Canada Pension Plan

Frequently Asked Questions (FAQs) about the Canada Pension Plan Section

CPP FAQs are categorized under two headings: 
A) CPP Contributions
  1. CPP is referred to as a contributory program. What does this mean?
  2. What other benefits can I receive from CPP?
  3. What happens if I have also paid into the Quebec Pension Plan (QPP)?
B) Other Frequently Asked Questions about CPP
  1. Will the CPP section of the calculator help me to estimate the amount of my CPP disability or survivor benefits?
  2. Can I get a CPP survivor benefit and a retirement pension at the same time?
  3. If I plan to begin receiving my retirement pension before the age of 65, will this affect the amount of my pension?
  4. If I plan to begin receiving my CPP retirement pension after the age of 65, will this affect the amount of my pension?
  5. If I plan to begin receiving my CPP retirement pension before the age of 65, can I still continue to work?
  6. Will my CPP pension be reduced because I was unemployed for a while or because I stayed at home until my children were in school?
  7. Can I share my CPP retirement pension with my spouse or common-law partner?
  8. What is credit splitting?
  9. Can I use the calculator if I’m already receiving a CPP Retirement Pension?
  10. Can I contribute to CPP and my company pension?

A) CPP Contributions

1) CPP is referred to as a contributory program. What does this mean?

Virtually every Canadian contributes to the CPP (or the QPP if you work in Quebec) on earnings from employment or self-employment between specified minimum and maximum levels.
The contributions you make are recorded from the time you are 18 until you begin receiving your CPP pension. Generally, the contributions over this entire period determine the amount of benefits you will receive.

2) What other benefits can I receive from CPP?

Along with the retirement pension that you will receive, you and your family are also protected against loss of income due to disability and death.

3) What happens if I have also paid into the Quebec Pension Plan (QPP)?

Depending on where you have worked over the years, you may have paid into both the CPP and QPP. The amount you receive will be calculated according to your contributions to both plans, regardless of which plan pays your benefit.

B) Other Frequently Asked Questions about CPP

1) Will the CPP section of the calculator help me to estimate the amount of my CPP disability or survivor benefits?

No. The calculator concentrates on the CPP retirement pension and the other parts of the retirement income system. However, like all CPP benefits, the amount of the disability or survivor benefit is generally based on your earnings and contributions to the Plan. Both of these benefits have several components, including benefits for children.

2) Can I get a CPP survivor benefit and a retirement pension at the same time?

Yes. If you are entitled to survivor benefits and you have contributed to the Canada Pension Plan, you may receive a combined survivor/retirement pension.
This combined pension is subject to a maximum. It is important to remember that you may not get 100% of your retirement pension plus 100% of your survivor benefits.

3) If I plan to begin receiving my retirement pension before the age of 65, will this affect the amount of my pension?

Yes. Your retirement pension is reduced by a set percentage for each month before age 65 that you choose to begin receiving it. This reduction is permanent.

From 2012 to 2016, the amount of this reduction will gradually increase from 0.52% to 0.6% per month. This means that if you start receiving your retirement pension in 2016 at age 60, it will be 36% less than if you had taken it at 65. The reduction percentage that is in effect the year your retirement pension commences remains in effect for as long as you receive the benefit, and will not change. Your pension may increase each year based on changes in the Consumer Price Index.

Maximum reduction (if pension is taken at age 60)

  • Effective January 2012 to December 2012: 31.2 % (0.52 % per month)
  • Effective January 2013 to December 2013: 32.4 % (0.54 % per month)
  • Effective January 2014 to December 2014: 33.6 % (0.56 % per month)
  • Effective January 2015 to December 2015: 34.8 % (0.58 % per month)
  • Effective January 2016 to December 2016: 36.0 % (0.60 % per month)

Your retirement pension starts the month after we receive your application (or at a later date, if you indicate one on your application). The earliest you can begin receiving it is the month after your 60th birthday.

4) If I plan to begin receiving my CPP retirement pension after the age of 65, will this affect the amount of my pension?

Yes. Your retirement pension is increased by a set percentage for each month after age 65 that you delay receiving it, until age 70.

