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Actsci > Mod 2 set 3- OAS, GIS, CPP > Flashcards

Mod 2 set 3- OAS, GIS, CPP Flashcards

1
Q

What does OAS stand for?

What type of social security plan is it?

A

Old Age Security

Universal social security plan

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2
Q

what does the OAS do

A

it provides a flat benefit for people over age 65 if a certain residency requirement is met

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3
Q

when does the OAS benefit start, what are the gains from deferring it?

A

it starts at age 65

- u can defer it up until age 70 to receive 0.6% more monthly

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4
Q

is oas paid in addition to the cpp? is it indexed?

A

yes its paid in addition to cpp

yes its indexed quarterly with the CPI

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5
Q

If a person is late to applying for the OAS, what happens?

A

they can make up for 12 months of missed months

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6
Q

how do you qualify for the OAS?

A

must apply and meet the residency requirements, showing proof of age

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7
Q

what requirement does the new “post-1977” rule have? How are the benefits calculated with this new rule?

A
  • need 40 years in canada after age 18 (but a proportionate benefit is available to those who have 10-40 years, #of years in canada/40)
  • if they didnt live in canada the year prior to 65, then they need at least 20 years in canada to qualify for the proportionate benefits
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8
Q

what age did you have to be on july 1st 1977 to qualify for the new rules

A

25

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9
Q

Explain the portability of OAS

A

Canada has portability connections with some countries so that payments of OAS do not stop when people emigrate/immigrate.
if you move to these countries after 65, the OAS payments will not stop

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10
Q

what if the country you move to is not in a reciprocal agreement with canada?

A

the payments will stop after 6 months of being in that country and resumed when the pensioner moves back to canada
BUT if the pensioner lived in canada for more than 20 years, the payments won’t stop

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11
Q

does the OAS have clawbacks? when was it introduced?

A

yes, although its a universal benefit.

clawbacks were introduced in 1989

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12
Q

how do the clawbacks work?

A

1) if net income is less than or equal to the threshold amount, the full OAS is received
2) if more is earned than the threshold, then the benefit is reduced to 15% of the amount that the income is above the threshold.
- ex// 0.15(92,140 - 75,910) = 2,434.50
2434.50 /12 = 202.875
586.66 - 202.875=383.785
So net OAS monthly benefit is $383.78

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13
Q

is OAS considered to be taxable income?

A

yes

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14
Q

how is the OAS funded? how is the OAS going to be affected in the near future?

A

its funded by a pay-as-you-go basis from general tax revenues
because the boomer population is aging, they are going to increase the OAS cost significantly

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15
Q

what does GIS stand for

A

guaranteed income supplement

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16
Q

what do the GIS and Spousal allowance have in common?

A

the both are income tested, designed for pensioners and surviving spouses that have a low annual income

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17
Q

what is the eligibility for GIS?

A

Individual needs to be receiving OAS and meet a needs test

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18
Q

what are the 3 needs tests for GIS?

A
  • single, widowed, divorced or separated
  • married but partner is not eligible for OAS or allowance
  • married but partner receives OAS
19
Q

is the GIS indexed?
is it a continuous benefit?
are the benefits taxed ?
how is it financed?

A

indexed quarterly

  • have to re-apply every year
  • the benefits are not taxed
  • its financed out of general tax revenues
20
Q

Spousal allowance is designed for who ?

is it income tested?

A
  • designed for surviving people that only live off of one OAS.
    yes it is income tested
21
Q

how can one be eligible for Allowance?

A
  • must be entitled for/receiving OAS
  • age 60-64
  • have lived in canada 10 years after age 18
22
Q

Are the Allowance payments indexed?

A

indexed quarterly to the CPI

23
Q

when do the Allowance benefits stop?

