Every January, the amount of Canada Pension Plan payments are adjusted if there is an increase in the cost of living, as measured by the Consumer Price Index.
2016’s Canada Pension Plan Monthly and Maximum Benefits have been announced.
The Maximum Canada Pension Plan Payment for Retirees at Age 65 is $1,092.50 for 2016.
Click here for more rates.
Note that your specific Canada Pension Plan Payment will be based upon:
- The numbers of years you have been making contributions to the Canada Pension Plan
- The amount of your contributions to the Canada Pension Plan
- Whether or not you were the primary caregiver raising your children and had zero or low earnings during that period
- Your age at the time you start receiving Canada Pension Plan Payments
Contributions to the Canada Pension Plan
With few exceptions, Canadians over 18 who work in Canada and earn more than the minimum amount ($3,500) must contribute to the Canada Pension Plan. Your contributory period starts at the time you begin work and ends at retirement.
If you have an employer, you pay half of the required contributions and your employer pays the other half. If you are self-employed, you make the whole contribution.
You make contributions only on your annual earnings that are between a minimum and maximum amount – these are called your pensionable earnings. The minimum amount is frozen at $3,500. The maximum amount is set each January. In 2016, the Yearly Maximum Pensionable Earnings amount is $54,900.
The Child-Rearing Provision may apply to you if:
- You have children born after December 31, 1958;
- Your earnings were lower because you stopped working, worked fewer hours, or took a lower paying job to be the primary caregiver of a dependent child under the age of seven;
- You, your spouse or common-law partner received Family Allowance payments or were eligible for the Canada Child Tax Benefit (even if you did not receive it)
The Child-Rearing Provision is requested by you at the time you apply for your Canada Pension Plan payments. You should request this because it may increase the amount of your benefit.
You will need to provide the following :
- The child’s name, date of birth, and Social Insurance Number
- The child’s birth certificate (original or certified true copy)
The standard age for beginning your Canada Pension Plan Payments is the month after your 65th birthday.
You can take a reduced pension as early as age 60. Your pension will be reduced by 0.6% for every month you take it early. This means that if you take it at age 60, your pension will be reduced by 36%.
You can delay taking your pension to age 70. For every month that you delay your pension, your benefit will increase by 0.7%. This means that if you delay payment to age 70, you will receive 42% more than you would if you began payments at age 65.
To learn more about your Canada Pension Plan benefits, sign up for a My Service Canada Account.