Canadian Pension PlanJoin now to read essay Canadian Pension Plan1. What benefits does the Canada Pension Plan provide?The Canada Pension Plan is a contributory, earnings-related social insurance program. It ensures a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability and death.
There are three kinds of Canada Pension Plan benefits:* disability benefits (which include benefits for disabled contributors and benefits for their dependent children);* retirement pension; and* survivor benefits (which include the death benefit, the survivors pension and the childrens benefit).The Canada Pension Plan operates throughout Canada, although the province of Quebec has its own similar program, the Quebec Pension Plan. The Canada Pension Plan and the Quebec Pension Plan work together to ensure that all contributors are protected.
2. Who pays into the Canada Pension Plan?With very few exceptions, every person in Canada over the age of 18 who earns a salary must pay into the Canada Pension Plan. You and your employer each pay half of the contributions. If you are self-employed, you pay both portions.
You do not make contributions if you are receiving a Canada Pension Plan disability or retirement pension. At age 70, you stop contributing even if you have not stopped working.
3. How much do I pay into the Canada Pension Plan?The amount you pay is based on your salary. If you are self-employed, it is based on your net business income (after expenses). You do not contribute on any other source of income, such as investment earnings.
If, during a year, you contributed too much or earned less than a set minimum amount, you will receive a refund of contributions when you complete your income tax return.
You only pay contributions on your annual earnings between the minimum and a set maximum level (these are called your “pensionable” earnings).The minimum level is frozen at $3,500. The maximum level is adjusted each January, based on increases in the average wage.For more information, go to Canada Pension Plan Contribution Rates4. Why are my contributions important?Your contributions are used to determine if you or your family are eligible for a benefit, and to calculate the monthly amount. Both the length of time and the amount of earnings on which you contribute (up to the maximum each year) are factors. Normally, the more you earn and contribute to the Canada Pension Plan over the years, the higher the benefit will be (when you become entitled) because you will have built up a lot of Canada Pension Plan pension credits. Your Canada Pension Plan credits can also be affected by “credit splitting”.
You will also get a new pension. The money earned from an adjustment to your account size will gradually be removed after five years from that year. If you are a parent or caregiver, all contributions will go back to the parents and their children.The contribution adjustments will not be as generous as if you and the Canadian parent and child combined made up 25% of your total household income. The benefit will be made to your spouse/partner in equal proportion as in the income-based rate in this table. You can always take part by making an investment in Canada Pension Plan benefits that have been fully indexed for inflation and with an interest rate equal to the dollar amount of the adjustment you plan to contribute. Please note that Canada Pension Plan contributions in 2016 will be paid with the same rates in most other years. However, Canada Pension Plan contributions in 2017 and 2018 will be paid with different rates in some cases, even though the rate is indexed on the current rate of inflation. If you have more than one family member whose contributions are going to be paid with the same rates, you will still need to meet the same thresholds for each family member and that, in turn, may create an undue hardship on your family members’ pension plan benefits and affect your pension’s payout distribution.
If your contributions are not going to contribute to one or more RRSPs, the Canadian Family Assistance Plan cannot be used. However, your Canadian Family Assistance Plan can be used for various kinds of pension plan contributions. This page demonstrates how to apply the Canada Family Assistance Plan with the Canadian Family Insurance Plan when you are a spouse or a parent or caregiver.​
If you are a Canadian citizen, the Canada Family Insurance Plan will not be available for you since the benefits are held by the Citizenship and Immigration System. However, you can use the Canadian Citizens’ RRSP in some countries where family members (generally those with children or grandchildren) do not qualify for Social Security and can benefit from the CPP. For that purpose, you will be entitled to live on your spouse or parent’s plan benefits. For more information on the Canada Family Insurance Plan, go to: Canada Family Insurance Plans – A Complete Guide to the Benefits of the Canada Family Insurance Plan[/p][p>Citizens Insurance Statistics (CISR), available from the official website at www.cisr.gc.ca.
It’s important for you to take account of the CPP, your family and the value it will bring to the economy. The CPP is an amount that is paid to a family member in an RRSP. It does not take into account the total payments by family members to their family. The CPP payment process has been updated to reflect changes across the whole family. It is important to consider your family member’s income before your CPP payment. If you are a family member who will be entitled to CPP assistance, the benefits that will come with your family member’s CPP will not be a source of money available, thus providing you little opportunity to get on the job. To find out the best way to contribute towards your CPP, learn more. For more information on CPP benefits, see CPP Benefits: Benefits, Social Security and the Canadian Family Insurance Plan.
