CPP retirement pension. If you contribute less than the maximum, the amount of the year's PRB will be proportional to your contributions. For example, if you contributed half of the maximum contribution level, you will receive 50 percent of the maximum PRB.
Note: Working the same year you start receiving your CPP retirement pension
If you work in the same year that your retirement pension begins, we will determine which portion of that year's contributions will go toward the retirement pension and which portion, if any, will go toward the PRB.
When will I receive my first payment?
If you made contributions toward the PRB, it will be paid to you automatically the year after your contributions, effective January 1st of every year.
Since we need employer contribution information from the CRA, the first payment will usually be issued in early April and will include a lump sum payment back to January.
The PRB is paid monthly. Each year that a new PRB is generated, the amount will be added to your CPP retirement pension and issued as a single payment.
Note: Separate PRB and QPP payments
If you are receiving a retirement pension from the QPP and are eligible for a PRB from the CPP, your PRB payment will be paid separately.
Will this affect my other benefits?
Each new PRB will be added to any previously earned PRB and to any other CPP benefits to which you are entitled.
The PRB will allow you to continue to build your CPP retirement income, even if you are already receiving the maximum amount from your pension.
Since the PRB will increase your retirement income, it may have an impact on your eligibility or benefit amounts from the Old Age Security pension, the Guaranteed Income Supplement, or other provincial or territorial programs.
What are my contributions to CPP?
Contributions toward the PRB are made at the same rates as all CPP contributions:
- Employees contribute 4.95% of their pensionable earnings
- Employers contribute 4.95% of the employee's pensionable earnings
- Self-employed workers contribute both portions for a total of 9.9% of their net pensionable income.
Jane is a CPP retirement pension recipient who, in 2013, is 65 years of age. She will receive gross earnings of $57,000 annually until she reaches age 70. Below, you will find a table outlining how much she would contribute to the PRB if she continues making voluntary contributions until age 70 and what her PRB payments would be each year Footnote 1.
|Date||Age||Contribution to the PRB|
Jane would receive a new PRB following each year of contributions. Each year, her new PRB would be added to the previous PRBs she had collected. If she passes away at age 87, between the ages of 66 and 87, she would collect a total of $40,493.61 in PRB payments.
Note: Amounts in this table
CPP benefits are revised each year, in January, to reflect changes to the cost of living. Note, however, that the payment amounts shown below are not indexed.
|Age||New PRB Payment||Total annual PRB
|Accumulated PRB Payments|
Note: PRB amount
The maximum PRB for a single year is equal to 1/40th of the maximum CPP retirement pension. If you contribute less than the maximum, the amount of the year's PRB will be proportional to your contribution. For example, contributing half of the maximum will generate 50 percent of the maximum PRB.
- Footnote 1
This calculation is made based on the assumption that the annual Yearly Maximum Pensionable Earnings (the maximum amount of earnings used to calculate contributions to the CPP) will grow by 2 percent for the next four years.
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