income security programs · social development canada old age security benefits • old age...

SOCIAL DEVELOPMENT CANADA

CanadaCanada’’s Public Pension Systems Public Pension System

• Old Age Security

• Canada Pension Plan

• International Social Security Agreements


The 3 Levels of CanadaThe 3 Levels of Canada’’ssRetirement Income SystemRetirement Income System

Private Savings +Employer Pensions

Canada Pension Plan Québec Pension Plan

Old Age Security

3

2

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Old Age SecurityOld Age SecurityBenefitsBenefits

• Old Age Security pension

• Guaranteed Income Supplement

• The Allowance and Allowance for the Survivor


OAS PensionOAS Pension

Based on:

• Age - 65• Legal Status• Years of

Residence


Full OAS PensionFull OAS Pension

Residence RequirementResidence Requirement• 40 years of living in Canada after 18Some may qualify under alternate rules:• By meeting the last 10 year rule• By meeting the “3 for 1” rule


Partial OAS PensionPartial OAS PensionResidence RequirementResidence Requirement• 10 years of living in Canada• 20 years of living in Canada,

if applying from abroad

Rate = 1 for each year in40 Canada after age 18


International AgreementsInternational AgreementsProtect social security rights

Help meet eligibility requirements

Current

Agreements:

40+ countries


International AgreementsInternational AgreementsFor OAS benefits

• Help to meet residence rules

* Total time in Canada and other country

* Prorate payment based onyears in Canada


OAS PensionOAS Pension• Taxable benefit

• Higher income earners subject to a repayment of benefits

• Payable outside Canada with 20 years of Canadian residence

• Subject to non residence tax


Income Tested BenefitsIncome Tested BenefitsThe Old Age Security program

provides

extra help to low income seniors:

• Guaranteed Income Supplement (GIS)

• The Allowance

• Allowance for the Survivor


Guaranteed Income Guaranteed Income Supplement Supplement -- GIS GIS

• For low income seniors in Canada

• Monthly benefit added to OAS pension

• Amount based on income, marital status, and OAS rate


AllowanceAllowancePaid to the younger spouse/partner

of OAS pensioner if:

• age 60 to 64• couple’s

income is low• residence rules

are met


Allowance for the SurvivorAllowance for the Survivor

Paid if:• age 60 to 64• a survivor• income is low• residence rules are

met


Income Tested BenefitsIncome Tested Benefits

• GIS, Allowance, Allowance for Survivors benefits are not taxable

• Allowances are not paid past 65 - they are replaced with the OAS pension


Canada Pension PlanCanada 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


Canada Pension PlanCanada Pension Plan• Workers pay into CPP during

earning years

• To protect against future loss of

income due to retirementretirement

disabilitydisability

deathdeath


CPP BenefitsCPP Benefits•• RetirementRetirement

•• DisabilityDisability

- Children’s benefits

•• SurvivorSurvivor

- Death benefit

- Survivor pension

- Children’s benefits



Pension calculations based on:

• Contributory Period• CPP recorded earnings & contributions


Contributory PeriodContributory Period

Starts Starts ------------------------------• January 1966

• month after 18th birthday

EndsEnds• month before

Retirement pension

• month age 70

• month of death


CPP DropCPP Drop--Out ProvisionsOut Provisionsdisabled children

under 7over 65 15%

START START ................................................................................................ ENDEND

Period in receipt of CPP disabilityPeriod raising children under age 7Over age 65 periods replace earlier periods15% lowest earning years in contributory period



Statement of ContributionsStatement of Contributions

• Sent periodically• Available annually• New – can register for

online access


2005 Contributory Earnings2005 Contributory Earnings

In 2005

Ceiling is YMPE $ 41,100

Floor is YBE - $ 3,500

Maximum Maximum = $ 37,600 Contributory EarningsContributory Earnings


Credit SplittingCredit SplittingWhen 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• waiver allowed in some provinces


CPP Retirement PensionCPP Retirement Pension• Need one valid

contribution

• Retirement Choices

Early:Early: age 60 to 65

StandardStandard: age 65

LateLate: age 65 - 70


EarlyEarly Retirement PensionRetirement Pension

• must have stopped or stopped or substantially stopped worksubstantially stopped work

• pension is reducedreduced by 0.5% for each month under age 65

• no change at 65


Late Retirement PensionLate Retirement Pension

•• nono need to stop work

• pension is increasedincreased by0.5% for each month over age 65


Retirement Pension Retirement Pension SharingSharing

• 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


CPP Disability BenefitCPP Disability BenefitRules:

• Under age 65

• Paid long enough and recently enough

• Disability must be both severe and prolonged


ChildrenChildren’’s Benefits Benefit

A child of the disabled contributor• under 18

or• 18 to 25, attending full time school• flat rate


Survivor BenefitsSurvivor 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


Death BenefitDeath Benefit• lump sum benefit

• maximum of $ 2,500

• paid to estate, person paying for funeral, survivor, or next-of-kin


CPP SurvivorCPP Survivor’’s Pensions Pension• Paid monthly to the survivor of

the deceased contributor

• legal spouse or common-law partner


ChildrenChildren’’s Benefits Benefit

A child of the deceased contributor• under 18

or• 18 to 25, at school

• payment is a flat rate


International AgreementsInternational AgreementsFor CPP

• Help to meet eligibility rules for Disability + Survivor benefits

* Total time – work periods

* Prorate payment


Taxable BenefitsTaxable Benefits

• CPP benefits are taxable

For those living outside Canada

• non-resident tax varies with country of residence


Need More Information?Need More Information?Call toll free:Call toll free:

1 800 2771 800 277--99149914 EnglishEnglish

1 800 277-9915 French

1 800 255-4786 TDD/TTY

Visit our web site at:Visit our web site at:servicecanada.gc.caservicecanada.gc.ca

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