Income and income-based benefits paid in 2016.[/p]
Citizens, spouses or parents who are eligible for CPP benefits have the opportunity to make an investment in Canada if they have more than two families members who are the same age and with any taxable income. For instance, if you
For details, go to Canada Pension Plan Contribution Rates
Your Social Security Plan Contributions
Your Canada Pension Plan contributions
For information on how to contribute to the Canada Pension Plan, and how to calculate your total benefit amount, go to Canada Post’s Contributions calculator for more information.
How to contribute to the Canada Pension Plan
See our Canadian Pension Plan contribution calculator page for more information.
How do I contribute to the Canada Pension Plan
A deposit has to be made with the Canada Pension Plan. If your deposit is greater than $1,000 or $1,000, you will receive your benefits in full when you withdraw your pension. A deposit made with the Canada Pension Plan must be of the form:• a letter of resignation, written or electronic, from the Pension Plan Administrator at the beginning of the year to the Director General of the Canadian Pension Plan;• a cheque, provided by the employee or beneficiary, made by them to the Minister or Minister(s) of Finance which you request will be taken, as required by law, in person or by check;• or• a deposit received by you in the year immediately preceding the end of the year. You must withdraw at least one cheque from Canada Pension Plan that provides for the deposit.To add your pension to Canada Pension Plan, go to Canada Post’s contribution and contributions calculator for more information.To make your contributions to the Canada Pension Plan, see Canadian Pension Plan Canada
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The contribution and contribution amounts, if any, that apply to the maximum amount of your deposit for the year you receive the cheque, will be added to your CPP Plan savings account. For more information on how to make changes to your pension, see Pension changes
.If you receive an EKG from a former Canada Pension Plan participant or an SPS contribution from a spouse, common-law partner or common-law partner, the maximum deposit by the former Canada Pension Plan participant in your CPP plan is the maximum amount that can be made at all times, except on the day of your retirement. This applies to all changes to your CPP plan and to all contributions under the Canadian Pension Plan you become eligible for the annuity. A person who has become eligible for a single annuity, the first time that is made, is deemed to have made a deposit of $5,000 or more for the year that the deposit has not been made or if the individual made at least $5,000 in the period in which the former CPP participant was eligible for the year. The minimum deposit payable to a CPP participant each month that is paid by an individual or by a partnership is $5,000.
See http://www.gvn.ca/home/home?cpt=S5&bct=S5&bct=S5
Fees on your Pension Plan plan and in your pension contributions
Fees shall be charged to the CPP Pension Plan annually, when the CPP Plan is changed. If any of these fees are changed, the charges may be reduced to determine the maximum monthly rate the CPP Pension Plan may charge for the change. If any of the fees are changed, the CPP will provide for these fees to be taken at a rate proportional to the amount charged to the CPP to maintain the current rate of savings. If the CPP Pension Plan is changed, the CPP Pension Plan will have the power to impose different rates on different payments in the same period of time, as determined by CPP Commission.
For more information about calculating the annual rate for the annual charge, including the effect of different rates on the CPP Pension Plan’s charges, see the CPP Commission webpage for details.
All CPP Pension Plan members and their spouses, common law partners or common-law partners will have the right to cancel their CPP Pension Plan after the date of the notice. If the cancelled CPP Pension Plan does not pay the cost of providing the CPP Pension Plan with all of the benefits it provided during the previous year or any of the benefits provided in the new year that are not provided before the repeal, cancellation or termination of a CPP Pension Plan, after the repeal, cancellation or termination of the agreement, the CPP Pension Plan will not receive any payments to cover the cost of renewing the CPP Pension Plan. If the cancellation or cancellation of a CPP Pension Plan constitutes a condition on your continued membership in the CPP, the CPP Pension Plan will collect only the cost of maintaining an agreement to return the current rate of savings to you and not to change the rate of income that you can make. The rate of income required to renew the CPP Pension Plan may include one or more changes to the federal standard deduction. The Federal Standard Deduction for Income If the federal standard deduction was set at 1% for individuals (
For details, go to Canada Pension Plan Contribution Rates
Your Social Security Plan Contributions
Your Canada Pension Plan contributions
For information on how to contribute to the Canada Pension Plan, and how to calculate your total benefit amount, go to Canada Post’s Contributions calculator for more information.
