Canada Pension Plan - Eligibility
The Canada Pension Plan (CPP) retirement pension provides a monthly benefit to eligible applicants.
You can apply for and receive a full CPP retirement pension at age 65 or receive it as early as age 60 with a reduction, or as late as age 70 with an increase.
When you should take your CPP retirement pension
The standard age to begin receiving a CPP retirement pension is when you reach age 65, which is the month after your 65th birthday. However, you can take a reduced CPP retirement pension as early as the month after your 60th birthday. You can also take an increased pension after reaching age 65.
Before you decide when to take your CPP retirement pension, you may want to consider the following:
- how your age will affect your monthly payment;
- whether you plan on working while receiving your pension;
- how much you have contributed and how long you have been making contributions to the CPP;
- your personal savings, investments or company pension plan;
- your retirement planning and the lifestyle you want when you retire;
- your current health, family health history or any disabilities;
- whether you have any other income such as business investments, rental income, etc.
The Canadian Retirement Income Calculator and your CPP Statement of Contributions within My Service Canada Account can also help you determine the best time to start your CPP retirement pension and get an estimate of how much you might receive.
Your CPP retirement pension does not start automatically. You must apply for it. Before you apply, you must:
- be at least a month past your 59th birthday;
- have worked in Canada and made at least one valid contribution to the CPP; and
- want your CPP retirement pension payments to begin within 12 months.
General Drop-out Provision
Over the course of your working life, you might have had periods where you had low or zero earnings. Such periods can occur for a variety of reasons, such as going to school, becoming unemployed, or leaving the workforce to provide care to a family member.
The Canada Pension Plan (CPP) offers protection against this by automatically dropping a number of months of your lowest earnings when calculating your CPP benefit.
In 2013, the percentage of lowest earnings dropped is 16%, allowing up to 7.5 years of your lowest earnings to be dropped from the calculation. This will likely increase your benefit amount.
In 2014, the percentage will increase to 17%, allowing up to 8 years of your lowest earnings to be dropped from the calculation. This change will benefit all CPP contributors who begin receiving CPP benefits in 2014 or later
Charlotte is a high school teacher. She started university at age 18 and, after completing two post-secondary degrees over five years, she started teaching immediately. In addition to those five years, Charlotte took three years off during her career to travel and take care of her mother.
Charlotte plans to take her Canada Pension Plan (CPP) Retirement Pension when she reaches 65 in 2015. At that point, up to 8 years of her lowest earnings will be automatically dropped from the calculation of her average earnings.
Her 2015 pension will be $8,359, and will then grow with the cost of living, as measured by the Consumer Price Index. Without the drop-outs, her 2015 pension amount would have been only $8,202.
If you stopped working or received lower earnings to raise your children, you may be able to use the "child-rearing provision" to increase your Canada Pension Plan (CPP) benefits.
Caring for young children can mean leaving the work force or working fewer hours. If your earnings stopped or were lower because you were the primary caregiver raising your children under the age of seven, you can request the child-rearing provision.
If you are deemed eligible, the child-rearing period will be excluded from the contributory period when calculating your CPP benefit amount, ensuring that you get the highest possible payment.
Note: Primary caregiver
For the CPP, the primary caregiver is the person who was most responsible for the day-to-day needs of the children for the specified periods.
Am I eligible?
The child-rearing provision may apply to you if:
- you have children born after December 31, 1958;
- your earnings were lower because you either stopped working, worked fewer hours or took a lesser paying job to be the primary caregiver of a dependent child under the age of seven;
- you or your spouse or common-law partner received Family Allowance payments or were eligible for the Canada Child Tax Benefit (even if you did not receive the benefit).
Either spouse or common-law partner can request the child-rearing provision, but it cannot be used by both parents for the same period of child-rearing.
Why should I request the child-rearing provision?
You should request the child-rearing provision because it may increase the amount of your Canada Pension Plan (CPP) benefit.
The child-rearing provision could also help you meet the eligibility requirements for a CPP Disability Benefit, should you need it. In the event of your death, it could help you meet the contributory requirements to provide benefits to your estate and survivors.
How and when should I request the child-rearing provision?
You should request the child-rearing provision when you apply for any Canada Pension Plan (CPP) benefit.
- For all other CPP benefits, you will need to complete the child-rearing provision form (ISP1640) separately.
- The application form for the CPP retirement pension (ISP1000) includes a section on child-rearing (section 11A).
If you are already receiving a CPP benefit, you can still request this provision. Complete the child-rearing provision form (ISP1640), include certified true copies of the required documentation and mail it to Service Canada as indicated on the form.
What documents do I need to provide?
You must provide one of the following for each child:
- the child's name, date of birth, and Social Insurance Number
- the child's birth certificate (the original or a certified true copy)
You may also be required to provide proof of the date of entry into Canada for children born outside Canada.
Julie was employed until her daughter Elizabeth, was born in 1983. Julie stayed at home with Elizabeth until she started school in 1989.
When Julie applies for her retirement pension in 2016 at age 65 and requests the child-rearing provision, the CPP will exclude the period from the month following Elizabeth's birth in 1983 to 1990 in its calculation of Julie's pension benefit amount.
Julie will receive a CPP Retirement Pension of $735 per month. Without the benefit of the child-rearing provision, her pension would have been $650 per month.
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