If you work in Canada, chances are you have noticed deductions for the Canada Pension Plan (CPP) being deducted off of your pay cheque. Every individual who is employed or self-employed must contribute to this plan, which is the Canadian government’s retirement income system.

  • If you are employed by a company, your employer matches your contributions, which are withheld from your regular pay.
  • If you are self-employed (proprietor or partnership), you must make both the employee and employer contributions, and this is done each year when you file your personal T1 General tax return.
  • CPP benefits do not start automatically. You must file an application with Service Canada to start your monthly pension.

What Are CPP Retirement Benefits, and When Can I Apply?

  • The Canada Pension Plan retirement benefit is a government pension plan paid to you monthly in retirement.
  • To qualify for the CPP, you must have worked in Canada and made at least one contribution.
  • The standard age for starting the CPP is 65, but you can start as early as age 60 or wait as long as age 70.
  • CPP benefits are fully taxable and must be included as income when filing your tax return.
    • You will receive a T4A(P) tax slip showing the amount and type of benefits received, as well as the number of months you received benefits and any tax which has been withheld.

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How much will I receive?

The amount of CPP you receive is based on how long and how much you contribute when you file your application. For 2020, the maximum monthly amount you could receive as a new recipient starting the pension at age 65 is $1,175.83. The average monthly amount for March 2020 is $696.56. Your situation will determine how much you’ll receive up to the maximum.

How Do I Apply for the Canada Pension Plan?

  • You do not start receiving your pension automatically when you reach age 65.
  • You must submit an application to Service Canada to start your monthly pension.
  • Before you can apply for CPP, it must be at least a month after your 59th birthday.
  • You must also have made at least one contribution to the CPP and want to start your CPP within 11 months.

Before you can apply, you need to have the following information:

  • Your Social Insurance Number.
  • Your banking information if you want your payments direct deposited.
  • Your spouse or common-law partner’s SIN.

The CPP has a child-rearing provision where you can request low-earning years to be removed from the calculation of your CPP benefits while raising your children. To apply for this provision, you must provide the SIN or birth certificate of your children.

Canadians can apply for the CPP in two ways:

  1. You can apply online on the Service Canada website. Applying online happens in two steps. First, you must complete and submit your online application. Second, you must print and sign the signature page from Step 7 of the application and submit it to Service Canada. A date stamp appears on this page to show when you submitted your application online.
  2. You can print and complete the CPP retirement pension application Form ISP1000 and mail it to Service Canada or drop at a Service Canada office in your area.

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