From 20121 to 2013, the amount of this increase will gradually rise from 0.6457% to 0.70% per month. This means that if you start receiving your CPP retirement pension in 2013 at age 70, it will be 42% more than if you had taken it at 65.

Maximum increase (if pension is taken at age 70)

  • Effective January 2011 to December 2011: 34.2 % (0.57 % per month)
  • Effective January 2012 to December 2012: 38.4 % (0.64 % per month)
  • Effective January 2013 to December 2013: 42.0 % (0.70 % per month)

If you are applying after your 65th birthday, you can choose to receive retroactive pension payments, but they cannot begin earlier than the month after your 65th birthday. In general, we can make retroactive payments of CPP benefits for up to 12 months (11 months plus the month you apply).

If you delay applying for your CPP retirement pension after you turn 70, you risk losing benefits. There is no financial benefit in delaying your pension after age 70.

5) If I plan to begin receiving my CPP retirement pension before the age of 65, can I still continue to work?

Yes, if you choose to start receiving your CPP pension between the ages of 60 and 65, you can still continue to work.

Between age 60 and 65, you and your employer will have to make CPP contributions (4.95% each). The employer is responsible for deducting contributions. Self-employed persons contribute both portions (9.9% total).

Between age 65 and 70, you and your employer will have to make CPP contributions (4.95% each) unless you choose to stop contributing. The employer is responsible for deducting contributions. Self-employed persons contribute both portions (9.9% total).

To find out more about how to stop contributing to the CPP, visit the Canada Revenue Agency Web site at www.cra.gc.ca/cpp or call 1-800-959-8281.

See Post-Retirement Benefit Frequently Asked Questions for more information to see how you can further contribute to your financial security after you retire.

6) Will my CPP pension be reduced because I was unemployed for a while or because I stayed at home until my children were in school?

The CPP recognizes that most people have periods when they are not in the paid labour force. To compensate for periods of unemployment, illness, schooling etc., up to 15% of your low-earnings periods are not counted toward your CPP benefits.
Likewise, periods of lower earnings when you were at home caring for children under the age of seven can be excluded when calculating your CPP benefits. Other periods may also be excluded from the calculation, such as times when you received a CPP disability benefit.

Note: Starting January 1st, 2012, there will be an increase in the general drop-out provision.
  • Effective January 2012: from 15% to 16%.
  • Effective January 2014: from 16% to 17%.
For technical reasons, the child rearing drop-out provisions cannot be included in the calculator's CPP retirement estimate. For more information on these provisions, please call toll-free 1 800 277-9914 (TDD/TTY 1 800 255-4786).

7) Can I share my CPP retirement pension with my spouse or common-law partner?

Yes, there may be a tax advantage to doing this. Pension sharing is permitted for spouses or common-law partners who are living together, are both at least 60 and are no longer contributing to CPP. As with other CPP benefits, you must apply.

8) What is credit splitting?

When a marriage or common-law relationship ends, the CPP credits built up by the couple while they lived together can be divided equally between them. These credits can be split even if one spouse/common-law partner did not pay into the CPP. Credit splitting can affect the CPP entitlements of both former spouses and common-law partners.

9) Can I use the calculator if I’m already receiving a CPP Retirement Pension?

Yes, the other modules that make up the calculator may be of assistance to you in considering your overall financial situation. The CPP Section is primarily designed for those who are not already receiving the CPP retirement pension.

10) Can I contribute to CPP and my company pension?

Yes, many Canadians contribute to the CPP and their employer-sponsored pension. You will, however, receive two separate payments. It may be helpful for you to find out from your employer if your employer pension benefits are integrated with your CPP retirement pension.
If your pension plan is a Defined Benefit Plan, the way your benefit is calculated may take into account the pension you will receive from CPP, QPP or OAS. If so, it’s an “integrated” plan and your employer pension amount will not be the same throughout your retirement. In most cases, the monthly pension you receive from your employer before the age of 65 will be different from what you receive after 65. Once you reach 65, the amount you receive from your employer pension will be reduced.
Your CPP/QPP amount remains the same once started, except for increases for the cost of living. Where your plan is integrated with a public pension, it is the employer pension that will be reduced at 65.
It’s a good idea to find out if your pension is integrated, and to learn how integration will affect your total monthly pension at different stages of your retirement.