The Canada Pension Plan (CPP) is one of two ways to get retirement income. The other way is through Old Age Security. Usually the retiree applies for and receives both.
Almost all people working in Canada contribute to the Canada Pension Plan. The requirement is that people over the age of 18, who work inside Canada, but outside Quebec (Quebec has its own pension plan), and earn more than the minimum of $35,000 have to contribute to the CPP.
You stop contributing once you turn 70 years old.
It is through your contributions that you become eligible for CPP benefits and determines how much you will get once you retire or become disabled or die.
You are paid a monthly benefit if you are eligible once you have reached the age of retirement (currently 65). Should you wish to retire earlier, you can, but you will get a reduced benefit. If you work past 65, then you will get an increased benefit pension.
Usually people start receiving their pensions one month after their 65th birthday – if they applied on time that is.
Application for CPP benefits
Some people assume that this is an automatic benefit, but they are wrong. You have to be eligible to receive it and you have to apply for it.
In fact, 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.
How do I apply?
You can apply online.
However, you will need a My Service Canada Account. If you don’t have one, you must create one.
What do I need to apply?
Besides registering for your My Service Canada Account, you must also prepare the following information:
- Your banking information to sign up for direct deposit;
- The date you would like your pension to start.
When can I apply?
No more than 12 months before the date you would like your pension to start. However, in order to give the government enough time to process your application, you should apply at a minimum three to six months before you would like your pension to start.
If you are applying from Québec
CPP doesn’t operate in Quebec. In Quebec you have the Québec Pension Plan (QPP), which does the same thing CPP does in the rest of Canada.
You need to apply through the QPP if you:
- You have only worked in Quebec;
- You worked in Quebec and at least one other province and currently reside in Quebec; or
- You worked in Quebec and at least one other province, you currently reside outside of Canada and your last province of residence in Canada was Quebec.
If you contributed to both plans, then the rule of thumb is that if you live in Quebec, you apply for the QPP, and if you live somewhere else within Canada, then you apply for the CPP.
Canada Pension Plan
Québec Pension Plan