A

benefits stop at age 65 (when the individual is eligible for OAS)
the person re-marries (survivor)
separates (if spousal allowance)
they die

24
Q

what are the clawbacks for people who are single, widowed, divorced or remarried? (GIS)

A
  • deduction of $1 for every $2 of monthly income earned over and above the OAS
25
Q

what are the clawbacks for people who are married with their spouse not eligible for OAS ? (GIS)

A

The max payment is reduced by $1 for every $4 of combined income between the two over and above OAS

26
Q

what are the clawbacks for people who are married with both partners are pensioners? (GIS)

A

the max is reduced by $1 for every $4 of combined income over OAS

27
Q

how do you calculate the GIS for any individual (their situation doesn’t matter)

A
  1. calculate the OAS benefit received
  2. calculate their total income - OAS
  3. (if they have a spouse) add this number to their spouses income
  4. either divide that number by 4 or 2 - this is the deduction amount.
  5. subtract the deduction amount from the max benefit given
28
Q

Is the CPP compulsory?

how are the benefits funded? are they indexed? taxed?

A
  • yes its compulsory for all employed and self employed people
  • contributions are funded by the ee and er
    they are earnings related
  • indexed
  • they are taxed
29
Q

what type of benefits does the CPP provide?

A
  • disability benefits
  • retirement benefits
  • survivor
30
Q

what percentage of income does the CPP want to replace, along with OAS?

A

40% – 25% CPP and 15% OAS

31
Q

What do YBE & YMPE stand for?

A

YPE: years basic exemption
YMPE: years max pensionable earnings

32
Q

how are the contributions split between the ee and er for CPP

A

as of now, the contribution amount is 4.95% for both the ee and er (9.9% for self employed)

33
Q

what is the contributory period for the CPP?

A

age 18 until the earliest of (death, start of CPP, age 70)

34
Q

what are contributions based off of? how are these contributions made? (CPP)

A

they are based on earned income in excess of the YBE

they are deducted from pay

35
Q

what is the eligibility for the CPP RPB?

applying, NRA, deferring the benefit

A
  • must apply
  • nra is 65 but can opt to take the benefit earlier/ later
    (for earlier: deduction of 0.6% monthly
    for later: add 0.7% monthly)
36
Q

what is the eligibility for CPP disability benefits?

when can you start reciving?

A

unable to engage in substantially gainful employment

  • must have made cpp contributions in the last 3 out of 6 yrs
  • payable until cpp rpb starts (37)
  • or no longer disabled
  • 4th month after being disabled
37
Q

what is the drop out period for? how is it calculated?

A
  • for years looking after kids under 7, 17% of lowest earnings, any month eligible for CPP disability pension, periods after 65 still contributing to CPP
  • # of years you get to drop is calculated by 17% of the contributory period
  • if contributed 18-65, can drop 8 years
38
Q

what are the disability benefits ppl can receive? who receives them

A

either the disabled contributor:
flate rate + 75% of cpp rpb max (this is calculated as if they are receiving the cpprpb

or the dependent (payments stop at age 18or 25 if in school)
flat rate monthly amount (same as if their parent passed)

39
Q 
what are the cpp survivor benefits? 
explain each: 
1. lump sum 
2. dependents survivor pension
3. spousal survivor pension
A
  1. lump sum death benefit
    - 6x(cpp rpb) monthly payment
  2. dependents survivor pension
    - flat rate
  3. spousal survivor pension
    - if the survivor is 65+ = 0.6x cpp pension
    - if the survivor is 45-64 (or with child/ disabled) flat rate + 0.375xcpprpb contributions
    - if the survivor is 35-44 then pension is reduced by 1/120 for each month less than age 45
40
Q

How long is GIS including spousal allowance payable outside canada

A

6 months

41
Q

What is CPP Survivor benefits eligibility requirements?

A
  • must have made cpp contributions for no less than 1/3rd of total # calendar years
  • or contributions made for at least 10 years
42
Q

List and explain General CPP Provisions

A 
Benefit Indexing 
-before retirement indexing is based on YMPE
-after retirement based on CPI
Income Tax
-CPP provisions are "taxable income"
-ER contributions are tax deductable
43
Q

2 Major Changes made in 1998 to CPP

A

Contribution rate raised to 9.9%

Moved to 5 year YMPE average as opposed to 3%

44
Q

2 June 2016 expansion announcements for CPP

-need to cover more ppl, less workers receiving other pension (DB)

A
  • increase max RPB to equal 35% OF 5 yr YMPE

- increase contribution rates to 11.9%

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