Foreword
Many people who want to understand Canada's public pension system find that it
is complicated and sometimes confusing. They also find at times that it is hard to get a
picture of what Canadian public pensions are all about. Even though information is
available, it can be difficult to find it in one place and in a form that is easy to
understand.
This is the WWW version of a booklet intended to provide a basic overview of
Canada's public pensions. It was published by the Gerontology Research Centre at Simon
Fraser University with funding from the Royal Canadian Legion, Pacific Command.
It covers highlights only. At the end you will find phone numbers and addresses in Canada
where you can get further details.
The information here refers to both men and women. However, because Canadian
women usually live longer than men and often interrupt their paid work for family
responsibilities, there are some facts that are especially important for women to know.
These will be marked with the sign  . The
information in this booklet was current at the time of printing. Please check with sources
indicated at the end of the booklet for further reference.
To distribute this booklet as widely as possible we encourage you to share
your copy or to make copies and circulate them to other interested persons or groups. |
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The Old Age Security Program (OAS) is a federal government
program that is paid out of general tax revenues.
Benefits include:
- the basic OAS pension
- the Guaranteed Income Supplement (GIS)
- the Spouse's Allowance (SPA).
Benefits are increased every three months, in accordance with
increases in the cost of living (the Consumer Price Index).
- Old Age Security Pension The OAS pension is a monthly pension
paid to anyone 65 years or over, if certain eligibility conditions are met. These include:
- citizenship or
- legal residence in Canada - a minimum of 10 years of residence in Canada after
age 18 is required.
If a person wants to receive the pension but lives outside of Canada, he or she
must have lived a minimum of 20 years in Canada. The OAS benefit is taxable. You do not
have to be retired to receive it.
If your personal annual income exceeds $53,215, a portion of the benefit is
repaid to the government according to a reduction repayment schedule. This is commonly
referred to as the OAS 'clawback'. If your income exceeds approximately $84,483 you will
not get the OAS.
Canada has reciprocal agreements with a number of countries which allow payment
of the OAS outside of Canada. These agreements assist people in meeting the basic (10
year) residence requirement.
You must apply for the pension - it will not be sent to you automatically
when you reach the age of 65.
- Guaranteed Income Supplement If you have little or no income
except for the OAS, you may qualify for a Guaranteed Income Supplement (GIS). The monthly
benefit is based on your income and the income of your spouse if you have a spouse.
You
must reapply every year for the GIS.
- Spouse's Allowance This monthly
allowance (SPA) is based on your and your spouse's income, which must not exceed a set
limit. A spouse can be a legal or a common law partner.
Eligibility
qualifications:
- your age (between 60-64),
- marital status (you must be the spouse of someone getting the OAS and the GIS)
- your length of residence in Canada.
- Widowed Spouse's Allowance There
is a Widowed Spouse's Allowance that is available to widowed persons aged 60-64 if
income conditions are met.
The Canada/Québec Pension Plan (C/QPP) is an
insurance plan that covers a large number of Canadians when they retire. It offers other
benefits as well as a retirement pension. The funding of the C/QPP comes entirely from the
contributions it receives from employees and employers. If you have a paid job, work full
time or in some cases part time, you and your employer make matching contributions up to a
maximum, which are automatically taken off your earnings. Self- employed persons must make
the total contribution. The benefits you will receive are based on your earnings and the
total years of contributions to the plan. Benefits are indexed to inflation.
Québec workers come under the Québec Pension Plan which is
co-ordinated with the CPP, and is very similar. Benefits, available anywhere in Canada,
can include a retirement pension, survivor's, children's, disability and death benefits,
and a child rearing drop out period. You must apply for all C/QPP benefits - they are
not sent out automatically. If you paid into both the CPP and QPP you should apply to
the plan you last paid into.
- Retirement PensionRetirement benefits are equal to
25% of credited lifetime earnings. A full retirement pension starts at age 65. You may be
eligible for early retirement benefits when you are aged between 60 and 64, but these will
be reduced 1/2% per month of early retirement. You may postpone receiving benefits up to
the age of 70 and benefits will be increased accordingly. Benefits are indexed every
January to reflect increases in the cost of living. You should apply for this pension
at least 6 months in advance. You can share retirement benefits with your spouse if
you are married or living common law, if your spouse is at least 60 years of age.
