Canada s s Public Pension System

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Corey Miles
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1 Canada s s Public Pension System Old Age Security Canada Pension Plan International Social Security Agreements

The 3 Levels of Canada s Retirement Income System 3 2 1 Private Savings +

2 The 3 Levels of Canada s Retirement Income System Private Savings + Employer Pensions Canada Pension Plan Québec Pension Plan Old Age Security

3 Old Age Security Benefits Old Age Security pension Guaranteed Income Supplement The Allowance and Allowance for the Survivor

4 OAS Pension Based on: Age-65 Legal Status Years of Residence

5 Full OAS Pension Residence Requirement 40 years of living in Canada after 18 Some may qualify under alternate rules: By meeting the last 10 year rule By meeting the 3 for 1 rule

6 Partial OAS Pension Residence Requirement 10 years of living in Canada 20 years of living in Canada, if applying from abroad Rate = 1 for each year in 40 Canada after age 18

7 International Agreements Protect social security rights Help meet eligibility requirements Current Agreements: 40+ countries

8 International Agreements For OAS benefits Help to meet residence rules * Total time in Canada and other country * Prorate payment based on years in Canada

9 OAS Pension Taxable benefit Higher income earners subject to a repayment of benefits Payable outside Canada with 20 years of Canadian residence

10 Income Tested Benefits The Old Age Security program provides extra help to low income seniors: Guaranteed Income Supplement (GIS) The Allowance Allowance for the Survivor

11 Guaranteed Income Supplement - GIS For low income seniors in Canada Monthly benefit added to OAS pension Amount based on income, marital status, and OAS rate

12 Allowance Paid to the younger spouse /partner of OAS pensioner if: age 60 to 64 couple s income is low residence rules are met

13 Allowance for the Survivor Paid if: age 60 to 64 a survivor income is low residence rules are met

14 Income Tested Benefits GIS, Allowance, Allowance for Survivors benefits are not taxable Allowances are not paid past 65 - they are replaced with the OAS pension

15 Canada Pension Plan Began January 1,1966 Work related plan contributions are compulsory and earnings related Québec has own similar plan QPP CPP benefits can be paid outside Canada

16 Canada Pension Plan Workers pay into CPP during earning years To protect against future loss of income due to retirement disability death

17 Retirement Disability CPP Benefits - Children s benefits Survivor - Death benefit - Survivor pension - Children s benefits

18 Canada Pension Plan Pension calculations based on: Contributory Period CPP recorded earnings & contributions

19 Contributory Period Starts January 1966 month after 18th birthday Ends month before Retirement pension month age 70 month of death

20 CPP Drop-Out Provisions disabled children under 7 over 65 15% START... END Period in receipt of CPP disability Period raising children under age 7 Over age 65 periods replace earlier periods 15% lowest earning years in contributory period

21 Canada Pension Plan Statement of Contributions Sent periodically Available annually New can register for online access

22 2005 Contributory Earnings In 2005 Ceiling is YMPE $ 41,100 Floor is YBE - $ 3,500 Maximum = $ 37,600 Contributory Earnings

23 Credit Splitting When a marriage or common-law union ends former spouses or partners may split their CPP earnings for the years they lived together permanent change to record of earnings can affect current or future entitlement time limits on some applications

24 CPP Retirement Pension Need one valid contribution Retirement Choices Early: age 60 to 65 Standard: age 65 Late: age 65-70

25 Early Retirement Pension must have stopped or substantially stopped work pension is reduced by 0.5% for each month under age 65 no change at 65

26 Late Retirement Pension no need to stop work pension is increased by 0.5% for each month over age 65

27 Retirement Pension Sharing spouses or common-law partners may share their Retirement pensions both must be at least age 60 both must have claimed their Retirement pensions, unless one person has never contributed to CPP

28 CPP Disability Benefit Rules: Under age 65 Paid long enough and recently enough Disability must be both severe and prolonged

29 Children s s Benefit A child of the disabled contributor under 18 or 18 to 25, attending full time school flat rate

30 Survivor Benefits Death Benefit Survivor s Pension Children s Benefit Earnings requirements for deceased: 1/3 of years in contributory period up to maximum of 10 years Contributions in not less than 3 years

31 Death Benefit lump sum benefit maximum of $ 2,500 paid to estate, person paying for funeral, survivor, or next-of-kin

32 CPP Survivor s s Pension Paid monthly to the survivor of the deceased contributor legal spouse or common-law partner

33 Children s s Benefit A child of the deceased contributor under 18 or 18 to 25, at school payment is a flat rate

34 International Agreements For CPP Help to meet eligibility rules for Disability + Survivor benefits * Total time work periods * Prorate payment

35 Taxable Benefits CPP benefits are taxable For those living outside Canada non-resident tax varies with country of residence

36 Need More Information? Call toll free: English French TDD/TTY Visit our web site at: servicecanada.gc.ca

Canada Pension Plan (CPP) and Old Age Security (OAS)

Canada Pension Plan (CPP) and Old Age Security (OAS) Connecting to Life s Events ISSD-030-12-10 You can order this publication by contacting: Publications Services Human Resources and Skills Development