CPP Basic Info Flashcards
Who administers CPP?
ESDC and CRA
ESDC - Employment and Social Development Canada - maintains the records associated with member contributions and administers the benefit aspects of the CPP
CRA - Canada Revenue Agency - responsible for collecting premiums and making rulings regarding contribution requirements
What are the benefits of the CPP?
Retirement benefits
Survivor benefits
Disability benefits
Death benefits
Who is exempt from contributing to CPP?
1) Workers earning less than $3500
2) Casual workers - babysitters
3) Migratory workers who work fewer than 25 days a year or earn less than $250 from any one employer
4) Members of religious orders, whose income is turned over to the order
What is the year’s basic exemption?
The minimum below which no contributions are required on earnings. Amount is $3500
What is the year’s maximum pensionable earnings?
The maximum level above which no contributions are required. Amount - $61,600
What are pensionable earnings?
The difference between the year’s basic exemption (YBE) of $3500 and the year’s maximum pensionable earnings (YMPE) of $61,600.
Numbers are as of 2021.
What is the early pension reduction per month?
0.6% per month and 7.2% per year.
Maximum of 36% for a person who begins collecting at age 60
What is the late pension augmentation rate?
0.7% per month and 8.4% per year. Maximum of 42% at age 70
What is the requirement for CPP pension sharing?
Both spouses or common law partners have to be at least 60 years old and must be receiving CPP retirement benefits
Can a spouse who has never contributed to CPP before share CPP pension with another spouse who has contributed to the plan?
Yes. This is the only time that sharing of only the working spouse’s pension is permitted.
What are the requirements for CPP pension sharing?
- Both spouses have to be at least age 60 and over.
- Both spouses must be receiving CPP retirement benefits
Either spouse may make the application for the assignment but both spouse’s pensions have to be assigned.
When does CPP contributions begin?
The later of:
When an individual reaches age 18
Or January 1, 1966 when CPP started
When does CPP contributory period end?
Earlier of:
Age 70
Up to and including the month in which an individual who is 65 or older stops contributing.
Death