Credit splitting
If you are divorced or separated you may divide any CPP credits that you or your spouse
have earned. These may be divided equally over the life of the marriage, or the period of
a common-law union. There are some provincial differences with regard to this.
- Disability Benefits If you are under 65, have CPP credits, and have a severe or
prolonged disability (according to CPP definitions) you may be eligible for a CPP benefit.
Benefits may also be paid on behalf of your dependent children if you are receiving a
disability benefit, until they reach age 18, or up to age 25 if they continue to attend
school full-time. There are similar Orphan's Benefits.
- Survivors' Benefits A spouse (married or
common-law) of a deceased contributor may be eligible for a survivor's pension if he or
she qualifies according to CPP requirements. These include:
- the survivor's age
- the amount of the deceased spouse's contributions and other eligibility
qualifications.
Survivors' benefits continue to be paid if the recipient remarries.
Drop-out Periods
Certain periods when you have low or no earnings - up to 15% of years between
age 18 and 65 - may be excluded from calculations of your pensionable earnings when you
apply for a pension. Also, periods of low or no earnings while you are caring for a child
who is under age 7 may be excluded from pensionable earnings. This child-care provision is
commonly referred to as the 'child-rearing dropout'. Periods of CPP disability may also be
excluded.
- Death BenefitsA lump sum death benefit is paid if
the deceased had CPP contributions for a certain qualifying period. The minimum period is
similar to that required to receive a surviving spouse's pension. This benefit is
generally paid to the deceased's estate but can also be paid where there is no will or
estate.
None of the CPP benefits come to you automatically. You must
apply for all CPP benefits.
PLEASE NOTE
The government is considering changes to the CPP which could affect contribution
rates, disability benefits, death benefits, and survivor's benefits among other things.
The proposed changes to the CPP were tabled as draft legislation at the time of
publication of this booklet.
It is important that you keep informed about any changes as these may affect
you in the future. |
Veterans Affairs provides a wide range of services and benefits,
including pensions for dependents and survivors, disability pensions, war veterans
allowance, home care, long term care and other benefits. For information call the nearest Veterans
Affairs District Office listed in the Government of Canada section of your telephone
book. Information may also be obtained from Provincial Command Offices of The
Royal Canadian Legion.
A Registered Retirement Savings Plan (RRSP) is an individual
retirement savings plan. It allows you to save earned income within certain limits. What
you save in your RRSP fund is tax deductible within limits and the investments that the
fund earns are not taxed. You may withdraw money from your fund at any time before you
retire, but these withdrawals are taxable. At a given age, currently 69, your fund must be
converted to an annuity or a Registered Retirement Investment Fund (RRIF), and taxes must
be paid.
Registered Pension Plans (RPP) are employee retirement benefit
programs provided by employers or unions to employees in both the public and private
sectors. They are often referred to as private pension plans to make a distinction between
them and the public pension system. RPP and Group RPP come under provincial and federal
pension legislation. There are numerous types of plans, and they differ with regard to
coverage, membership, benefits, retirement ages and so on. Survivors' benefits, not
available in all private plans, can vary based on whether the beneficiary dies before or
after retirement. If it is the latter, this survivor's benefit may be waived if both
spouses have signed a waiver form.
- By telephone - Income Security Programs
1-800-277-9914 (English)
1-800-277-9915 (French)
TDD call 1-800-255-4786 (hearing impaired)
- Human Resources Development Canada
- For further information about the Seniors Benefit write to: Distribution Centre,
Department of Finance, 300 Laurier Avenue, Ottawa, ON, K1A 0G5 Phone: (613) 995-2855 or
fax: (613) 996-0518.
- For information about Canada's reciprocal social agreements with other countries
call: The nearest Client Service Centre, Income Security Programs Branch, Human Resources
Development Canada at the above numbers or write to the addresses listed on the next page.
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