Govt sponsored Retirement Income Programs

Question 1

What is the percentage a self-employed person must contribute to the CPP

Answer 1

10.2%

Question 2

Formula for CPP Contributions

Answer 2

YMPE or lesser amount - YBE 3,500

Question 3

Eligibility for CPP

Answer 3

At least one valid contribution
Minimum age 60
Worked in Canada

Question 4

CPP is adjusted for inflation yearly or quarterly ?

Answer 4

Yearly

Question 5

Calculate for the CPP maximum benefit

Answer 5

TOTAL - YMPE per year in the last 5 yrs before 66
DIVIDE BY 5 (to get average)

Question 6

Steps to calculate for CPP inflation adjustment

Answer 6

1. Average the last 5 yr YMPE
2. Divide INDV PENSIONABLE EARNINGS by the YMPE OF THE SAME YR of the Pensionable Earnings
3. MULTIPLY result with ympe average

Question 7

Steps in calculating for CPP reduction at age 60 with monthly reduction of 0.6%

Answer 7

100% - (65-60) x12) x0.60%

Question 8

Steps in calculating a late take up of CPP age 70

Answer 8

100% + (70-65) x12) x 0.70%

Question 9

Requirements for pension sharing

Answer 9

Both individuals at least 60 yrs old and are together.

Question 10

What portion of a couple’s pension sharing will it be based on? Calculation factor.

Answer 10

The length of time they are together and contribution period

Question 11

4 steps to calculate cpp pension splitting

Answer 11

1. Divide # yrs married with # yrs contribution = percentage
2. Each person monthly pension x that %, then deduct the resulting amount to the original monthly pension. You will have 2 amounts - assignable (result or x) and non assignable (result of subtraction)
   3 combine assignable amounts for each person then divide equally. This will be their base split
   4 base split plus the non assignable (for each person)

Question 12

What are the 3 CPP Survivor Benefits

Answer 12

Death Benefit, Survivor’s Pension, Orphan’s Benefit

Question 13

How much CPP Death Benefit?

Answer 13

It is 6 months worth of the calculated retirement pension (as if the person turned 65) up to a max of 2500

Question 14

Definition of Disability to receive a Disability Pension

Answer 14

A prolonged and severe medical impairment of a physical or mental nature that renders the person medically unable to pursue a substantial gainful employment

Question 15

What is the calculation for Tax CREDIT on Employee contributions for businesses owners

Answer 15

Employee contribution amount x (federal + provincial conversion rates)

Question 16

What is the formula for a business owner to claim for the employer portion of the CPP contribution?

Answer 16

MTR% x $amount of employer contribution portion

Question 17

CPP SURVIVOR’S PENSION ENTITLEMENT AGE BRACKET

Answer 17

60 and over receives 60% of deceased contributor’s retirement pension to the yearly max

45-64 flat rate component per month + 37.5% of the deceased contributor’s retirement pension to a yrly max

Under 45 same as 45-64 but reduced by 1/20th per month of age under 45

No pension until age 65 if survivor is 35 no kids, not disabled

Question 18

Old Age Pension Benefits

Answer 18

Flat rate, adjusted quarterly based on CPI
Non contributory
Funded by Consolidated Revenue Fund of the Federal Government

Question 19

Between what ages can you defer receiving the OAS BENEFIT

Answer 19

Voluntary deferral is available between age 65-70

Question 20

By how much does the OAS increase per month of deferral

Answer 20

0.6% or 7.2% for 12 months of deferral

Question 21

After receiving OAS will it continue if you decide to leave Canada?

Answer 21

Yes if you satisfied the 20 year residency requirement.
If not, OAS BENEFIT is suspended and will resume once you return to Canada

Question 22

How to determine the OLd Age recovery tax

Answer 22

Income - the year’s threshold x 15%

Question 23

Is the OAS clawback threshold indexed annually or quarterly?

Answer 23

Annually