CPP/OAS Gov Plans Flashcards
How much does someone have to contribute to CPP (ee)
5.95%
What does disability periods mean?
Disability periods are removed from calculation. Can drop out or in
What are child rearing years?
Can opt out of time you took with child under 7. Can opt in or out
What is the general drop out?
Lowest 17%. Or if 65, lowest 8 years
What’s the penalty for taking CPP at 60?
Reduction of 0.6% per month
What’s the benefit of delaying CPP?
Increase of 0.7% per month
What’s the PRB?
When you take CPP at 60 but Keep working. You must pay into it until 65. This creates a a new benefit each year
What constitutes CPP disability?
- becomes disabled with severe and prolonged disability
- must have paid into CPP 4/6 years
- higher than regular CPP
- can’t be receiving both
- flat rate of 510 then 75% of regular CPP
What is the survivor benefit for someone 65+ and collecting their own cpp?
Their own CPP+60% of up to max (deceased benefit at 65)
What is the survivor benefit of someone 65+ and not collecting CPP?
60% of deceased
What is the survivor benefit of someone age 60-65 and collecting their own CPP?
Flat amount + 37.5% up to max (when contributor started taking it)
What is the survivor benefit of someone under 60 or 60-65 and not collecting CPP?
Flat amount + 37.5%
What is the survivor benefit for a disabled spouse of a deceased CPP contributor?
Flat amount + 37.5% + their own CPP-D up to max
What is the CPP death benefit?
2.500
What period does pension splitting apply ?
Time together
Can CPP credits be split above YMPE?
No
Who is eligible for OAS?
Resident of Canada
Min 10 years of residency
At least 65
When does someone lose their GIS with eligible income?
Single person about 19,500
Couple about 26,000
What is a strategy to not lose GIS?
Take more RRIF out (up to lowest bracket) and move excess to TFSA/non reg to bring income down annually
What income claws back GIS?
Investment income
RRIF/LIF/RRSP
Pension income
CPP
How do you calculate PRB?
CPP monthly benefit x 2.5%
This gives you the lifetime monthly benefit for PRB indexed to inflation
How do you calculate Max CPP benefit?
Average of last 5 years x 25%
Current year and last 4 years
When would one get full OAS?
40 years of residency
How is OAS reduced if you don’t have the full 40 years of residency?
2.5% for every year less than 40
What’s the benefit of waiting to take OAS?
Monthly benefit of 0.6%
Does OAS provide survivor, disability if child benefits? Or income splitting?
No
What is the OAS clawback rate?
15% 0.15 on every dollar earned above about 80k
Fully clawed back at about 130k
Can someone receive OAS benefits if they live in a different country?
Yes, unless they have less than 20 years of Canadian residency which they can only collect 6 months worth
What are the GIS clawback amounts?
- 5 clawback for single person
- 25 for couple
Per dollar of non Exempt income (after first 5k and OAS annual amount )
At what age can one apply for the allowance?
Between 60-65 and not receiving any other benefits
Who is eligible for the allowance?
Spouse must be eligible for GIS
How are GIS and Allowance taxed?
They are Tax free, unlike OAS
How are CPP contributions taxed and how are CPP benefits taxed?
For employee - contributions create tax credit
For employer - tax deduction
Benefits are taxable income
At what amount is the allowance fully clawed back?
About 34k
What is the EI benefit?
55% of earned income to a max of 595 per week.
Are EI benefits taxable?
Yes and taxes are withheld
What’s the max EI premiums?
1.58 per 100 to a max of 56,300
Max contributions 889
What are the options for employers regarding EI?
They can opt in or out.
Can only receive maternity, compassionate care, sickness
How is workers comp taxed?
Tax free
How is the child Canada benefit taxed?
Tax free
Can you split CPP?
No, but you can pension share starting at age 60 which is almost the same thing. It’s pro rated on contribution history