How to contribute to the Canada Pension Plan
See our Canadian Pension Plan contribution calculator page for more information.
How do I contribute to the Canada Pension Plan
A deposit has to be made with the Canada Pension Plan. If your deposit is greater than $1,000 or $1,000, you will receive your benefits in full when you withdraw your pension. A deposit made with the Canada Pension Plan must be of the form:• a letter of resignation, written or electronic, from the Pension Plan Administrator at the beginning of the year to the Director General of the Canadian Pension Plan;• a cheque, provided by the employee or beneficiary, made by them to the Minister or Minister(s) of Finance which you request will be taken, as required by law, in person or by check;• or• a deposit received by you in the year immediately preceding the end of the year. You must withdraw at least one cheque from Canada Pension Plan that provides for the deposit.To add your pension to Canada Pension Plan, go to Canada Post’s contribution and contributions calculator for more information.To make your contributions to the Canada Pension Plan, see Canadian Pension Plan Canada
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The contribution and contribution amounts, if any, that apply to the maximum amount of your deposit for the year you receive the cheque, will be added to your CPP Plan savings account. For more information on how to make changes to your pension, see Pension changes
.If you receive an EKG from a former Canada Pension Plan participant or an SPS contribution from a spouse, common-law partner or common-law partner, the maximum deposit by the former Canada Pension Plan participant in your CPP plan is the maximum amount that can be made at all times, except on the day of your retirement. This applies to all changes to your CPP plan and to all contributions under the Canadian Pension Plan you become eligible for the annuity. A person who has become eligible for a single annuity, the first time that is made, is deemed to have made a deposit of $5,000 or more for the year that the deposit has not been made or if the individual made at least $5,000 in the period in which the former CPP participant was eligible for the year. The minimum deposit payable to a CPP participant each month that is paid by an individual or by a partnership is $5,000.
See http://www.gvn.ca/home/home?cpt=S5&bct=S5&bct=S5
Fees on your Pension Plan plan and in your pension contributions
Fees shall be charged to the CPP Pension Plan annually, when the CPP Plan is changed. If any of these fees are changed, the charges may be reduced to determine the maximum monthly rate the CPP Pension Plan may charge for the change. If any of the fees are changed, the CPP will provide for these fees to be taken at a rate proportional to the amount charged to the CPP to maintain the current rate of savings. If the CPP Pension Plan is changed, the CPP Pension Plan will have the power to impose different rates on different payments in the same period of time, as determined by CPP Commission.
For more information about calculating the annual rate for the annual charge, including the effect of different rates on the CPP Pension Plan’s charges, see the CPP Commission webpage for details.
All CPP Pension Plan members and their spouses, common law partners or common-law partners will have the right to cancel their CPP Pension Plan after the date of the notice. If the cancelled CPP Pension Plan does not pay the cost of providing the CPP Pension Plan with all of the benefits it provided during the previous year or any of the benefits provided in the new year that are not provided before the repeal, cancellation or termination of a CPP Pension Plan, after the repeal, cancellation or termination of the agreement, the CPP Pension Plan will not receive any payments to cover the cost of renewing the CPP Pension Plan. If the cancellation or cancellation of a CPP Pension Plan constitutes a condition on your continued membership in the CPP, the CPP Pension Plan will collect only the cost of maintaining an agreement to return the current rate of savings to you and not to change the rate of income that you can make. The rate of income required to renew the CPP Pension Plan may include one or more changes to the federal standard deduction. The Federal Standard Deduction for Income If the federal standard deduction was set at 1% for individuals (
5. What is my “contributory period” and how is it used?The total span of time during your life when you may contribute to the Canada Pension Plan is called your contributory period. It is used in calculating the amount of any Canada Pension Plan benefit to which you become entitled. Your contributory period begins when you reach age 18 or January, 1966 (the start of the CPP) and continues until you begin receiving your retirement pension, reach age 70 or die (whichever is the earliest).
6. If I had some low-earning years, will that reduce my pension?Remember that Canada Pension Plan calculations include both how much and how long you have contributed.However, to protect you, some parts of your contributory period can be dropped out of the calculation, such as:* periods when you stop working or your earnings become lower while you are raising your children under the age of seven;* low earning months after the age of 65;* any month when you were eligible for a Canada Pension Plan disability pension;